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Feds move against ‘poster boy of bad landlords’

May 9, 1997

SAN FRANCISCO (AP) _ A man called the ``poster boy of bad landlords″ was hit Friday with a federal complaint accusing him of illegally siphoning off $5 million from subsidized housing units.

Bruce Rozet allegedly forced property managers on his 17 complexes in California and Nevada to kick back a third of their federally paid fees, said the complaint filed by the U.S. attorney’s office and the Department of Housing and Urban Development.

``Matters such as these are double crimes _ they steal taxpayers’ dollars and they condemn tenants to live in deplorable conditions,″ Housing Secretary Andrew Cuomo said from Washington, D.C.

The complaint states that the housing projects’ assets were misappropriated, the projects didn’t receive the level of management services paid for by federal funds, and rent increases were inflated.

Rozet operates through Associated Financial Corp. of Pacific Palisades. The complaint also names a co-owner of the company, Dean Earl Ross.

Rozet and Ross allegedly demanded the kickbacks from companies that managed the complexes. HUD was never informed of the kickbacks, which the owners were required to report, the complaint says.

Under the law, the money should have gone to pay off the $212 million in HUD-insured mortgages Rozet still owes, the complaint adds. He was granted the loans to build subsidized housing projects.

``Payments were made to the defendants, who provided no services to the project,″ U.S. Attorney Michael Yamaguchi said. ``They created a scheme in which a portion of the rent paid to the project was diverted to them.″

Rozet receives $71 million annually in HUD subsidies, and owns 235 subsidized apartment projects housing 61,000 people.

Rozet was traveling and could not be reached, said Joan Garretson, an AFC secretary. Ross also was out of the office and unavailable to comment, she said.

Calls made to Rozet’s attorney were not immediately returned Friday afternoon.

Rozet has been criticized for providing substandard housing. Last year, a fire ripped through the Rozet-owned Lake Grove Village in Chicago, killing four people. Residents blamed the blaze on shoddy conditions. Critics then called Rozet ``the poster boy of bad landlords.″

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