Texas Developer Indicted in HUD Probe
Texas Developer Indicted in HUD Probe
Jul. 12, 1991
WASHINGTON (AP) _ A Texas real estate developer has been indicted by a grand jury investigating influence peddling at the Department of Housing and Urban Development, court papers disclosed Friday.
The indictment, the first in a special prosecutor's 15-month investigation, implicates two one-time aides to former Housing Secretary Samuel R. Pierce in a scheme to help the developer obtain federal grants under false pretenses.
But neither aide was charged in the indictment, which was returned Thursday and disclosed Friday.
The developer, Leonard E. Briscoe, 49, of Fort Worth, was accused in the six-count indictment of filing false statements to obtain a $2.4 million Urban Development Action Grant in 1986 to build a shopping mall in Riviera Beach, Fla.
The court papers implicate Lance Wilson, once Pierce's chief of staff and then a vice president of Paine Webber Inc., as an unnamed and unindicted co- conspirator in a scheme to help Briscoe falsely certify that he had obtained the required private financing to qualify for federal assistance.
Although Wilson's name was not mentioned in the indictment, his role in the episode described in the charges was spelled out in a congressional report last fall.
The indictment names DuBois Gilliam, Pierce's former deputy assistant HUD secretary, as an unindicted co-conspirator.
The indictment alleges that Briscoe filed false statements with HUD when applying for the UDAG grant by saying that he had obtained private backing through Paine Webber, where Wilson went after he left HUD in 1984.
Briscoe, charged with mail and wire fraud, filing false statements and reports, refused to testify when called before the House Government Operations housing subcommittee, which conducted hearings on the HUD scandal.
The indictment charges that Briscoe submitted a false letter stating that he had commitments from the New York financial firm to underwrite the sale of taxable bonds to finance the private portion of the project.
The letter, signed by Wilson, were given to Gilliam, then deputy assistant HUD secretary. Gilliam, who had already served an 18-month prison term for an unrelated HUD fraud conviction, is cooperating with the investigation of independent counsel Arlin Adams.
Adams was appointed March 1, 1981, to investigate allegations that Pierce and his top aides illegally steered lucrative federal grants to politically connected developers.
The indictment charges that Briscoe obtained the false financial commitment letter to meet a HUD deadline for consideration of UDAG applications while he searched for another source of private financing.
Gilliam told Congress that he approved the Riviera Beach project, which included an apartment complex, over the objection of HUD officials. The apartments for tenants with low to moderate incomes were built with a $3.6 million UDAG grant Gilliam approved in late 1985.
''I intervened and sat down and took over the project, worked up some different numbers from Mr. Briscoe,'' Gilliam told the subcommittee.
The subcommittee report said that Wilson received a 15 percent limited partnership in the apartment project, which went into foreclosure last year. Briscoe then filed for protection under Chapter 11 of federal bankruptcy laws, the report said.
Wilson's attorney, Raymond Banoun, could not be immediately reached for comment. Wilson, who no longer works for Paine Webber, has an unlisted telephone number in New York City. Defense attorney Barry Levine, who represents Briscoe, could not be immediately reached.
Briscoe's indictment comes nearly a month after a federal grand jury in West Palm Beach, Fla., charged him with defrauding HUD by inflating the cost of the Riviera Beach project an two others. Briscoe was also charged with arranging to pay bribes to Gilliam, who administered the UDAG program from 1984 to 1987.
An internal HUD audit in 1989 found that the Riviera Beach project cost $4.3 million less to build than the $24.3 million reported figure.