Years before Hawaiʻi County housing official Alan Rudo became involved in the affordable housing schemes that led eventually to federal charges against him and three other individuals, the federal prosecutor is alleging that Rudo and two of the other men charged were involved in a “test run” of their scheme. Rudo pleaded guilty in 2022; jury selection in the trial of the others is set to begin May 12 in U.S. District Court in Honolulu.
The outlines of the “test run” appear in a brief that the U.S. Attorney’s Office filed with the court last month, stating that it was intending to admit evidence of that “test run” at trial.
“On May 20, 2014, two tax deeds were recorded for the conveyance of two one-acre parcels of land in Keaʻau (‘the Parcels’) to [Rajesh P.] Budhabhatti,” the brief states. Budhabatti is one of the three defendants facing trial this month.
The brief goes on to say that five months later, Budhabhatti registered a business with the state called EHRI LLC, of which Budhabatti was manager. On October 6, 2014, Hawaiʻi County entered into an affordable housing agreement (AHA) with EHRI, “upon the advice and recommendation of Alan Rudo,” according to the brief.
Under the terms of the AHA, EHRI was to build at least two affordable housing rental units on the land, and in return, the county awarded the company four excess affordable housing credits (AHCs), the federal prosecutor states.
One month later, on November 6, on the advice of Rudo, the county “approved an Agreement for Assignment of Affordable Housing Credits” between ERHI and Renaissance Development, LLC, according to the information in the prosecutor’s notice. Budhabhatti signed for EHRI, and in return for the credits, EHRI received $68,000.
“As previously agreed, Budhabhatti paid [co-defendant Gary] Zamber and Rudo a portion of the proceeds from that sale with Rudo’s portion constitution a bribe or kickback in exchange for his official acts related to ERHI,” the prosecutor alleges.
— Patricia Tummons
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