FBI Search of GHURA Related to Low Income Housing Tax Credits Awarded in 2011 And Later Sold to Coretech

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According to PNC news files the award resulted in two protests by two companies, Medallion and Micronesia Community Development, that were originally ranked as the number one and number two applicants for the tax credits before they were awarded to the bottom two ranked applicants. 

Guam – According to GHURA Executive Director Mike Duenas the FBI search of their offices stems from the awarding of millions of dollars of federal low income housing tax credits. According to PNC news files this award was mired in controversy and it resulted in two separate protests and an investigation by the FBI in 2012.

 

 The most recent investigation into the Guam Housing and Urban Renewal Authority is a follow-up investigation on the millions of dollars of federal low income housing tax credits or LIHTC that were awarded to two companies back in 2011.

 According to PNC news files the award resulted in two protests by two companies, Medallion and Micronesia Community Development, that were originally ranked as the number one and number two applicants for the tax credits. Instead of awarding the millions in federal tax credits to the two highest ranked applicants the GHURA board opted to award the credits to the two lowest ranked applicants namely 4th ranked Great Homes LLC which was owned by the Catholic Social Services and the Calvo Finance Corporation and the fifth ranked Tower 70 which was owned by Robert Salas and Keith Farrel.

 Great Homes was awarded $2.3 million in tax credits and tower 70 was awarded $2.5 million. Nothing came of either protest and eventually both projects were sold to Coretech international which meant Coretech took over the use of the federal tax credits. These tax credits were used to build two low income housing developments Summer Green Residences in Tamuning and the Summer Home Apartments in Machananao Yigo.

 In 2012 the then GHURA Executive Director Marcel Camacho resigned and then sent out a press release calling into question the GHURA board’s handling of the low income housing tax credits.

 He made reference to certain irregularities with the tax credit program that he said would all be made clear in the end. Camacho accused the board of taking it upon themselves to award these tax credits to Great Homes and Tower 70 even though he believed there were deficiencies with the application from Great Homes that were “pointed out by an expert from the mainland that was retained by legal counsel to advise on LIHTC matters.”

 Camacho wrote in his release that he never signed off on the awarding of tax credits as the awards were made by the board against his “better judgement”. He stated at the time that that he stood by his decisions even if it meant having to resign.

 Finally Camacho mentioned in his letter that the proper authorities had been notified of the irregularities in the handling of these tax credits.

 Later In 2012 the FBI contacted Camacho’s replacement which was then GHURA Executive Director Ray Topasna and asked him questions concerning the awarding of these low income housing tax credits. A few weeks prior to this Topasna was also contacted by Deputy Attorney General Phil Tydingco also for the same reason.

 Then in July of 2015 GHURA starting getting subpoenas from the FBI. On Friday of last week GHURA’s offices got searched by the FBI, the A.G.’s Office and HUD’s Office of Inspector General.

 So why search their offices now after all the subpoenas? Well about a week before the search warrant was executed former Board Chairman Dave Sablan spoke to Patti Arroyo about the 17 subpoenas GHURA has been issued since July of 2015 saying “We gave it all to them. Our attorneys reviewed it to make sure that some of the confidential attorney client discussions in some of those documents are not sent out and we have that right under the freedom of information act to remove those or redact those things which we’ve done,” said Sablan.