Head of OC firm pleads guilty to embezzling from cities, including Hemet, Perris

The former president of a Huntington Beach company that held federal grant and loan money in escrow on behalf of local governments agreed today to plead guilty to embezzling millions of dollars that belonged to more than 20 cities in the Southland, including two Southwest Riverside County communities.

Hemet and Perris were among the cities that officials contend lost money because of actions of the defendant.

In a plea agreement filed in U.S. District Court in downtown Los Angeles, Belinda Exon, 55, who now lives in Phoenix, Ariz., admitted she embezzled $3.9 million that was being held in escrow by her former company, Rehab Financial Services Inc., according to Thom Mrozek of the U.S. Attorney’s Office.

The now-defunct escrow and loan servicing agent administered grants and loans for California municipalities. The money entrusted to Rehab Financial included funds awarded by the U.S. Department of Housing and Urban Development to local governments for rehabilitation programs designed to address health and safety hazards in low-income housing.

Exon took money that was being held in escrow, using it to purchase properties and vacant land in Arizona, as well as to finance two companies that she owned, Mrozek said.

According to the plea agreement, the following cities sustained losses:
– San Francisco, $1,021,000;
– Pomona, $751,000;
– Seal Beach, $481,432;
– Huntington Park, $478,000;
– Westminster, $223,392;
– Buena Park, $162,563;
– Rosemead, $128,328;
– Montebello, $125,000;
– Apple Valley, $95,452;
– Camarillo, $91,975;
– Fullerton, $66,453;
– Perris, $66,000;
– Bellflower, $59,140;
– Calamesa, $42,257;
– Santa Cruz, $34,784;
– Encinitas, $29,524;
– Santa Monica, $26,029;
– Hollister, $22,195;
– West Covina, $10,000;
– Rialto, $8,791;
– South Gate, $7,603;
– Hemet, $3,000; and
– San Juan Capistrano, $2,055

“It is all the more important in today’s trying economic environment that the federal government remain vigilant in its efforts against those who would siphon limited resources,” said HUD Inspector General Kenneth M. Donohue Sr.

“The Office of the Inspector General is committed to overseeing that such valuable funding goes to those truly in need and to bringing to justice, together with our law enforcement partners, those who seek personal gain at the expense of our American citizenry,” he said.

Exon agreed to plead guilty to one count of embezzling money from organizations that receive federal funds, a felony offense that carries a
statutory maximum sentence of 10 years in federal prison, Mrozek said.

She is scheduled to make her initial appearance in Los Angeles federal court on June 7.

The plea agreement filed today suggests a sentence of up to 46 months in federal prison and would require Exon to forfeit the properties she purchased with the embezzled funds and to make full restitution to the victimized cities,
Mrozek said.