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Report: Records show $425K missing in land deal

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March 24, 2011 05:02 PM EST | AP


BELL, Calif. — A California city plagued by a corruption scandal paid more than double the assessed value for a plot of land in 2006 and nearly a half-million dollars of that money is unaccounted for, it was reported Thursday.

Then-City Administrator Robert Rizzo and ex-General Services Director Eric Eggena wanted the property in Bell as part of a revitalization effort in the business district, but no redevelopment has occurred on the site where a car wash still operates and pays rent to the city, according to the Los Angeles Times.

The city paid $1.35 million for the land and in return got a promise that $425,000 would be returned in the form of a charitable contribution to the city to support a youth club or build a park, the Times said, citing interviews and records.

When the contribution is subtracted, the actual sales price would be $925,000 – well above the appraised value of $612,000.

The car wash operators had a long-term lease that gave them the right of first refusal to match any prospective offers but could not afford the price.

The land was sold by Jack Elwood shortly before his death. His son, Bruce, and city officials do not know what happened to the charitable donation, the Times said.

The $425,000 was held by an escrow agency and later returned to the city while Bruce Elwood signed over the property deed after his father's death, the Times said.

Elwood told the newspaper that he repeatedly asked Eggena for a city letter that had been promised to document the tax-deductible donation, but said he never got the paperwork and never claimed the deduction.

"I was always suspicious of the city from the standpoint of, what did you do with that money," Bruce Elwood said.

Calls by The Associated Press seeking comment from Rizzo and an Eric Eggena in Tujunga were not immediately returned.

The Bell Community Redevelopment Agency was criticized in a state audit last year for improperly using money for low-income housing to help subsidize the bloated salaries of top city officials and operating without enough oversight.

No criminal charges were filed over the car wash land deal.

In a separate case, Rizzo and seven other ousted Bell officials were charged with fraud and other counts claiming they looted the city of millions of dollars, largely by providing themselves with exorbitant salaries.

Rizzo, who had an annual salary and compensation package of $1.5 million, and three other defendants pleaded not guilty Thursday to the corruption counts.

Eggena was not charged.

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Information from: Los Angeles Times, http://www.latimes.com