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    United States Attorney's Office
    Central District of California

    Thom Mrozek
    Public Affairs Officer

    (213) 894-6947
    thom.mrozek@usdoj.gov



    Return to the 2011 Press Release Index
    Release No. 11-059

    April 18, 2011

    ESCROW AGENT WHO EMBEZZLED NEARLY $4 MILLION BEING HELD FOR 24 CALIFORNIA CITIES SENTENCED TO PRISON

    LOS ANGELES – The president of a now-defunct Huntington Beach company that held grant money and loan proceeds in escrow on behalf of local governments was sentenced today to 37 months in federal prison for embezzling nearly $4 million that belonged to San Francisco, Pomona, Seal Beach and 21 other California cities.

    Belinda Exon, 56, who now lives in Phoenix, Arizona, was sentenced this morning by United States District Judge Otis D. Wright II. In addition to the prison term, which will begin on June 3, Judge Wright ordered Exon to pay $3,885,247 in restitution to two dozen municipalities.

    When she pleaded guilty last May, Exon admitted that she embezzled $3.9 million that was being held in escrow by her former company, Rehab Financial Services, Inc. Exon used much of the embezzled funds to finance the purchase of residential properties and vacant land in Arizona cities of Phoenix, Maricopa, Kingman, Chandler and Glendale. She also used about a half million dollars to fund start-up landscaping and pool service businesses. Exon took the money during a six-year period that ended in 2008.

    Rehab Financial was an escrow and loan servicing agent that administered grants and loans for California municipalities. The money entrusted to Rehab Financial included funds awarded by the United States Department of Housing and Urban Development to local governments for rehabilitation programs designed to fix health and safety hazards in low-income housing, and to pay for upgrades necessary to bring low-income housing into compliance with building codes. The funds entrusted to Rehab Financial included HUD funds awarded to local governments for Community Development Block Grant, Community Program Development and rehabilitation Loan (HOME) programs.

    According to court papers, the City and County of San Francisco, which suffered the largest losses as a result of Exon’s embezzlement, had to tap other city funds, which “prevented the city from undertaking several new multi-unit projects to abate the presence of lead and to rectify other health and safety hazards.” According to San Francisco’s Lead and Housing Rehabilitation Programs Manager of the Mayor’s Office: “[A]s a direct of Ms. Exon’s embezzlement, many low-income residents continue to be forced to live in substandard conditions that threaten their health, most notably children under the age of six who are most susceptible to the effects of lead paint exposure.”

    Judge Wright said at today’s hearing that Exon’s conduct “had a real and tangible effect on a population that we, as a society, are attempting to reach out to and help. People will be living in less habitable dwellings – even dangerous dwellings” as a result of Exon’s embezzlement.

    Judge Wright determined that the 24 victim municipalities suffered the following losses as a result of Exons criminal conduct:

    San Francisco – $1,106,035

    Pomona – $751,000

    Seal Beach – $478,500

    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

    Calimesa - $45,000

    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

    San Juan Capistrano – $2,055

    The Housing Authority of the County of Marin – $5,259

    Exon pleaded guilty to one count of embezzling money from organizations that receive federal funds. When she pleaded guilty, Exon agreed to forfeit the properties she purchased with the embezzled funds and to make full restitution to the victim municipalities.

    The case against Exon was investigated by HUD’s Office of the Inspector General.

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    Release No. 11-059
    Return to the 2011 Press Release Index