City Manager Jim Starbird acknowledged this week that there were signs that not all was as it seemed with Advanced Development & Investment Inc. — the affordable-housing firm embroiled in a federal fraud investigation that, in the past five years, has received nearly $34 million in city assistance.
Starbird said he was "tremendously concerned" by allegations that ADI executives fraudulently transferred up to $80 million in company assets to personal accounts, and potentially gave improper gifts or donations to public officials. But he acknowledged that in hindsight, there were potential warning signs, namely spiking costs for the firm's most recent projects.
"Yeah, you start to ask, why are the numbers going up so dramatically?" he said.
The fraud allegations stem from a report by David Pasternak, a receiver appointed by a Los Angeles County Superior Court judge as part of a divorce proceeding involving the company's former president, Salim Karimi, and Jannki Mithaiwala, the daughter of company founder Ajit Mithaiwala.