CULVER CITY, Calif., May 18 -- The head of a California affordable housing development company has been indicted in Minnesota for allegedly defrauding investors out of at least $50 million, officials said Wednesday.
Gary Lefkowitz, president of Culver City-based Citi Equity Group, was charged this week by a federal grand jury with 45 counts of conspiring to defraud home builders, the Internal Revenue Service and about 7,000 investors.
Lefkowitz is accused of lying to housing authorities to get low- income housing tax credits, leaving property owners and builders with unpaid bills and using investors' money at expensive stores and homes in Beverly Hills, Calif., and Beaver Creek, Colo.
'He was committing fraud in order to mastermind what became a very complex scheme to enrich himself,' Assistant U.S. Attorney Andrew Luger told the Los Angeles Times.
Prosecutors said the investors may have to pay back taxes, in addition to the prospect of losing their money. The investors had been allowed to take tax credits for financing low-income housing projects.
Lefkowitz, who is expected to surrender to federal authorities in Minneapolis on Thursday, could not be reached for comment.
A statement released by Citi Equity Group said Lefkowitz is 'preparing to vigorously defend all charges.' It also sought to reassure investors that Citi Equity Group and its limited partnerships were not charged in the indictment.
Lefkowitz founded Citi Equity Group in 1984.
