FBI probes LA Housing Dept. project for homeless

The Los Angeles Times reports the FBI is investigating actions by the city's housing department in which $26 million was given to a developer who was under investigation for misusing public funds.

City Controller Wendy Greuel told the Times in a story posted Thursday that the Housing Department put the city at financial risk by failing to review the financial partners involved in building Bonnie Brae Village, a housing project for homeless and disabled seniors.

When David Rubin was indicted in a separate case in New York last year, federal housing officials withdrew Section 8 rental vouchers that would pay the tenants' rent, so the building is sitting empty.

Greuel says without rental income, the developer could default, leaving the city on the hook for $26 million.

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