Former Huntington Beach CEO admits to embezzlement charges

The former president and owner of a Huntington Beach company pleaded guilty today to embezzling $3.9 million in federal funds meant to upgrade low-income housing in 23 cities, many of them in the

Belinda Exon -- whose now-defunct Rehab Financial held grants and loans in escrow on behalf of municipalities -- admitted embezzling the money from September 2002 to October 2008, according to her plea agreement.

Exon's company would administer money reserved to bring low-income housing up to building codes, according to court records. Most of the money came from U.S. Housing and Urban Development funds.

Prosecutors said Exon, 55, of Phoenix, Ariz., spent the money to buy property in Arizona for herself and her Nevada-based company, CFH Properties Inc., as well as to finance two other companies she owned -- Desert Foothills Landscaping Inc. and Arizona Pool and Spa Inc.

She used the embezzled money to acquire a fourplex, a triplex and a duplex in Phoenix, according to the plea agreement, which was outlined today in court. She also bought several parcels of vacant land in Arizona.

Exon, who entered her plea before U.S. District Judge Otis D. Wright II to one count of embezzlement, faces up to 10 years in federal prison. Sentencing is set for Oct. 18.

Exon lived in Fontana when the company was founded in the early 1990s, but Rehab Financial was based out of Huntington Beach, Assistant U.S. Attorney Ranee A. Katzenstein said.

The prosecutor told Wright that Exon has cooperated in the investigation of the case.

According to the plea agreement, the cities and money each lost in the
scheme are:

San Francisco, $1 million; Pomona, $751,000; Seal Beach, $481,432;
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,
$42,257; 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; and San Juan Capistrano, $2,055.

KPCC wire services contributed to this report.