City wants stolen funds back 

In August, Belinda Exon turned herself over to federal authorities after embezzling millions of dollars from California cities, including
$1 million intended for San Francisco’s low-income housing program.

Exon, 55, was the former president of Rehab Financial Services, an escrow and loan company that had been in contract with the Mayor’s Office of Housing for more than a decade.

At the time, city officials said they had no reason to believe there was anything unusual going on — in fact, a week before learning about the crime, The City had cut a check for $70,000 to the company.

But while Rehab Financial held the money in escrow, Exon used it to buy property in Arizona, and to finance two companies she owned, according to the U.S. Attorney’s Office.

The Huntington Beach escrow and loan company, now defunct, administered grants and loans for Mayor’s Office of Housing programs, including home rehabilitation and health and safety upgrades for low-income residents, said Doug Shoemaker, the mayor’s housing director.

Now, city officials — including those in City Attorney Dennis Herrera’s office — are trying to get the money back.

"It would be surprising if we get it all back," said Don Margolis, deputy city attorney. "We don’t know how many cents on the dollar we will get, but we are diligently identifying all available assets."

The U.S. attorney has negotiated a restitution order with Exon, requiring her to turn over all of her assets to the U.S. government. The liquidated assets will be used to repay victims, Margolis said.

Exon signed a plea agreement in May in a Los Angeles courtroom after turning herself in and admitting to embezzling $3.9 million from 23 California cities.

The City discovered that the company had taken off with its housing money after a city in Southern California contacted San Francisco officials asking if they had heard from or talked to anyone from Rehab Financial. That’s when San Francisco launched an investigation and discovered that $1 million was missing from the housing fund, Shoemaker said.

The Mayor’s Office of Housing was forced to tap into the general fund to honor its commitments to the low-income homeowners who applied for home-improvement projects and the contractors that did the work, Margolis said.

"We are trying to get it back now, and we will do our best," Margolis said.

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