Complex linked to scandal in ‘90s

Monday, March 10, 2003 | 11:05 a.m.

Sierra Pointe Apartments was part of a nationwide scandal in the early 1990s that culminated with the convictions of several former U.S. Department of Housing and Urban Development officials, including two former Sierra Pointe general partners who made millions of dollars off the property.

Although the current general partner for the company that owns the Las Vegas apartment complex was not implicated in that scandal, at one time he was a business partner of two former HUD officials who were convicted of bribery.

It all started 16 years ago, when Clark County Housing Authority officials leaped at the chance to have a developer rehabilitate a dilapidated apartment complex to provide low-income residents with a clean, safe and affordable living environment.

Sierra Pointe sits among a large number of apartment complexes southwest of Desert Inn Road and Maryland Parkway. The area has given Metro Police headaches for years. It is the type of neighborhood HUD had in mind when it instituted a program in the 1970s to rehabilitate run-down apartment complexes in order to increase the number of affordable apartment units for low-income residents.

When the housing authority decided to pursue rent subsidies from HUD, the county agency thought it had made the right decision by selecting a developer that included former HUD officials.

But the 1987 deal that involved the Sierra Pointe Apartments and others like it became the focal points of a congressional probe involving a nationwide housing scandal. The probe resulted in convictions in the early 1990s of several former HUD officials, including two former Sierra Pointe general partners.

Congress focused on allegations that the former HUD officials used their influence with the agency to gain an inside track on multimillion-dollar housing rehabilitation projects. The targets of the probe made money not only through rent subsidies but by receiving tax credits that they often sold to third parties, such as wealthy lawyers and doctors seeking tax shelters.

Former housing authority Executive Director William Cottrell, who lives in Boulder City as a retiree, testified in 1990 before a Senate subcommittee that was conducting the probe.

"A senator asked one witness if the tax credits were gravy and he said, 'Yes sir, they were,' " Cottrell recalled.

The three original partners in Sierra Vista Housing Associates were former Federal Housing Commissioner Philip Winn, who was also a HUD assistant secretary, Philip Abrams, a former HUD undersecretary and Joseph Queenan, former regional administrator of the Denver HUD office.

The General Accounting Office estimated that during one phase of the Sierra Pointe project, they made $1.8 million on a cash investment of $54.

The Winn Group, operated by Winn in a partnership with Abrams and Queenan, received $163 million in subsidies and tax credits through the early 1990s for rehabilitation projects nationwide. But Winn pleaded guilty in 1993 to making an illegal gift to two HUD officials and paid a $981,975 fine to avoid prison. President Bill Clinton pardoned him in 2000.

Queenan was convicted separately in 1994 of bribing a North Dakota state housing official.

Bobbie R. Scott of Las Vegas, general partner for the limited partnership that now owns Sierra Pointe, was not involved in the HUD probe.

But Scott, who could not be reached for comment, had once been a business partner of Queenan and Ronald Mahon, another former HUD official who was convicted with Queenan in the bribery case. The trio were general partners in M.Q.S. Limited Partnership, a defunct Nevada corporation that was formed in 1989, according to state records.

At the time Cottrell testified, the housing authority had been satisfied with the operation of Sierra Pointe. One point he addressed was the fact that the rehabilitation proposal from the former HUD officials was the only one received by the housing authority for that apartment complex.

"The HUD Inspector General in his report released in 1989 said that we did not follow provisions of the administrative plan in selecting this proposal," Cottrell testified. "We pointed out that the ranking/rating provision of the plan was moot in this case, inasmuch as there was only one proposal to consider. We further noted that the proposal was fully responsive to HUD and local requirements, and therefore there was no good reason to reject the single proposal received."