Former Gallaher employees at Santa Rosa apartment complex say they were pushed to take part in housing fraud schemes
Two former employees at an apartment complex owned and run by Sonoma County developer Bill Gallaher’s companies say they were directed to participate in fraud alleged in a June 2019 whistleblower lawsuit that recently settled for $500,000.
They also state they were never contacted by any of the three government agencies — county and state — that investigated the case, which was settled last month.
In written statements signed under penalty of perjury, the former employees said they were willing and able to testify in court to their experiences at Vineyard Creek Apartments near Charles M. Schulz-Sonoma County Airport. The two women drafted the declarations at the request of the whistleblower’s attorney.
Officials with Sonoma County, the California Attorney General’s Office and the California Department of Insurance have said their agencies investigated the claims but ultimately chose not to intervene in the case. The two state agencies have declined to discuss their decision, while county officials have said they found insufficient evidence to justify intervention.
It’s not clear whether investigators from any of the three agencies were aware of the declarations. Officials from all three organizations declined to answer that question when asked by The Press Democrat.
“If they had conducted an investigation, they would have found things,” former Vineyard Creek assistant property manager Jen Negoesco told The Press Democrat.
In her declaration Negoesco alleged she was directed to place tenants in low-income housing at the property even though they did not qualify — one of the allegations contained in the whistleblower lawsuit.
“If they called me, I could take them in there and pull files from people that I specifically remember, but nobody called me,” Negoesco said.
The case has raised questions about how closely government agencies enforced compliance with low-income housing requirements tied to $35 million in tax exempt bonds, and zoning and permitting concessions secured by Gallaher to build the 232-unit complex, which opened in 2006.
The now-settled lawsuit alleged that lax enforcement by officials allowed for wrongdoing at the property. In an interview, Negoesco echoed that assertion.
“There shouldn't be a low-income program that isn't strictly monitored,” Negoesco said. “And it wasn't strictly monitored. Yeah, we had all their (tenants’) paperwork. But if nobody's ever going through that paperwork and checking it, then what does it even matter?”
After a weekslong Press Democrat investigation into the settlement, the county’s top housing official said he was reviewing the county’s oversight of Vineyard Creek.
The newly revealed declarations from Negoesco and Dani Robinson, a former leasing agent at the property, raise fresh questions about how government agencies treated the whistleblower’s claims. The Press Democrat interviewed the two former employees after publishing last month’s investigation.
Mariah Clark, the former employee who brought the whistleblower suit, reached the $500,000 settlement with five companies she said were operated by the Gallaher family, The Press Democrat reported Aug. 21. The suit alleged violations of California insurance and labor law as well as affordable housing fraud.
The lawyers who represented the Gallaher companies in the lawsuit did not respond to multiple emails seeking comment. Emails and voicemails left with the Gallaher companies also went unanswered, including voicemails left with members of the Gallaher family. Bill Gallaher’s daughter and business partner, Molly Flater, who according to the suit oversaw operations at Vineyard Creek, did not respond to voicemails, a text message and emails seeking comment. A leasing consultant at one of Gallaher’s properties said she would forward a message to “higher ups” with the company, but no one responded. An attempt to reach Gallaher at his Santa Rosa home was also unsuccessful.
In a closed-session meeting on Aug. 17, Sonoma County attorneys told the Board of Supervisors there wasn’t sufficient evidence to pursue a lawsuit, the four supervisors present in the briefing have told The Press Democrat.
Officials have declined to discuss what evidence they reviewed before deciding not to join the case. The attorney general’s office maintained that stance this week in response to questions from The Press Democrat about Negoesco and Robinson’s declarations. “To protect its integrity, we cannot comment on a potential or ongoing investigation,” a spokesperson for the attorney general wrote in an email.
A county official also said he could not comment on the investigation.