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Topic: operation Unification scammed Genesee County $500K

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untanglingwebs
El Supremo

In the Genesee County Circuit Court lawsuit, Genesee County versus Operation Unification, (Case No. 2015-105423, Judge Farah), the county asked to foreclose on nine (9) properties and the $470,000 balance of a $500,000 mortgage made to Operation Unification on July 9, 2009.

A tenth property that was part of the agreement, 6197 Cypress, Mt. Morris, was lost to tax foreclosure. The remaining nine properties were at risk of a tax foreclosure at the time of the filing.


Last edited by untanglingwebs on Fri Jun 24, 2016 3:26 pm; edited 1 time in total
Post Thu Jun 23, 2016 2:53 pm 
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untanglingwebs
El Supremo

George Rizik II of the firm Rizik and Rizik sent the written Notie of default and acceleration to the defendant Operation Unification and the CEO Charles Young on July 21, 2015.

RE: Loan for $500,000 from Genesee County

...."Genesee County loaned the sum of $500,000.00 ("the Loan") to Operation Unification Inc. under the auspices, as amended of the HOME Investment Partnership Program pursuant to a HOME agreement dated July 7, 2009 and an Operating Funds Agreement dated July 7, 2009, as amended by an amendment with an effective date of July 7,2009 ( all of which are collectively referred to herein as the "Agreements"). The repayment of the Loan was secured by a mortgage on real estate dated July 7,2009, and recorded February 3, 2010 at Instrument No.2010030006387, Genesee County Records, as amended by and instrument dated July 24, 2010, and recorded July 12, 2010, at Instrument No. 2010007120055203, Genesee County Records (both of which documents are collectively referred to herein as the "'Mortgage".


Last edited by untanglingwebs on Mon Jun 27, 2016 10:34 pm; edited 2 times in total
Post Thu Jun 23, 2016 3:10 pm 
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untanglingwebs
El Supremo

Operation Unification (OU)was obligated to annual installment payments of $30,000 each September 30. Not only did OU fail to make their 2012, 2013, and 2014 installment payments, they have failed to pay their real property taxes an assessments on the mortgaged properties.

According to the Rizik letter, OU had 30 days to cure the default or the entire balance was due and payable. (before August 21, 2015)
Post Thu Jun 23, 2016 3:18 pm 
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untanglingwebs
El Supremo

Genesee County had certified Operation Unification as a Community Housing Development Organization (CHDO) " qualified to receive HOME funds for the purposes of expanding the suppl of decent, safe, sanitary and affordable housing for low income households."

The suit indicates the current balance due on the loan was $470,000.

The county also requested a receiver with the ability to define the receivers powers and duties pursuant to the transaction documents. The lawsuit was filed August 28, 2015. The county prevailed.
Post Thu Jun 23, 2016 3:26 pm 
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untanglingwebs
El Supremo

Two meetings of the Genesee County Metropolitan Planning Committee in 2015 illustrate county funding problems with Operation Unification.

1) January 8, 2015 under Community Development allocations

Community Development Block Grants (CDBG) and NSP transfer of funds


Operation Unification was unable to complete their project. Staff wants to transfer $319, 162.81 back into NSP1 accounts in order to purchase and rehab additional NSP homes. Operation Unification had received funding for the acquisition and rehabilitation of ten properties, but was only able to complete two homes.


2) July 14, 2015

Report: Director-Coordinator

Operation Unification, a nonprofit organization that Genesee County contracts with, has fallen out of compliance with the terms of their project contracts.

Oeration Unification is behind in taxes and payments to the county and four (4) of their properties are in need of repairs. Staff will be exploring options to bring the terms of the two Operation Unification contracts into compliance.
Post Sat Jun 25, 2016 12:43 pm 
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untanglingwebs
El Supremo

In reality, the county failed their due diligence in awarding the contracts to Operation Unification. I have written extensively about this in another thread on Flint talk.

Why would the county wait three years of missed payments and one county purchased property going into tax foreclosure before acting. Hud expects the tax issue to be monitored at least annually, which appears to have not occurred here.

Didn't anyone become aware of the problems and tax foreclosures with the Village project of Operation Unification? Did they not know of the City lawsuits, the Consumers Energy Lawsuit , and the resultant bankruptcy of the CEO Charles Young?

This smacks of negligence and improper review in the handling of the federal grant funds? Has Hud demanded a payback and if they did, where is the media coverage?
Post Sat Jun 25, 2016 12:53 pm 
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untanglingwebs
El Supremo

HOME HUD rules at 24 CFR 95.504 (a) states that a participating jurisdiction (pj) is responsible for managing the day to day operations of the HOME program, ensuring that the HOME funds are used i accordance with all program requirements and written agreements.

In this case the pj is the County of Genesee Michigan. The pj was required review the performance of each entity under the HOME program at least annually. Part of that review would have been checking to see if all taxes and required permits & fees were paid. Reviewing annual audits or IRS 990's is mandatory.

It appears that there was no attempt to determine the true financial condition of Operation Unification. Action should have been taken and suspensions enacted after the first year the taxes went unpaid.

HUD regulations requires all expenditures be for authorized purposes. This does not appear to be the case and the County appears to have been negligent in their fiduciary oversight.

HUD Homefires issue volume 4 NO.4 of 2002 relates to the HOME rules. `
Post Mon Jun 27, 2016 10:33 pm 
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untanglingwebs
El Supremo

The Genesee County Metropolitan Planning Commission Local Unit Committee met at
7:30 a.m. on Tuesday, June 16, 2015, in the Conference Room of the Genesee County
Metropolitan Planning Commission (GCMPC), 1101 Beach Street, Room 223, Flint,
Michigan.
Chairperson Isaac called the Local Unit Committee meeting to order at 7:31 a.m.
Present: Alexander Isaac, Alan Himelhoch, Gloria Nealy, John Manderlaris and Jamie Curtis.
Others Present: Derek Bradshaw, Christine Durgan, Sheila Taylor and Nichole Odette.
The Local Unit Committee meeting was called to discuss and review options the County may have for either selling or renting the Operation Unification (OU) properties.Derek Bradshaw stated that staff has contacted Corporation Counsel regarding hiring outside counsel and is waiting for a response. According to HUD, the County can sell the homes or offer them as rent-to-own, as long as they are offered to the current tenants first. Discussion ensued regarding the pros and cons of either renting or selling
the properties.

Derek Bradshaw explained that Operation Unification fully rehabilitated three (3) and partially rehabilitated two (2) NSP properties. Renters currently occupy two (2) homes and are paying rent to OU. GCMPC staff has requested that they make payments to the County. The County does have a payback liability of $36,000 to HUD if the NSP homes are not completed; however, a waiver request will be sent to HUD that will request the County be allowed to use NSP program income funds to repay that amount. NSP funds can be used to complete the work on the Bermuda and Palmetto homes and rehabilitate the home on Cypress in order to sell, or NSP funds may be used to demolish the three homes. Discussion ensued.

Motion by Alan Himelhoch, Seconded by Gloria Nealy, that GCMPC immediately
pursue getting a waiver from HUD, or get permission from HUD, to allow the County to use NSP Program income funds to pay HUD back.
Motion Carried Unanimously
Discussion ensued regarding hiring an Attorney to represent the County in this matter and changing the language in future HOME/NSP contracts to include trust language.
Chairperson Isaac adjourned the meeting at 9:04 a.m
Post Fri Sep 23, 2016 6:30 am 
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untanglingwebs
El Supremo

IRS Information
Operation Unification Inc. is a registered tax-exempt organization with the IRS. Their exempt status was temporarily revoked on May 15, 2014 but reinstated by the IRS on the same day.
The organization was required to file a Form 990 or 990EZ with the IRS for the most recent tax year.

This corporation is attempting to rebuild itself after all of the chaos it created and the bankruptcies it went through.


Like another RASCO!
Post Fri Sep 23, 2016 6:40 am 
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untanglingwebs
El Supremo

Yet Yong goes on the radio claiming innocence and blaming the city
Post Tue Dec 25, 2018 12:00 pm 
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untanglingwebs
El Supremo

Smith Village Construction inc had Bret Russell as the registered agent. He had the money to invest.
Post Sat Feb 09, 2019 7:04 am 
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