Criminal Charges Filed in Slum Case

Authorities in Arizona have filed 937 criminal charges, potentially carrying $4.9 million in fines, against the owners of Phoenix’s most troublesome slum--an apartment complex that was partially owned by the mayor of Beverly Hills until she deeded her share to a charity two months ago.

Vicki Reynolds, the Beverly Hills mayor, was not personally named in the charges, filed Monday in Phoenix Municipal Court.

But a Phoenix city councilman Tuesday demanded a new criminal inquiry to determine if Reynolds broke Arizona law by “fraudulent or hidden transfer of ownership” of the Canyon Square Apartments.

Reynolds could not be reached for comment Tuesday. Through a spokesman, she denied that she broke any law by giving her 2.9% ownership in September to a charity that she has not publicly identified. Her husband, Murray Pepper, also owns a minority share in the complex.

Phoenix officials say they have no proof that Reynolds actually gave away her interest in the 156-unit apartment complex Sept. 14--the day 75 police officers, health inspectors, fire officials and building-and-safety experts raided the site.

As officials at the scene were writing hundreds of citations alleging broken windows, faulty air conditioning units and unsafe conditions such as exposed wiring, Reynolds was issuing a statement through a Los Angeles political consultant announcing that she had given her stake in the complex to charity.

On Tuesday, Jo Ellen McBride, assistant city prosecutor in Phoenix, said the decision was made to file charges against the two corporate entities listed as owners of the 14-building complex rather than individual investors, to speed up repairs.

McBride said Phoenix officials have not been able to identify the charity to which Reynolds said she deeded her share. The two corporate entities, Canyon Square Apartments LLC and Ontologics LLC, must decide how much the charity will pay if investors are found to have broken city anti-blight laws, she added.

Representatives of the two partnerships are due in court for arraignment Nov. 30, McBride said.

Phoenix City Councilman Phil Gordon said he isn’t convinced that Reynolds actually gave away her share of the apartment complex.

In a letter sent Tuesday to Maricopa County Atty. Rick Romley, Gordon asked that the county prosecutor “conduct a criminal investigation of the property to determine whether the ‘owners’ of Canyon Square LLC have violated any state laws.”

In an interview Tuesday, Gordon said the matter is “far from closed.” Reynolds, he added, “has the legal and moral responsibility to deal with this property.”

Reynolds’ spokesman, Howard Sunkin of the political consulting firm Cerrell Associates, disagreed. “The property has been conveyed to a charity, period. We are not hiding anything. That would be fraud,” Sunkin said. Gordon “is on a fishing expedition, and he’s not going to come up with any fish.”