Siphoning of Payments for Homes Alleged

An Orange County developer who left several housing tracts in Southern California unfinished is under investigation for allegedly using money received for home upgrades to pay off his company’s bills instead.

Records filed in Los Angeles County Superior Court show that Timothy N. Roberts, a Villa Park resident, is the subject of a probe into allegations of grand theft, fraud and illegal diversion of funds intended for the homes at La Vina Estates in Altadena.

A search warrant affidavit said investigators are trying to determine the amount involved.

A nine-page statement filed Oct. 28 by Los Angeles County district attorney investigator Peter A. Parsons said a former salesperson who worked for Roberts at La Vina told investigators “there were no funds to complete the building project because Roberts was stealing the money.” A former business partner of Roberts’ also told investigators that Roberts “stole” money from the La Vina project, court records show.

According to court documents, Roberts told investigators: “There was a lot of stealing from Paul to pay Peter that went on,” but he denied using the money for his own purposes. A prosecution statement alleges that Roberts diverted funds to cover expenses, corporate overhead, contractors and payroll.

Roberts declined to comment Friday. Parsons, the lead investigator in the Los Angeles County case, said only that Roberts “is under criminal investigation.”

At issue is money that buyers paid up front for improvements to their new homes when they signed contracts with Roberts’ company, Compass Homes. The upgrades included tile work, kitchen appliances and cabinets. Investigators believe Roberts collected hundreds of thousands of dollars or more for the upgrades. The funds were supposed to remain impounded for that purpose.

But according to one example in Parsons’ affidavit, Roberts diverted $108,949 given to him by home buyers to accounts his company had at three Orange County banks. The money was supposed to have been deposited at Orange Coast Title and Escrow to pay for upgrades to the homes, according to prosecutors. Court records say the buyers of the La Vina homes lost all of the money they paid for such work.

Compass Homes abandoned developments at La Vina as well as two Orange County tracts, Yorba Linda Estates in Yorba Linda and Hewes Estates in Orange. The Orange County developments are not part of the Los Angeles County district attorney’s probe.

The state Department of Real Estate has issued four desist-and-refrain orders to stop Roberts from developing projects in Los Angeles, Orange and Riverside counties.