CITY HALL — A senior design manager employed by Advanced Development & Investment Inc. helped guide renovations at City Councilman John Drayman’s condo at the same time the firm was allegedly bilking the city of millions in tax dollars, documents show.
Drayman said he was unaware at the time of ADI connections to anyone hired to perform the renovations, which were needed to bring the rest of his condo in line with work completed by his homeowner’s association after a pipe burst, causing major flood damage.
ADI — a prominent affordable housing developer — is under federal investigation for allegedly submitting fraudulent bills to cities and transferring tens of millions of dollars to personal accounts. In Glendale — where the City Council committed more than $33 million for four ADI projects since 2005 — the alleged fraud is estimated to reach into the millions.
Six ADI subcontractors worked on Drayman’s condo renovation in summer 2010. He said he had been referred to Glendale-based National Fire Systems — the lead contractor for the job — by an ADI manager, Khachik Zargarian, whom he identified as a longtime friend. The firm’s president said last year that he had learned of the job through ADI.
Drayman said he had no idea at the time that National Fire or the other companies were connected to the ADI, adding that many of the contractors had done work throughout Glendale.
But in three faxes dated June 25, July 30 and Aug. 4, Beth Navarrete — a senior project design manager at ADI’s construction arm, Pacific Housing Diversified Inc. — gave direction to a subcontractor working on Drayman’s condo.
The faxes — among documents subpoenaed by federal investigators, according to a subcontractor who declined to be named — are on Pacific Housing Diversified letterhead and include a fax number for a former ADI office.
In the faxes, Navarrete gives direction on work orders ranging from changes in grout and tile color to detailed sketches of fireplace design plans.
“The sample of kitchen tiles was disapproved by the client,” she wrote in a June 25 fax titled “Condo.”
Drayman acknowledged that he spoke with Navarrete during the renovations about a range of project details, but said he had no idea she was an ADI employee until months later, when he was told by an attorney hired by David Pasternak, the receiver appointed by a judge to oversee ADI’s assets through divorce proceedings of two company principals.
“My interaction with her had mostly to do with finishes — with floor samples, selections, stains, paints, grout, tile, selection of this one item versus another item,” he said. “I just believed that she was someone that National had hired.”
National Fire President Mike Thomassian said he knew Navarrete from working on ADI projects.
“We asked her to help us with details,” he said. “She invoiced us and we paid her and basically that was it.”
Drayman said he spoke with Navarrete through her personal e-mail and phone number and did not know she was an ADI employee.
“There was no indication for me that she was doing anything untoward, and I don’t know that she was,” he said. “To me, it is essentially no different than any of the other subs that National hired that may or may not have worked for ADI on their projects.”
Navarrete, who is still employed by the company, could not be reached for comment.
National Fire, whose president said the company had never done a residential remodel before Drayman’s project, lacked a license to do such work until September, according to state records.
Drayman has said he picked National Fire in part because the company had agreed to let him pay over a period of months, and believed they had proper licensing to do so. The project cost upwards of $100,000, Drayman said.
The company also did not file for any city-issued building permits until January, after the work was completed, according to city records.
Drayman said the company had agreed to file for permits as part of his contract. He said he immediately filed for permits when he learned of their absence.
Drayman said he has paid National Fire for the majority of work, but is still in talks regarding between $10,000 and $30,000 in disputed charges with one subcontractor.