First National Center owner Aaron Yashouafar, already awaiting sentencing for embezzlement in Las Vegas, is under federal investigation in connection with questioned reimbursement forms submitted to Oklahoma City officials for asbestos removal funds, sources have told The Oklahoman.
Yashouafar declined to comment Monday. A spokesman with the Oklahoma City FBI office could not confirm or deny the investigation.
Assistant City Attorney Wiley Williams, however, confirmed that the city contacted the U.S. attorney's office after the city received what were presented as copies of canceled checks written to asbestos removal subcontractors.
“We got some calls from a couple of the subcontractors who said they had not been paid,” Williams said. “We started snooping around into that and saw documentation they (Yashouafar's company, Milbank Real Estate) had produced to us that on the surface looked like they (the subcontractors) had been paid. We only reimbursed Milbank after they submitted copies of paid invoices and checks to the subcontractors.”
Williams said that after the documentation was examined by the city auditor's office, the auditors grew concerned that the check copies from 2009 were questionable.
“What we think they were doing was sending us a copy of the front of a check, and then sending us a copy of the back of another check,” he said.
Williams said he was not aware of whether the allegations, first submitted to the U.S. attorney's office in 2010, were still under investigation. But sources say the allegations are part of an ongoing federal investigation. Documents provided by the city to The Oklahoman show that during the inquiry, Yashouafar's office submitted new check copies and the subcontractors released their liens on the property.
Yashouafar led investment groups in buying First National Center in 2006 for $21 million. A foreclosure action by lender Capmark Bank was followed by a bankruptcy filing that ended with an agreement by both sides that Yashouafar would pay $12 million to close the $21 million mortgage.
That agreement came with a May 26 deadline that if not met would have resulted in the building going to a receiver who would dispose of the property. That deadline was extended three times with additional payments submitted by Yashouafar toward the $12 million. Sources have told The Oklahoman the latest deadline is this week.
Trouble with Paradise
Yashouafar, meanwhile, is at odds with the homeowners association at the Paradise Spa condominiums in Las Vegas. Homeowners association members told The Oklahoman they fear Yashouafar is trying to refinance the complex to raise money to retain control of First National Center.