Two officers of P.I. Properties Inc. promised federal officials in the mid-1970s that an audit of their firm's management of the Clifton Terrace apartment complex was being performed, but they never produced it, a federal housing official testified yesterday.
Juanita C. Burgess, then a Department of Housing and Urban Development loan specialist and now the agency's loan management branch chief, said that Robert E. Lee, the firm's general manager, wrote her in December 1976 that an audit would soon be forthcoming and that Mary Treadwell, the company's president, wrote a similar letter a month later.
However, Humphrey Williams and Joseph Bernard Ellois, two auditors Pride officials said they hired to produce the audit, both testified yesterday at Treadwell's fraud and conspiracy trial that they only took a cursory look at P.I. Properties' records on Thanksgiving weekend in 1976 and did no further work on an audit.
"I don't think the records were in the kind of shape we'd expect them in to do an audit," Ellois said.
Moreover, Williams said that their accounting firm, known as Williams, Williams and Ellois of New Jersey, "existed on letterhead only" and that it was not registered or licensed by anyone to do business. Ellois said the minimal work they did on Thanksgiving weekend 1976 was the first and last time the firm performed any auditing tasks at all.
The two men said they were asked to look at P.I. Properties' books by Ronald S. Williams, who is not related to Humphrey Williams, but at the time was Treadwell's boyfriend and later became her third husband. The couple has since divorced. Williams is now on three years' probation after pleading guilty to giving false statements to prosecutors in connection with the Treadwell investigation.
Both Humphrey Williams and Ellois said under cross-examination by Robert G. Joseph, one of Treadwell's court-appointed attorneys, that they did not see Treadwell at Clifton Terrace on the Thanksgiving weekend during which they reviewed the records.
That testimony conflicted with a statement made earlier in the trial by Zellene Laney, a former P.I. Properties' bookkeeper and one of the government's key witnesses, that starting on that Thanksgiving weekend Treadwell, Lee and Treadwell's sister, Joan M. Booth, Clifton Terrace's resident manager, systematically altered the apartment complex's records to make it appear that money spent elsewhere had actually been spent at Clifton Terrace.
Burgess, Humphrey Williams and Ellois presented their testimony on the 16th day of Treadwell's federal court trial before a jury of eight women and four men. Treadwell is accused of using P.I. Properties to defraud the federal government and the impoverished tenants at Clifton Terrace of thousands of dollars.
Burgess said she became worried about P.I. Properties' ownership and management of Clifton Terrace, a dilapidated complex in Northwest Washington, in the summer of 1976, a point at which she said "the project had not made mortgage payments in almost a year."
She said that while the firm was neglecting to make its monthly mortgage payments, it listed "questionable" expenditures on monthly reports to HUD, such as $28 for purchase of flowers, $1,221 for office furniture, $714 for car repair payments, $1,000 for home improvements elsewhere and $1,250 to Ronald Williams for the audit that was never produced.