A third former top official of the firms that ran the District's troubled Bates Street housing redevelopment project pleaded guilty to federal tax charges here yesterday.
The plea by Lawrence J. Brailsford, 54, former financial manager of the project, which received almost $13 million in federal funds, follows similar guilty pleas last summer and fall by George Holmes Jr., former president of Bates Street Associates, and Jack W. White, a former partner.
Federal prosecutors indicated that the plea marks the end of the criminal investigation of the project, once touted by Mayor Marion Barry as a showpiece of inner-city development. The project was the subject of a grand jury probe following a series of articles in The Washington Post.
Brailsford, who is a consultant, pleaded guilty to filing a false federal income tax return for 1980.
Assistant U.S. Attorney Brian M. Murtagh said Brailsford, of 2555 Pennsylvania Ave. NW, understated his 1980 taxable income by about $165,000, including $87,000 received from the Bates Street project.
R. Kenneth Mundy, Brailsford's attorney, said Brailsford acknowledged underreporting his income by $61,673 but agreed to plead guilty to a criminal information that says he "failed to report substantial gross income . . . [and] had falsely claimed deductions and expenses."
In court yesterday, Mundy told U.S. District Judge Oliver Gasch that Brailsford "denies misuse of any government funds" or "any association with wrongdoing" by Holmes or White.
Gasch allowed Brailsford to remain free on personal bond until his April 30 sentencing. He faces a maximum penalty of three years in prison and $5,000 in fines.
Sentencing dates for the other two defendants have not yet been set.
Last October, Brailsford was indicted on charges of evading federal taxes on more than $400,000 in income in 1979 and 1980. But yesterday Murtagh said the government would dismiss those charges, which carry a maximum of 10 years in prison and $20,000 in fines, in return for Brailsford's guilty plea.
The Bates Street project, near North Capitol Street and Florida Avenue NW, is the largest and most expensive housing remodeling project ever undertaken by the D.C. government. It was an attempt to create a 163-unit community in what had been one of the city's worst slums, but is still incomplete.
The city official with primary responsibility for supervising the project was then-Housing Director Robert L. Moore. After the grand jury investigation, no charges were brought against him.
Brailsford, who had been a consultant to the federal government, was a partner and financial manager of the Bates Street development firm for most of 1979 and 1980.
At the same time, Murtagh said yesterday, Brailsford continued to operate two consulting firms: the National Institute for Community Development, which later went bankrupt, and Lawrence Brailsford Associates.
Murtagh said Brailsford "wore three hats," having control of the checking account of Bates Street Associates as well as those of his own two firms and often writing checks from one to the others.
In 1980, Murtagh said, Brailsford received $198,152 from the Bates Street project, some for work that the prosecutor said was "somewhat dubious," but failed to report $87,037 of it.
He said Brailsford also received the proceeds of a $46,000 private loan to the project that the project later repaid.
The criminal information said Brailsford reported a taxable income in 1980 totaling $42,418 and paid taxes of $11,142. Murtagh said his taxable income that year from Bates Street and other sources totalled $207,192, requiring an income tax payment of $111,008.
Earlier, Murtagh and U.S Attorney Joseph E. DiGenova said the grand jury investigation had been slowed in part because it took the District government nearly a year to turn over project records. But they said this was because of poor record-keeping, not a deliberate obstruction of justice.
Brailsford's own records and those of Bates Street Associates also were "in a terrible shambles," Murtagh said yesterday.
Yesterday, with the government's agreement, Gasch said Brailsford would be allowed to make trips to London and Mexico City for his consulting business while he awaits sentencing. "He is routinely a world traveler," Murtagh remarked, "and he has always come back."