Robert E. Lee pleaded guilty yesterday to conspiracy and making false statements to federal officials in connection with an alleged scheme among officials of a Youth Pride Inc. real estate spinoff company to steal and misappropriate thousands of dollars from a federally funded housing project that they managed.
Lee, 38, a former general manager of P.I. Properties, the spinoff firm, agreed to fully cooperate with prosecutors in the case and testify against the remaining defendants, Mary Treadwell and Charles W. Rinker Jr.
Lee is the third defendant in the case to plead guilty and agree to cooperate with prosecutors, leaving Treadwell as the only remaining major defendant.
She and Rinker, whom prosecutors have said they consider a minor figure in the case, are scheduled to go on trial April 19 on charges of conspiracy to defraud the government, mail fraud and wire fraud. Treadwell also is charged with three counts of tax evasion.
Both have denied any wrongdoing.
In a hearing before U.S. District Court Judge John Garrett Penn, Lee said his agreement to plead guilty and testify against Treadwell and Rinker was "not something I jumped into. I agonized many, many nights." He added that he was "convinced the government has evidence to convict me."
As part of the agreement, the government will drop all other charges against Lee, including an unrelated bad-check charge pending in D.C. Superior Court. Lee faces a maximum 10 years in prison and $20,000 in fines on one count of conspiracy and one of making false statements. His sentencing was postponed until after the trial.
Lee, Treadwell, Rinker, accountant Ronald S. Williams and Treadwell's sister, Joan M. Booth, were charged last year in a 30-count indictment with portraying P.I. Properties to government officials as a nonprofit business but actually using it to fund their own profit-making enterprises and to pay personal expenses.
The indictment alleged that operating funds from the Clifton Terrace Apartments in Northwest Washington were diverted to finance renovation work on private homes, to decorate the office of an advertising firm, to make down payments on real estate for other profit-making enterprises and to pay personal legal fees.
Assistant U.S. Attorney Stephen R. Spivack told Penn in court yesterday that had the case against Lee gone to trial, the government would have proved that he and other P.I. Properties officials never intended to operate Clifton Terrace as a non-profit venture, a condition of their loan agreements with the U.S. Department of Housing and Urban Development.
Spivack alleged that Lee used tenant escrow accounts at Clifton Terrace as collateral to borrow $25,000 for the payroll at Pride Environmental Services, a private contractor that supplied trash cans to the city. He also alleged they used the accounts as collateral for a $250,000 line of credit for P.I. Properties and for Sticks and Stones Inc., a profit-making organization involved in property acquisition and renovation.
According to Spivack, Lee intended to sell Clifton Terrace to investors and forestalled an audit by federal housing officials by falsely claiming that a private audit was already under way.
Treadwell's court-appointed attorney, John W. Nields, who was present at the hour-long hearing yesterday, declined to comment on Lee's plea. Andrew Marks, representing Rinker, also declined to comment.
Williams, Treadwell's estranged husband, pleaded guilty last April to charges of giving false statements. He was fined $5,000 and placed on three years' probation.
Joan M. Booth, Treadwell's sister and former project manager at Clifton Terrace, pleaded guilty in October to conspiracy and tax evasion. She has not been sentenced.
In addition to the guilty pleas from those two defendants, Johnny Mickens III, Youth Pride's former chief financial officer who was not named in the indictment, was placed on three years' probation last month after he pleaded guilty in a separate case to charges of income tax evasion.
Williams, Mickens and now Lee have all agreed to testify for the government, prosecutors said yesterday. There has been no indication whether Booth will testify.
Rinker, who in 1979 conducted an unsuccessful campaign for a seat on the Arlington County Board, was an officer of Youth Pride, Pride Economic Enterprises, T. Barry Associates and its division known as Kiosk Advertising, according to the indictment. He has been regarded throughout the investigation as a lesser figure in the alleged conspiracy.