Billionaire rentals subject of probe

By Dan Nakaso
Advertiser Staff Writer

The Sonoma County district attorney's office has opened an investigation into how mold developed in some California homes owned by Japanese billionaire Gensiro Kawamoto, and what role — if any — his Honolulu attorney played in the problem.

Kawamoto in February suddenly placed about 60 O'ahu rental homes and condominiums on the market, along with 570 rentals in California, saying he needed to raise cash for a deal in Japan and the Mainland.

But the Sonoma County district attorney's office said it now suspects Kawamoto tried to evict tenants in Santa Rosa and Sacramento after they began complaining about excessive mold, which they claimed caused bloody noses, rashes, fatigue and respiratory problems.

Prosecutors in Santa Rosa and Sacramento could not provide a specific number of homes that claim mold problems. But more than 30 Kawamoto homes in the Sacramento community of Citrus Heights have been "red-tagged" by city officials because mold has made them uninhabitable, said Dani Jo Handell, who is leading the investigation through the consumer law and environmental division of the Sonoma County district attorney's office.

"A lot of homes were built very cheaply and probably have some sort of building defect where the outside isn't properly sealed," Handell said. "Mold was evident under the linoleum floors, and the linoleum would discolor and roll back. Mr. Kawamoto would simply staple the linoleum back over the water damage rather than fix the problem. When tiles started falling off of the bathroom walls, he would simply paste the tiles back up over the water damage. Years and years of this practice led to mold growing in those houses, and we believe created some health problems."

The Sonoma County district attorney's office is "also carrying on an investigation of whether or not individuals with the law firm knew there was mold and whether or not they actively attempted to prevent people from finding out about it," said Sonoma County District Attorney J. Michael Mullins. "Is it a crime? Is it a civil matter? We don't have definitive answers to all of those questions. We just think it's worthy to do some preliminary investigation."

Carol Asai-Sato, who represents Kawamoto through the Honolulu firm Alston Hunt Floyd & Ing, said: "Essentially we've addressed any problems that have been brought to our attention, including any allegations of mold or water intrusion. So I don't know what the basis of their statements are. ... Most of the alleged mold problems seem to be simple housekeeping problems."

Sonoma County prosecutors forwarded their information to the Sacramento County District Attorney's office. But the Sacramento case is only a "preliminary inquiry" so far, said Albert Locher, assistant chief deputy district attorney.

The Honolulu prosecutor's office has not received any agency complaints about Kawamoto's O'ahu properties, a spokesman said.

Reach Dan Nakaso at dnakaso@honoluluadvertiser.com or 525-8085.