Photo by Heath Haussamen
A judge has agreed to dismiss the State Investment Council’s civil case against a bond attorney involved in the housing authority scandal and that attorney’s counterclaims against the state agency.
The investment council (SIC) had been suing bond attorney Robert Strumor, along with former Region III Housing Authority Director Vincent “Smiley” Gallegos, to try to recover some or all of the $5 million in bond money that was lost when Region III defaulted on the bonds in 2006.
The SIC had accused Strumor, once one of the most prominent bond attorneys in the state, of misrepresenting the facts as he sold the SIC on the bond proposal and negotiated the terms of those bonds.
In response to the SIC lawsuit, Strumor filed a counterclaim alleging that the SIC failed “to exercise reasonable care selecting and purchasing bonds which are at issue in this case.” Strumor claimed that he had incurred attorneys’ fees and been exposed to liability as a result of the SIC’s actions, and he sought damages.
On Feb. 19, Strumor, his law firm – which was also a party in the lawsuit – and the SIC filed a joint motion to dismiss the claims against Strumor and Strumor’s counterclaims. District Judge Nan Nash approved an order to dismiss three days later.
The claims and counterclaims were dismissed with prejudice, meaning they cannot be refilled.
The SIC’s civil lawsuit against Gallegos remains – as does the attorney general’s pending criminal case against Gallegos, Strumor and two others – which is why SIC spokesman Charles Wollmann said he could not comment on the dismissal of the claims and counterclaims involving Strumor.
Much of the state’s housing authority system collapsed in 2006 when Region III defaulted on the bonds. Though the bond money was only supposed to be spent on housing, much of it was spent to prop up the administration and operations of Region III and some other housing authorities across the state and on other questionable activities.
In addition to the SIC lawsuit and the criminal charges brought by the attorney general, the state auditor has released a report that he said indicates the housing authorities were “a colossal failure.”