Grand jury investigating property firms | TahoeDailyTribune.com

Grand jury investigating property firms

Susan Wood, Tribune staff writer

The El Dorado County Grand Jury is investigating the tax records of at least three South Lake Tahoe property management firms on behalf of the city.

At issue is how transient occupancy tax is charged on vacation home rentals. TOT is collected from guests by property managers and passed on to the city.

Tahoe Keys Resort, Lake Tahoe Accommodations and Accommodation Station were issued subpoenas by the City Attorney’s Office last month. Over the last few weeks, grand jury audit investigator Jerry Bova has looked at financial statements, cleaning service records and gross revenue summaries from June through August 2002.

“The issue comes down to what is subject to the TOT tax,” said South Shore attorney Dennis Crabb, who represents Tahoe Keys Resort.

Bova declined to comment Monday about the investigation, instead deferring to the grand jury report which is due by July.

Grand jury foreman Richard Brunner hopes to have a preliminary finding by April on whether the panel will issue recommendations to the city or sees criminal liability from any of the firms. He declined to declare how many companies are being investigated.

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Two property management firms expressed surprise by the inquisition. Lake Tahoe Accommodations management declined to comment.

“This has been unbelievable from my perspective. When I sat on a grand jury, we looked at public agencies, not private businesses. This is highly unusual. I see this as harassment,” Accommodation Station owner-operator Greta Hambsch said, calling it a fishing expedition.

Hambsch said she’s unaware where the complaint came from.

Brunner said Monday he’s unable to discuss the basis for any complaint as well as the number of vacation home rental agencies under scrutiny.

When asked why hotels and motels — which also charge the tax — appeared passed over in the investigation, Brunner said the city’s auditor already evaluates their tax records.

City Attorney Catherine DiCamillo also declined to comment on the reason for the inquiry.

California Hotel and Lodging Association President Jim Abrams said he’s never heard of a grand jury investigation that initiated a records request of this magnitude from any other city in the state.

“They can be called to investigate things where there isn’t any call of wrongdoing,” Abrams said. “If it’s called by the city attorney, that usually tells me it’s a government oversight issue. It could turn into something criminal, but that’s usually something the district attorney handles.”

-Susan Wood can be reached at (530) 542-8009 or via e-mail at swood@tahoedailytribune.com

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