As they probe the fatal fire last week that killed four tenants of an unlicensed North Philadelphia boarding house, city officials have pledged to fully investigate — and potentially prosecute — the building's owner, whose mismanagement they blame for contributing to the tragedy.
They won't be the first to do so.
Since 2006, Granite Hill Properties, a small California firm, has bought up a vast portfolio of distressed buildings in poverty-stricken neighborhoods across the city. But despite regularly drawing the scrutiny of code inspectors, tax authorities, and even the U.S. Justice Department over the last 12 years, the business and its owner, Tyrone Duren, have rented their properties unhindered to dozens of low-income tenants — often without a license to do so, an Inquirer and Daily News analysis of court records and city regulatory actions shows.
In 2016, federal prosecutors in California indicted Duren – a 47-year-old former agent of the U.S. Department of Homeland Security – alleging he used Granite Hill as a money-laundering front to hide thousands of dollars in cash he stole from drug traffickers along the Mexican border. Some of those proceeds, investigators claim, were used to finance Duren's property purchases in Philadelphia.
Two years earlier, the Department of Licenses and Inspections sued Granite Hill for running a boarding house at 1855 N. 21st St. without proper authorizations. As part of the settlement in that suit, Duren agreed to stop renting the building to tenants. And yet, when fire broke out March 20 on that building's second floor, fire investigators say, six to 10 people were living inside.
One of those tenants, whom officials have not identified, died jumping from a window to escape the flames. Three others – Alita Johnson, 25; her father, Horace McOuellem, 64; and her 3-year-old son, Haashim — were suffocated by smoke, their bodies discovered three days later in a third-floor bathroom.
Speaking at a news conference earlier this week, David Perri, commissioner of L&I, said investigators believe Granite Hill failed to install the required smoke detectors that might have saved lives in the blaze. His agency has since launched a full review of about 30 other buildings that Granite Hill owns in neighborhoods across North and Southwest Philadelphia.
Still, William Sanders, Duren's former business partner, can't help feeling that last week's tragedy might have been avoided.
For years, Sanders, of Hemet, Calif., has repeatedly tried to alert authorities in Philadelphia and California to what he described in a 2011 lawsuit as Duren's mismanagement of the properties they co-owned before their partnership dissolved.
"I'm glad they're doing something now," he said this week. "It's just a shame that it took a fire and the deaths of these people to get their attention."
Four years ago, Sanders sent an email to Philadelphia city code inspectors identifying potentially dangerous violations at 34 of Granite Hill's properties. Many, he warned, appeared to be stealing utilities or operating as unlicensed boarding houses. At others, work by unlicensed contractors threatened to put tenants at risk, his message alleged.
At 1855 N. 21st, Sanders warned then, tenants appeared to be living in the house despite the earlier court settlement that it be vacated.
City records show that L&I followed up on some of those complaints, filing enforcement actions piecemeal for various violations, and at times taking Granite Hill to court.
But the company's business continued unabated.
"We've been watching this for years," Sanders said. "It's absolutely unbelievable."
Neither Duren nor his lawyer, John Kirby, responded to multiple requests for comment this week.
But court filings in California and Pennsylvania paint a portrait of the former federal agent as an aggressive and short-tempered businessman, as likely to pull a gun on a contractor during a payment dispute — a claim detailed in a 2011 deposition — as he was to liberally quote the ancient Chinese general Sun Tzu in missives threatening his business partners.
"My family is vast and controls a large section of the city," he once warned Sanders in an email. In another, he boasted: "I am tied into Philadelphia. Nothing happens there without my knowledge."
Despite his holdings in Philadelphia, his hometown, Duren lives full time in a luxuriously furnished $700,000 house outside San Diego and frequently travels to Canada, the Bahamas, the Turks and Caicos Islands, the Cayman Islands, Russia, Israel, and Europe, court records show.
When federal agents confronted him in 2014 with their belief that he was funding that lavish lifestyle with stolen drug proceeds, Duren lashed out.
"I'm a f–ing millionaire," he said, according to a transcript included in court filings in that case. "I move anywhere between $7 and $800,000 in cash every year, OK? I don't need to f– with some little dirtbag's money."
Although he has been charged only with one 2013 theft,. from a car he stopped near San Ysidro, Calif., prosecutors have said in court papers that they suspect him of taking far greater sums during his six-year career with Homeland Security.
Duren, free on bail but confined under court order to California, has denied the allegations and is scheduled for trial in June. But as the case has played out in federal court in San Diego, investigators have frequently thrown up their hands while trying to untangle the web of holding companies, multiple LLCs, and more than 25 bank accounts through which Duren and Granite Hill have moved their assets over the last several years — including one opened in Croatia after Duren learned of the federal probe.
"Agents discovered numerous suspicious hard-money loans, payments, rental agreements and other business practices that are inconsistent with what would be expected with a property management company," Homeland Security Special Agent Thomas Miller wrote in an affidavit last year. "A legitimate company would not need numerous [burner] phones and over 25 bank accounts. Duren's business practice … and his general banking activities are indicative of criminal activity."
While it's clear that somehow Duren has access to hundreds of thousands of dollars — which he is charged with depositing in small increments in his accounts to avoid federal reporting requirements — prosecutors say they can find no legitimate source for that income.
Granite Hill's tax returns suggest the company is barely breaking even, and Duren has not filed personal income tax returns for several years.
The company's tangled finances and corporate structure may explain why efforts by local investigators to probe the company in the past have produced few results.
But in the wake of last week's fire, city officials are pledging they won't be deterred this time.