Federal agents spent Tuesday morning at Dallas City Council member Don Hill's home removing more evidence.

FBI officials confirmed to News 8 that financial corruption is at the center of the investigation, which is focusing on Hill, fellow council member James Fantroy and the Southwest Housing Development Corporation.

Agents also searched the offices of Southwest Housing, which builds and manages housing for seniors and low-income families. A recent lawsuit questioned the way Southwest does business, and the company and its president need a good relationship with the Dallas City Council to survive.

Southwest Housing's founder Brian Potashnik and his wife have given at least $29,000 to Laura Miller's election campaigns, and another $10,000 to the strong-mayor campaign. Miller has been a strong supporter of the company's efforts.

"There are so many developers that come in, and you know that he's not going to flip it after he builds it and let it decline," Miller said in 2003 about Potashnik's efforts.

Potashnik has built $200 million worth of low income housing in Colorado and Texas, including 16 projects in the Dallas area. To do that, he needs federal tax credits - and the City of Dallas is one step in awarding those funds.

Potashnik takes pride in his reputation.

"Our profit is over the long-term," he said in 2003. "We own these properties for a minimum of 15 years; these are properties that I want my children to own."

The aforementioned lawsuit, filed by one of Potashnik's former employees, questions the company's integrity. It charges that company officials forged a document on City of Garland stationery, and substituted another, with the goal of obtaining bank funding for a development in that city.

News 8 has learned that the FBI and local authorities have talked to the person who filed the lawsuit last month that included the forgery charges.

Potashnik and other officials with Southwest Housing could not be reached for comment on Tuesday.

WFAA-TV's Chris Heinbaugh contributed to this report.

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Related Article:

Police investigate housing firm; Ex-employee alleges forgery; Southwest denies charges April 13, 2005 By RICHARD ABSHIRE / The Dallas Morning News

Garland police are investigating allegations of misconduct at the company that is planning to build Primrose at Crist, a senior housing complex, in partnership with Garland Housing Finance Corp.    In a lawsuit filed Feb. 28 in County Court at Law No. 1, former employee Christine Sullivan accused senior executives of Southwest Housing Development of rewriting a letter by Neil Montgomery, the city's managing director of planning, to obtain $3.9 million from Wachovia Securities. ... According to Ms. Sullivan's suit, Mr. Montgomery's Jan. 19 letter described several steps that remained for the developer to take before final approval, but the version of the letter that Southwest sent to Wachovia with Mr. Montgomery's signature had been changed to say that the project was approved except for the payment of fees.    Southwest executives were pressed for time, according to the suit, because they would lose their funding if they didn't get a "permit ready letter" to Wachovia by Jan. 20.    The suit alleges forgery, wrongful termination and slander, and seeks actual and exemplary damages. ... Mr. Bailey said that Southwest president Brian Potashnik informed Wachovia and others as soon as he learned of Ms. Sullivan's allegations. ...