July 30, 2020

USA: Los Angeles Democrat City Councilman Jose Huizar Was Arrested On Federal RICO Charge. He Accepted $1.5 Million In Bribes And Other Benefits To Approve Or Stall Large Building Projects.

KTLA 5 published June 23, 2020: L.A. Councilman Jose Huizar arrested, faces federal charges in ‘pay-to-play’ corruption probe. Update: City Councilman Jose Huizar was accused of accepting more than $1.5 million in bribes and other benefits to approve or stall large building projects and shape the Los Angeles development landscape, prosecutors said on June 23.

U.S. Dept. of Justice
Tuesday, June 23, 2020

LOS ANGELES – Special agents with the FBI this morning arrested Jose Huizar, an elected member of the Los Angeles City Council, on a federal racketeering charge that alleges he led a criminal enterprise that used his powerful position at City Hall to solicit and accept lucrative bribes and other financial benefits to enrich himself and his close associates in exchange for Huizar taking official actions favorable to the developers and others who financed and facilitated the bribes.

Huizar, 51, of Boyle Heights, was taken into custody at his home without incident and is expected to make his initial appearance this afternoon in United States District Court in downtown Los Angeles.

Huizar was arrested pursuant to a federal criminal complaint filed on June 22 and unsealed this morning. The complaint charges Huizar with one count of conspiring to violate the Racketeer Influenced and Corrupt Organizations (RICO) Act and alleges that, as part of the criminal enterprise, he and his associates violated a series of laws, including bribery, honest services fraud, extortion and money laundering.

“This case pulled back the curtain on rampant corruption at City Hall,” said United States Attorney Nick Hanna. “Councilman Huizar violated the public trust to a staggering degree, allegedly soliciting and accepting hundreds of thousands of dollars in bribes from multiple sources over many years. Using the power of his office to approve or stall large building projects, Huizar worked through a web of other corrupt city officials, lobbyists, consultants and developers to line his pockets and maintain his hold on Council District 14, which he turned into a money-making criminal enterprise that shaped the development landscape in Los Angeles.”

“Mr. Huizar was busy enjoying the fruits of his alleged corruption while his criminal enterprise sold the city to the highest bidder behind the backs of taxpayers,” said Paul Delacourt, the Assistant Director in Charge of the FBI’s Los Angeles Field Office. “As we continue to investigate this case, we urge residents, business owners and city employees to come forward with information about bribery and illegal practices in government. The FBI relies on the cooperation of others to build cases that successfully root out corruption in order to restore integrity in public office.”

Huizar has represented Council District 14 (CD-14), which includes downtown Los Angeles and its surrounding communities, since 2005. In addition to representing an area that has experienced a commercial real estate boom in recent years, Huizar for several years was chair of the city’s influential Planning and Land Use Management Committee, a position he lost after the FBI executed search warrants at his city offices and personal residence in November 2018. During the search of Huizar’s home, agents seized approximately $129,000 cash that was stashed in his closet.

“The federal investigation has revealed that Huizar operated a pay-to-play scheme in the City, utilizing and commodifying the powerful Council seat of CD-14, whereby he solicited and accepted financial benefits from international (primarily Chinese) and domestic developers with projects in the City in exchange for favorable official actions,” according to the affidavit in support of the criminal complaint.

The 116-page affidavit alleges that Huizar operated the “CD-14 Enterprise,” along with co-conspirator members, including “Individual 1,” a former general manager of the Los Angeles Department of Building and Safety and former deputy mayor; George Esparza, Huizar’s former special assistant; and real estate development consultant George Chiang. Members and associates of the criminal enterprise referred to Huizar as their “boss,” operated as a criminal organization, and worked together for common purposes, the complaint alleges. The CD-14 Enterprise allegedly had several objectives, including 1) enriching its members and associates through means that included bribery, extortion, and honest services fraud, 2) advancing its political goals and maintaining its control and authority, 3) concealing the enterprise’s financial activities, and 4) protecting the enterprise by concealing its activities and shielding the enterprise from detection by law enforcement, the city, and the public.

In recent weeks, both Esparza and Chiang agreed to plead guilty to the same RICO charge that Huizar now faces.

The CD-14 Enterprise was created in early 2013 by Huizar and Individual 1 “at a time when each of them faced significant threats to their political and professional careers,” according to the affidavit. Individual 1, who maintained close relationships with Chinese developers, introduced Huizar to “Chairman E,” a Chinese billionaire who runs a multinational development firm and who owns a hotel in Huizar’s district.

In 2014, Individual 1 facilitated an arrangement whereby Chairman E provided $600,000 in collateral to fund a settlement of a sexual harassment lawsuit filed against Huizar by a former CD-14 staffer, allegations that threatened his 2015 re-election campaign. In addition, Huizar directly and indirectly accepted cash and casino gambling chips on more than a dozen lavish trips to Las Vegas – trips that included rides on private jets and stays at luxurious casino villas, one of which cost over $38,000 per night. The complaint also alleges Huizar accepted a trip to Australia and other benefits from Chairman E. In exchange, Chairman E asked for a series of favors from Huizar over time.

Ultimately, Chairman E provided over $800,000 in benefits to Huizar so that Huizar would assist Chairman E’s ambitious plans to redevelop his property in CD-14 and build the tallest building west of the Mississippi River, according to the affidavit.

In a second scheme, “Developer C” agreed to pay a $500,000 cash bribe to secure Huizar’s help in resolving a labor organization’s appeal of a major real estate development which, when resolved, would save the developer millions of dollars. After a middleman, Justin Jangwoo Kim, collected $500,000 cash from Developer C, Kim and Esparza decided to keep some of the money for themselves. Kim pleaded guilty on June 3 to bribery charges and admitted facilitating the bribe from Developer C.

A third major bribery scheme outlined in the affidavit involves “Company D,” another Chinese real estate firm that wanted to develop a large mixed-used project in CD-14. In exchange for Huizar’s support of the project, Company D agreed to hire Huizar “Associate 1” as a consultant to perform work – real estate reports that discussed development opportunities – that actually was completed by Chiang. The affidavit alleges that Company D also financed part of a Huizar family trip to China and agreed to contribute $100,000 to a political action committee that would benefit the campaign of Huizar’s close relative, who Huizar intended to replace him on the City Council after he was termed out in 2020.

Other developers made donations to two PACs that would benefit “Relative A-1’s” campaign in exchange for Huizar taking official action to support their projects, the complaint alleges. One series of donations was made by “Company M” and facilitated by “Executive M,” who allegedly furnished Huizar with opposition research against two female staffers who had sued Huizar for sexual harassment in 2018. With Huizar’s help, Company M was able to get final approval in the fall of 2018 to construct a 35-story project in the Arts District with “minimal” affordable housing units and union labor requirements that saved the company an estimated $14 million, the affidavit alleges. Company M later bragged to its employees that this was a “truly amazing” feat “in a wealthy opinionated hipster community,” according to the affidavit.

The complaint alleges a series of additional corrupt acts, including bribes to Huizar from “Businessperson A,” who wanted to develop business opportunities with Huizar’s help. Businessperson A allegedly provided Huizar a $10,000 monthly cash retainer, $10,000 worth of hotel accommodations on 21 separate occasions, and approximately $18,000 in lavish gifts that included suits, shoes and meals.

Huizar allegedly leveraged his official position to pressure developers to make donations to Relative A-1’s campaign to ensure Huizar’s continued influence in the city and to steer work towards companies linked to his associates, including the law firm that employed Relative A-1, regardless of any legitimate business need.

The complaint affidavit concludes by outlining Huizar’s concealment of illicit benefits, including by instructing his special assistant on how to avoid bank reporting requirements, using his family members to launder hundreds of thousands of dollars in bribes, making false statements on a bank loan application and failing to report his illicit benefits on tax returns and ethics disclosure forms. The complaint also alleges that Huizar engaged in obstructionist conduct, including attempting to influence other witnesses and lying to federal prosecutors and the FBI.

A criminal complaint contains allegations that a defendant has committed a crime. Every defendant is presumed innocent until and unless proven guilty beyond a reasonable doubt.

The RICO conspiracy charge alleged in the complaint carries a statutory maximum sentence of 20 years in federal prison.

The cases against Huizar and his associates in the CD-14 Enterprise are being prosecuted by Assistant United States Attorney Mack E. Jenkins, Chief of the Public Corruption and Civil Rights Section, and Assistant United States Attorneys Veronica Dragalin and Melissa Mills, also of the Public Corruption and Civil Rights Section.

Huizar is the fifth person to be charged in the ongoing corruption investigation being conducted by the FBI and U.S. Attorney’s Office. The other four defendants have agreed to plead guilty.

Chiang is scheduled to plead guilty on June 26 before United States District Judge John F. Walter.

The court has yet to schedule a hearing for Esparza to plead guilty.

Kim is scheduled to be sentenced by Judge Walter on August 17.

Former Los Angeles City Councilman Mitchell Englander is scheduled to plead guilty on July 7 to charges of scheming to falsify material facts related to trips he took to Las Vegas and Palm Springs that were funded by Businessperson A.

Any member of the public who has information related to this or any other public corruption matter in the City of Los Angeles is encouraged to send information to the FBI’s email tip line at pctips-losangeles@fbi.gov or to contact the FBI’s Los Angeles Field Office at (310) 477-6565.
U.S. Dept of Justice
Monday, March 9, 2020

LOS ANGELES – A former Los Angeles city councilman surrendered to FBI agents this morning to face criminal charges that he obstructed an investigation into him accepting cash, female escort services, hotel rooms and expensive meals from a businessman during trips to Las Vegas and Palm Springs, and later lied to the FBI about his conduct.

Mitchell Englander, 49, of Santa Monica, was taken into custody after being named in a seven-count indictment returned by a federal grand jury on January 16. Englander is expected to be arraigned this afternoon at 2:00 in the Roybal Federal Building and Courthouse.

The indictment charges Englander with one count of participating in a scheme to falsify material facts, three counts of making false statements, and three counts of witness tampering.

Englander represented Los Angeles Council District 12 in the San Fernando Valley from July 2011 until he abruptly resigned on December 31, 2018, when he had almost two years left on his term. Among his other duties, Englander served as the Council President Pro-Tempore and was on the Planning and Land Use Management (PLUM) Committee, which oversees many of the most significant commercial and residential development projects in the City of Los Angeles.

The indictment alleges that he schemed to cover up his acceptance of cash payments, expensive meals and escort services from a businessman – identified in the indictment as Businessperson A – who operated companies in Los Angeles relating to major development projects and sought to increase his business opportunities in the city. Two months after the Las Vegas trip, Businessperson A began cooperating with the FBI in a public corruption investigation focused on suspected “pay-to-play” schemes involving Los Angeles public officials.

According to the indictment, from August 2017 through December 2018, Englander knowingly and willfully falsified and concealed material facts pertaining to this federal public corruption investigation. Specifically, Englander covered up facts that he had accepted items of value during June 2017 trips to Las Vegas and Palm Springs, the indictment alleges.

On that trip, when he was accompanied by two city staffers, a lobbyist and a real estate developer, Englander accepted from Businessperson A an envelope with $10,000 in cash, services from a female escort, hotel rooms, $1,000 in casino gambling chips, $34,000 in bottle service at a nightclub, and a $2,481 dinner at a restaurant, according to the indictment. Later, at a golf tournament in Palm Springs on June 12, 2017, Businessperson A allegedly gave Englander an envelope containing $5,000 in cash. Shortly after the trips, Englander arranged for Businessperson A to pitch his business to a friend of Englander’s who was a developer.

In August 2017, after he learned about the FBI’s public corruption investigation, Englander privately sent an encrypted message to Businessperson A via the online messaging service Confide, indicating that he now wanted to reimburse him for portions of the June 2017 Las Vegas trip, the indictment alleges.

The indictment alleges that, on at least three occasions, Englander attempted to corruptly persuade Businessperson A to provide false and misleading information, and omit relevant information from the FBI and federal prosecutors conducting the public corruption investigation. On February 6, 2018, Englander allegedly instructed Businessperson A to lie to the FBI, withhold material information from the FBI, and how to answer certain questions from the FBI, including questions about escort services provided by Businessperson A and Englander’s purported attempts to reimburse Businessperson A. On February 12, 2018, Englander allegedly met Businessperson A in Englander’s car and, after Englander turned up the car stereo music to a loud volume to obstruct possible listening devices, Englander again repeatedly instructed Businessperson A to lie to the FBI while driving in a circle around the block to conceal their meeting.

The indictment further alleges that Englander made false statements to the FBI and federal prosecutors on three separate occasions in 2017 and 2018. For example, on February 7, 2018, Englander falsely stated that he and Businessperson A had not discussed the FBI or its investigation, and that he did not instruct anyone on what to say to the FBI. On December 31, 2018, the day he resigned from the Los Angeles City Council, Englander again met with the FBI and federal prosecutors, and made additional false statements about receiving personal benefits from Businessperson A, and also falsely stated that he encouraged Businessperson A to “be transparent, and share everything” with the FBI, the indictment alleges.

If convicted of the seven charges in the indictment, Englander would face a statutory maximum penalty of 50 years in federal prison.

An indictment contains allegations that a defendant has committed a crime. Every defendant is presumed innocent until and unless proven guilty beyond a reasonable doubt.

The case against Englander is part of an ongoing public corruption investigation being conducted by the FBI and the U.S. Attorney’s Office. Any member of the public who has information related to this or any other public corruption matter in the City of Los Angeles is encouraged to send information to the FBI’s email tip line at pctips-losangeles@fbi.gov or to contact their local FBI Field Office. In Los Angeles, the FBI can be reached 24 hours a day at (310) 477-6565.

This case is being prosecuted by Assistant United States Attorney Mack E. Jenkins, Chief of the Public Corruption and Civil Rights Section, and Assistant United States Attorneys Veronica Dragalin and Melissa E. Mills of the Public Corruption and Civil Rights Section.
NBC News, Los Angeles local
written by Staff
Tuesday July 7, 2020

Ex-Los Angeles City Councilman Mitch Englander pleaded guilty Tuesday to a federal criminal charge for obstructing an investigation into whether he took cash, escort services and other gifts from a businessman involved in major real estate development projects in the city.

Englander is among four defendants to agree to plead guilty in the continuing federal probe of City Hall that ensnared Los Angeles City Councilman Jose Huizar -- and will be the third to formally enter his plea before a judge.

The former councilman faces up to five years in prison on the single count of scheming to falsify material facts, according to the U.S. Attorney's Office. A sentencing date will be set by U.S. District Judge John F. Walter after the plea is taken.

Sentencing was set for Sept. 28.

Englander issued a brief statement through his attorney after the hearing.

"I accept full responsibility for my conduct and I am truly grateful to my family and friends for their support," he said. "I look forward to continuing to contribute to my community and helping others."

Englander represented Los Angeles Council District 12 in the San Fernando Valley from July 2011 until he resigned two years ago after investigators began asking questions about his activities.

Among his other duties, Englander, 49, served as the council president pro-tempore and was a member of the powerful Planning and Land Use Management Committee (PLUM), which oversees many of the city's biggest commercial and residential development projects.

According to his plea agreement, Englander, of Santa Monica, schemed to cover up cash payments, costly meals and other gifts offered to him from a businessman who operated companies in Los Angeles relating to big development projects and sought to increase his business opportunities in the city.

Two months after a Las Vegas trip with Englander and others in 2017, the businessman began cooperating with the FBI in an investigation focused on suspected pay-to-play schemes involving Los Angeles public officials -- and made secret recordings of Englander's interactions with him, federal prosecutors said.

Huizar, the central figure in the five-year probe of City Hall, is charged with accepting $1.5 million in bribes from developers in exchange for his support of downtown building projects. Huizar, who was suspended from the council following his arrest last month, said he "intends to respond to the government's allegations in court," not in the media, according to his attorneys.

Huizar represented downtown L.A. and was the chairman of PLUM. After FBI agents raided his home and offices in November 2018, Huizar was removed from his committee assignments, including his role in the land use management committee. He is scheduled for arraignment on July 20.

Real estate development consultant George Chiang pleaded guilty June 26 to a federal racketeering charge for playing a role in a scheme allegedly run by Huizar in which a Chinese real estate company bribed city officials in exchange for approval to build a 77-story skyscraper in the councilman's district. The judge is expected to sentence him on Feb. 22.

Also last month, former City Hall fundraiser Justin Kim pleaded guilty to a federal bribery charge for helping a real estate developer pay off a Los Angeles City Council member -- thought to be Huizar -- for help with a major development project. Kim's sentencing hearing is also scheduled for Feb. 22.

Former Huizar aide George Esparza has agreed to plead guilty on July 22 to the racketeering conspiracy count and has been cooperating in the investigation.

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