BEL AIR—On Monday, November 30, the United States Attorney’s Office for the Central District of California announced that a new indictment in a case against former Los Angeles City Councilman Jose Huizar added five defendants, including a former Deputy Mayor.
A federal grand jury added the defendants to a criminal case alleging a widespread corruption scheme that was led by Huizar. Former Los Angeles Deputy Mayor Raymond Chan is among the defendants. The racketeering case accuses Huizar and his associates of unlawfully obtaining financial benefits from developers in exchange for favorable treatment on pending real estate development projects.
Huizar, 52, of Boyle Heights was charged in July in a 34-count indictment that alleged a conspiracy to violate the Racketeer Influenced and Corrupt Organizations (RICO) Act in which Huizar agreed to accept $1.5 million in illegal financial benefits. The racketeering charge alleged 402 acts that Huizar and other conspirators committed to further their criminal enterprise, including honest service fraud, bribery, and money laundering. The 41-count indictment that was unsealed on Monday, November 30, adds 50 acts to the RICO conspiracy count.
Former Los Angeles Deputy Mayor Raymond She Wah Chan, also known as “She Wah Kwong,” 64, of Monterey Park, is charged with RICO conspiracy, honest services fraud, bribery, and lying to federal agents. The billionaire chairman and president of a global development company headquartered in China, Wei Huang, 55, of San Marino, faces charges of honest services fraud, bribery, and Travel Act Violations.
Also named in the same counts as Huang include Shen Zhen New World I, LLC, Huang’s U.S.-based company, which acquired the L.A. Grand Hotel Downtown for $90 million and planned to redevelop it into a 77-story tower. Dae Yong Lee, also known as “David Lee,” 56, of Bel Air, a developer with several properties in Los Angeles, is charged with honest services fraud, and obstruction. Also named in the same counts as Lee include 940 Hill, LLC, a Lee-owned company that purchased a South Hill Street property in downtown Los Angeles for $9 million and planned to redevelop it into a mixed-use development.
The indictment charges an additional 14 counts of honest wire fraud, 4 counts of traveling interstate in aid of racketeering, 2 counts of honest services mail fraud, 9 counts of bribery, 1 count of structuring cash deposits to conceal bribes, 5 counts of money laundering, 1 count of alteration of records in a federal investigation, 1 count of making a false statement to a financial institution, 1 count of tax evasion and 2 counts of making false statements to federal law enforcement.
“The scope of corruption outlined in this indictment is staggering. As the indictment alleges, Huizar, Chan and their network of associates repeatedly violated the public trust by soliciting and accepting numerous cash bribes and other financial benefits, turning Huizar’s City Council seat into a money-making criminal enterprise. Powerful developers, operating through well-connected lobbyists, eagerly participated in the schemes to get preferential treatment for their downtown projects. This detailed indictment, which lays bare these backroom deals, should prompt a serious discussion as to whether significant reforms are warranted in Los Angeles city government,” said United States Attorney Nick Hanna in a statement.
“The charges announced today allege wholesale corruption and outline the way in which Huizar and Chan brokered their powerful positions to gain personally, politically and financially by selling to the highest bidders in a stunning betrayal of the Angelenos they swore an oath to serve. I’m proud of the investigators and prosecutors who investigated this case and methodically uncovered – then dismantled – abject corruption in one of America’s largest cities, with the shared goal of restoring trust in city government,” said Assistant Director in Charge of the FBI’s Los Angeles Field Office, Kristi K. Johnson in a statement.
Chan and Huizar allegedly operated the “CD-14 Enterprise,” named for City Council District 14, which Huizar represented from 2005 until this year. Huizar’s former special assistant George Esparza, 33, of Boyle Heights, and George Chiang, 41, of Granada Hills, pleaded guilty in May 2020 for their participation in the RICO conspiracy. Allegedly, CD-14 Enterprise members solicited political contributions by foreign nationals in order to maintain the political power of the enterprises.
Huizar is charged with accepting over $800,000 in benefits from Huang. At Chan and Huizar’s request and after he helped prevent a planned merger that would have eliminated Chan’s department, Huang provided $600,000 to fund a settlement of sexual harassment lawsuits filed against Huizar by a former CD-14 staffer. Huang was also planning to redevelop the L.A. Grand Hotel into the tallest tower west of the Mississippi, which would require Huizar’s help as well as city approval. Chan allegedly lied to FBI agents about his participation in this arrangement of payments.
Chan is being charged with several counts of honest services fraud and bribery for agreeing to accept over $100,000 for acts to benefit a project by Chinese developer Shenzhen Hazens while he was deputy mayor. Chan is also being charged with facilitating a bribe agreement where Hazens domestic subsidiary, Jia Yuan USA Co. Inc., would contribute $100,000 to a relative of Huizar running for the CD-14 seat in exchange for votes to approve the project.
In October 2020, Jia Yuan, paid over $1 million to resolve the government’s investigation in regards to this case, which included illegal campaign contributions and bribery. In a non-prosecution agreement, Jia Yuan agreed to cooperate with the investigation and admitted to providing benefits to Huizar before Huizar voted to approve the project.
Allegedly, Lee provided $500,000 in cash for Esparza and Huizar in exchange for Huizar’s help in resolving a labor organization appeal on the 940 Hill development project.
According to court documents, Lee provided bags filled with cash to Justin Jangwoo Kim, a Huizar fundraiser, to deliver to Huizar and Esparza. Kim pleaded guilty to a federal bribery offense in May 2020. Lee and 940 Hill are also charged with falsifying tax and accounting records in an attempt to cover up the bribe.
The RICO conspiracy, obstruction, honest services fraud, and money laundering charges each carry a maximum sentence of 20 years. The charge of making false statements to a financial institution has a maximum sentence of 30 years. The bribery charges each carry a maximum sentence of 10 years. The charges of structuring, making false statements to law enforcement, tax evasion, and interstate travel in aid of racketeering have maximum sentences of 5 years.
With the charges against Lee, Huang, and Chan, nine total individuals have been charged as a result of “Casino Loyale,” the ongoing corruption investigation in Los Angeles City Hall that is being conducted by the United States Attorney’s Office and the FBI. 940 Hill and Shen Zhen New World I are the first corporate entities that have been formally charged.
A trial date is set for Huizar for June 22, 2021.
In addition to Kim, Chiang, Esparza, longtime City Hall lobbyist, Morris Goldman, pleaded guilty for his participation in a bribery scheme in which a developer agreed to make political donations in exchange for Huizar’s support of a project. Goldman’s sentencing is scheduled for August 23, 2021. Sentencing for Esparza is scheduled for February 8, 2021, and sentencing for Kim and Chiang is scheduled for February 22, 2021.
Mitchell Englander, former Los Angeles City Councilman pleaded guilty in July 2020 to charges of scheming to falsify material facts related to trips he took to Palms Springs and Las Vegas. During the trips, Englander accepted cash benefits from a businessperson. Sentencing is scheduled for January 25, 2021.
Anyone with information related to this or other public corruption matters is encouraged to contact the FBI’s Los Angeles Field Office at (310) 477-6565.