CALIFORNIA—On Monday, November 30, the U.S Attorney’s Office for the Northern District of California announced that Harlan Kelly, the General Manager of the San Francisco Public Utilities Commission (SF PUC) was charged with honest services wire fraud.
Kelly, 58, of San Francisco, allegedly took part in a long-running bribery scheme and corrupt partnership with Walter Wong, a construction company executive who controlled multiple entities doing business with the city of San Francisco. A federal criminal complaint alleges that Wong provided items of value to Kelly in exchange for official acts by Kelly to benefit Wong’s business ventures. The bribes included family trips to China with meals, gifts, and hotel stays.
“Public officials owe their honest services to the people of San Francisco. Bribery scams undermine our faith in City government. Our investigation into City Hall corruption will continue,” said U.S Attorney Anderson in a statement.
“The allegations against Harlan Kelly and the nine other individuals charged in this case are extremely troubling. The citizens of San Francisco deserve nothing less than transparency, honesty, and integrity from their city officials. However, through the course of this ongoing investigation, the FBI has uncovered a pattern of criminal activity committed by those in positions of trust. The FBI is surging our resources in this investigation, and we urge anyone with information on this matter, or any other suspected public corruption, to come forward and contact the FBI,” stated FBI Special Agent in Charge Craig D. Fair.
Kelly, allegedly developed a relationship with Wong that involved several coded messages, cash exchanges, international trips subsidized or paid for by Wong, personal car services, and free meals. One complaint alleges that Wong paid travel expenses for Kelly and his family during a vacation in China and Hong Kong that was taken in March of 2016.
Allegedly Kelly’s airfare was reimbursed by Wong with a cash deposit into his bank account. Kelly acknowledged the gifts he received from Wong using an encrypted messaging application, “Thank you for the best family vacation ever! A little something for everyone!” Kelly wrote to Wong in the message.
It is further alleged that Wong was seeking a multi-million dollar contract from the SF PUC for Green Source Trading, LLC, to convert thousands of streetlights in San Francisco to smart LED technology. He also performed extensive repair work on Kelly’s residence at a substantial discount. He pleaded guilty to money laundering and conspiracy to commit honest service fraud.
Allegedly, Wong and Kelly communicated several times about the streetlight project before it was bid, and during the process, Kelly hand-delivered to Wong confidential private documents that contained inside information. Kelly is believed to have delayed the process in order to benefit Wong and give him an unfair competitive advantage in the bid process. Wong ended up withdrawing his bid due to contract changes.
Kelly is charged with one count of honest services wire fraud and faces a maximum sentence of 20 years and a fine of $250,000 if convicted as charged.
This case is being investigated by the FBI and IRS Criminal Investigation and is being prosecuted by the Corporate Fraud Strike Force of the U.S. Attorney’s Office.