LOS ANGELES (CN) — A Chinese real-estate developer was found guilty of bribing former LA City Councilman José Huizar with lavish gambling trips and a $600,000 loan in exchange for his support in getting approval for a planned 77-story mixed-use development in downtown LA.
A federal jury returned a verdict Friday morning after about 3 hours of deliberation, finding Shen Zhen New World LLC I guilty of all eight counts it was charged with, including honest services wire fraud, interstate and foreign travel in aid of bribery, and bribery concerning programs receiving federal funds.
The company, a U.S. subsidiary of China-based Shenzhen New World Group, faces a multimillion dollar fine at sentencing, Assistant U.S. Attorney Susan Har said after the verdict was read.
"We are always grateful when the jury sees the facts the way we do," Har said, adding that "it's definitely not a bad thing" to get a verdict this quickly.
The Department of Justice indicted Shen Zhen New World and its owner, billionaire Wei Huang, with buying the help of Huizar, who the DOJ accuses of running a sprawling pay-to-play scheme in downtown LA. Huizar got invited to as many as 19 all-expenses-paid gambling trips to Las Vegas between 2013 and 2018, where he stayed in luxury suites, dined at the most expensive restaurants, received over $200,000 in casino chips from Huang, and was given his pick of prostitutes.
Huang also took Huizar on a one-week vacation to Australia, again on the developer's dime, and arranged a $600,000 loan for Huizar to settle a sexual harassment lawsuit ahead of his reelection campaign in 2015. In exchange, Huang sought Huizar's support redeveloping a hotel in downtown LA he had bought in 2010 into the largest skyscraper west of the Mississippi. Huang, a resident of Shenzhen, left the U.S. in 2018 after he got wind that the FBI was closing in on Huizar and hasn't returned to face the charges against him.
"We are going to review our options," Richard Steingard, an attorney for Shen Zhen New World LLC I, said after the verdict was read. "It's safe to say that there will be an appeal."
The trial against Shen Zhen New World is the second in a series of three resulting from the FBI's investigation of the alleged scheme Huizar ran to solicit bribes from real-estate developers in exchange for advancing their projects through the city's approval process. Dae Yong Lee, a local investor and developer, has already been convicted at trial of paying a $500,000 bribe for Huizar's assistance, and the former politician is scheduled to go on trial himself early next year.
Huizar, 54, served as downtown LA's representative on the City Council from 2005 to 2020, a period that saw an unprecedented development boom in the area with foreign money pouring into ambitious residential and hotel projects. He also chaired the city's influential Planning and Land Use Management Committee until November 2018, when the FBI raided his offices and home. He was the first sitting elected LA official to face federal racketeering charges.
The government claims that, after Huang had bought two hotels in LA in 2010 and 2011 to redevelop into signature properties, he was put in touch with Huizar who was the "king of downtown" and who, through the power he exercised on the city's PLUM committee, could advance, stall or kill such large-scale projects.
The FBI became aware of the intimate friendship between the Chinese billionaire and the LA politician when Las Vegas Sands alerted the agency that Huizar had been a frequent guest of Huang at the Palazzo Hotel in 2014 and 2015, and that Huizar had received about $79,000 in gambling chips from Huang.
During a July 2015 trip to Las Vegas as a guest of Huang, the Palazzo researched Huizar and learned that he was an LA councilman, which makes him a "politically exposed person" required to fill out forms to show he's gambling with his own money and not the government's. When a Palazzo employee asked Huizar to fill out the required paperwork, he declined and was escorted out of the hotel's gambling area. He left $17,800 in chips he had gotten from Huang at the high-rollers parlor where they had been gambling.
Testimony by former aides of Huang and Huizar during the trial showed that after that incident, Huizar and Huang became more circumspect but it didn't end their relationship that was cemented by their love of gambling and women.
Attorneys for the developer argued at the two-week trial that everything Huizar received from Huang was above board and not intended to solicit any official act in support of the LA Grand Hotel project. Huang, they said, was a high-roller who gambled millions of dollars on his Las Vegas trips and received free luxury accommodations, expensive meals and wine from the casinos as a valued guest. The billionaire simply shared these with his entourage, including with Huizar, they unsuccessfully argued to the jury.
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