Consultant Agrees to Plea Deal in LA City Hall Corruption Probe

Los Angeles City Hall. (Chris Marshall/CNS)

LOS ANGELES (CN) — An ongoing federal corruption probe at Los Angeles City Hall has resulted in several arrests in the last few months and on Wednesday a real estate consultant pleaded guilty to racketeering charges in a scheme to bribe an unnamed councilmember.

The federal probe first came to the public’s attention in November 2018 when federal agents raided the home and office of Councilman Jose Huizar. He has not been charged or arrested.

But a wide-ranging “pay-to-play” scheme at city hall resulted in the arrest of ex-councilman Mitch Englander this March for his role in accepting bribes from a developer and lying to federal agents during their investigation.

That was followed by the arrest of Justin Jangwoo Kim, a 53-year-old real estate appraiser and political fundraiser, who pleaded guilty to coordinating a bribe for a developer’s project in an unnamed councilmember’s district.

On Wednesday, George Chiang, a real estate broker and development consultant, agreed to plead guilty to one count of violating the Racketeer Influenced and Corrupt Organization Act in a criminal enterprise perpetrated by an unnamed councilman described as “Councilmember A” throughout the plea agreement.

The charging document also refers to “City Staffer A-1” and “Individual 1” who were also part of the scheme to receive bribes to push forward development projects in the councilmember’s district.

Prosecutors say Chiang’s involvement in the bribery scheme started in January 2014 and continued at least through December 2018. His role in the scheme included accepting bribes from developers to be paid to the councilmember.

Chiang was also involved in the scheme where the unnamed councilmember and other city staff requested prostitution or escort services, casino chips, money and other goods from developers, according to prosecutors.

“In exchange for such financial benefits from developers and their proxies, Councilmember A, City Staffer A-1, Individual 1 and other city officials agreed to perform and performed the following types of official acts” including filing motions on various city committees like the Planning and Land Use Committee and delaying or expediting requests to affect project costs, according to the plea agreement.

The scheme also involved exerting pressure on other city officials to influence the success of pending development projects, negotiating and exerting pressure on labor unions to resolve issues on projects and pressuring developers who had projects before the city to affect their business practices.

Prosecutors say the councilmember also took “official action to enhance the professional reputation and marketability of businesspersons in the city.”

The federal plea agreement does not reference the councilmember by name, but said the scheme “engaged in money laundering and other activities to conceal monetary transactions and bribe payments.”

Some of those concealment tactics included storing large amounts of money at a person’s home, giving cash to family members and directing family members, associates and others to avoid creating a paper trail between “the developers, their proxies and public officials.”

Bank deposits were kept under $10,000 to avoid federal reporting requirements and payments were not disclosed on tax returns, according to federal prosecutors in Chiang’s plea agreement.

In Kim’s plea agreement, prosecutors reference an unnamed councilmember who wanted his relative to succeed him after he termed out of office. Huizar is set to term out of office and before news of the FBI probe broke, Richelle Huizar, Joe Huizar’s wife, set out to run for the council seat that represents parts of LA’s downtown.

Chiang’s plea agreement says he gave $66,000 to an associate of the unnamed councilmember and he also agreed to be a major political donor to a relative of the unnamed councilman.

Prosecutors say the bribes went to the success of development projects in the city and the unnamed councilmember sat on the city’s planning and land use management committee as well as the city’s economic development committee.

In Kim’s plea agreement, prosecutors say Kim made a $200,000 bribe to the unnamed councilmember for a development project that was delivered to the councilman in an empty liquor box.

Between August 2016 and July 2017, Kim facilitated bribes from the developer to “Councilmember A.” By February and March 2017, Kim handed a city employee, referred to as “City Staffer A-1” and who worked for “Councilmember A”, in a paper bag that contained $400,000.

The money was delivered to the councilmember’s home by the city staffer, but according to federal prosecutors “Councilmember A” asked the staffer to hold onto the money.

Englander’s plea agreement detailed two trips in June 2017 to Las Vegas and Palm Springs where he accepted cash, female escort services and expensive meals from a businessman.

Englander was put up at a pricey hotel and given an envelope with $10,000 in cash, $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.

Englander’s former chief of staff and current city Councilman John Lee acknowledged he traveled with Englander during the trips to Las Vegas and Palm Springs, but says he tried to make sure all costs were recouped related to the trip and he was “unaware of any illegal activities” that Englander pleaded guilty to.

Chiang has not set a date to enter his plea, but could face a 20-year prison sentence.

Both Kim and Englander have not formally pleaded guilty according to the U.S. Attorney’s Office.

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