LOS ANGELES (CN) — A former deputy LA mayor for economic development became the final defendant to go on trial in the widespread corruption and racketeering scheme led by former City Councilman José Huizar.
Raymond Chan, 66, is accused of aiding and abetting Huizar's pay-to-play scheme whereby real-estate developers gave the councilman bribes and other favors for their projects in downtown LA to make it through the city's approval process. Chan, who was the head of the city's Department of Building and Safety before becoming deputy mayor in 2016, stands accused of putting two deep-pocketed Chinese developers in touch with Huizar to facilitate the bribery scheme.
Huizar, who had been scheduled to go on trial with Chan, agreed to plead guilty last month and faces up to 13 years in prison under the terms of his plea deal, though the actual sentence will be decided by the judge.
One of the Chinese developers, Shen Zhen New World, was found guilty at trial in 2022 of paying more than $1 million in bribes to Huizar. Shenzhen Hazens' domestic subsidiary Jia Yuan USA, paid a $1 million fine as part of nonprosecution agreement with the Justice Department in 2019. A local LA developer was found guilty last year of paying a $500,000 bribe in exchange for Huizar's help with a downtown real estate project.
Chan acted as a middleman between the Chinese developers, who were seeking to get their projects approved during a building boom in downtown LA, and Huizar, Assistant U.S. Attorney Susan Har said in the prosecution's opening statement Tuesday afternoon.
"Chan formed connections and built relationships with wealthy developers and fed them straight to José Huizar," Har told the jury.
Not only was Chan part of Huizar's racketeering conspiracy, according to the prosecutor, he also set up his own bribery scheme with real estate broker George Chiang, who became his secret business partner. Chiang has pleaded guilty and is a government witness. He and Chan allegedly cultivated a relationship with Hazens which was planning a $700-million hotel project in downtown LA. While he was still a public official, Chan negotiated a cut of the consulting fees Chiang was getting from Hazens in exchange for Chan's official help with the project.
Chan expected half of the hundreds of thousands of dollars that Chiang's consulting business received from Hazens and even set up a business entity that wasn't under his own name to receive the payments and avoid detection, according to Har.
Chan's attorney, Harland Braun, told the jury in his opening statement that his client had no power to control what projects received approval in downtown LA and, as head of Building and Safety, did everything the way he was supposed to, including enforcing the building code against one of the developers he's now accused of bringing into Huizar's bribery scheme.
"They don't know what they're talking about," Braun said, referring to the prosecution. "They don't understand building and safety."
According to Braun, Chan disapproved of the lavish gambling trips to Las Vegas that Huizar went on with Wei Huang, the billionaire chairman of Shen Zhen New World, which put the FBI on the trail of the corruption scheme, and never joined them on those trips. Braun also denied that Chan had anything to do with a $600,000 payment from Huang to Huizar, as the government alleges, to settle a sexual harassment lawsuit by one of Huizar's staffers.
Unlike most other defendants in criminal cases, Chan will testify in his own defense, Braun told the jurors.
"You're going to hear witnesses that lie, you're going to hear witnesses that dissemble, and finally you're going to hear Ray Chan who'll tell you the truth," Braun said. "He's going to establish without any doubt that he's innocent."
Huizar, 54, agreed to plead guilty to RICO conspiracy and tax evasion in January. According to his plea agreement, prosecutors won't seek more than 13 years in prison for the once rising star of the LA political scene, though it will be up to the judge how much time he'll have to serve. The maximum penalty he could face is 25 years — 20 for racketeering conspiracy and five years for tax evasion.
He 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.
A key prosecution witness in the trials of the two real-estate developers was Huizard's former special assistant George Esparza, who cut a plea deal early with the government and who told the juries in great detail about Huizar's methods for "milking" developers who wanted to build in downtown LA. Epsarza is also expected to testify in Chan's trial.
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