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Tuesday, July 9, 2024 | Back issues
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Former LA deputy mayor loses bid to get racketeering case dismissed

The last remaining defendant in LA's massive City Hall corruption scandal again faces trial, following a mistrial in 2023.

LOS ANGELES (CN) — A former Los Angeles deputy mayor for economic development lost his bid to dodge a slew of criminal charges including racketeering conspiracy in a widespread public corruption scandal.

U.S. District Judge John Walter on Friday rejected Raymond Chan's argument that federal prosecutors had failed to adequately plead that he had been part of a criminal enterprise involving former City Councilman José Huizar, the convicted mastermind of the scheme to seek bribes from real-estate developers who wanted to build projects in downtown LA.

"Chan’s argument appears to be premised on the fact that the first superseding indictment fails to allege that Chan had a role in or had knowledge of each and every scheme alleged," Walter wrote. "However, as the government correctly points out, for a RICO conspiracy, it is not necessary that each conspirator knows all of the details of the plan or conspiracy."

Chan, 67, is the last remaining defendant in the sprawling corruption prosecution that has resulted in numerous guilty pleas of individuals in Huizar's circle and jury verdicts against both local and overseas developers. Chan went on trial last year, but the case ended in a mistrial after his lawyer fell seriously ill and couldn't return to the courtroom.

The former city official is accused of aiding and abetting Huizar's pay-to-play scheme whereby developers had to provide 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 Department of Building and Safety before becoming deputy mayor in 2016, is accused of putting two wealthy 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 year and faces as long as 13 years in prison at his sentencing later this month.

One of the Chinese developers Chan allegedly introduced to Huizar, Shen Zhen New World, was found guilty at trial in 2022 of paying more than $1 million in bribes to Huizar. The other Chinese developer, 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.

Walter also rejected Chan's argument that individual honest services wire fraud charges against him should be dismissed in light of last year's U.S. Supreme Court decision that overturned the bribery conviction of Joseph Percoco, a former top aide to ex-New York Governor Andrew Cuomo.

Based on that decision, Chan argued that the government had improperly charged him with honest services wire fraud for conduct he engaged in while he was a private citizen who no longer owed a fiduciary duty to the city of Los Angeles or its citizens.

But Walter found that although the wire transaction underlying those allegations postdated his Chan's departure from City Hall, they involved payments to him for work he did as part of Huizar's scheme while he was still deputy mayor.

"In other words, the first superseding indictment clearly alleges that the wires on Oct. 28, 2017 and Dec. 27, 2017 were merely deferred payments for Chan’s official acts while he was still a public official," Walter said. "And, because Chan was still a public official when those alleged acts were performed, Percoco is inapposite."

An attorney for Chan didn't immediately respond to a request for comment on the ruling.

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Categories / Courts, Criminal, Government, Regional

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