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LA City Councilman Snared in Federal Corruption Probe

The ongoing corruption probe at Los Angeles City Hall has resulted in the arrest of Councilman Jose Huizar on Tuesday, nearly two years after his home and City Council office were raided by FBI agents.

LOS ANGELES (CN) — The ongoing corruption probe at Los Angeles City Hall has resulted in the arrest of Councilman Jose Huizar on Tuesday, nearly two years after his home and City Council office were raided by FBI agents.

Huizar, who represents portions of downtown Los Angeles, was arrested without incident Tuesday morning, FBI spokeswoman Laura Eimiller said. He faces a federal racketeering charge, according to a criminal complaint dated June 22 and unsealed earlier on Tuesday.

U.S. Attorney for the Central District Nick Hanna said the ongoing corruption probe, codenamed “Casino Loyale,” began in 2015 when federal investigators saw Huizar exchanging large amounts of casino chips in Las Vegas. Huizar is the first sitting elected LA official to face federal racketeering charges, according to Hanna.

In the last several weeks, the federal corruption probe at City Hall has resulted in multiple arrests in what federal prosecutors have described as a pay-to-play scheme to an unnamed sitting councilman.

All previous indictments corroborate evidence that the unnamed councilman in the money-making scheme is Huizar, who was asked in recent weeks to stop voting on City Council matters when it became apparent he was a subject of the federal probe.

Huizar sat on the city’s Planning and Land Use Management (PLUM) Committee and — according to the criminal complaint — abused that position to solicit bribes from developers. Since 2005, Huizar has represented a council district that includes downtown LA and surrounding neighborhoods, including Boyle Heights where he lives with his wife and two children.

In the charging document against Huizar, prosecutors say “Individual 1” introduced Huizar in 2013 to a “Chairman E,” a Chinese billionaire developer who runs a multinational development firm and owns a hotel in downtown LA.

According to the complaint, the Chinese developer gave Huizar $600,000 in 2014 to help him settle a sexual harassment lawsuit filed by a former staffer due to concerns that details of the lawsuit could threaten Huizar’s 2015 re-election campaign.

Huizar won re-election and prosecutors say he continued to receive lavish bribes from developers who sought favorable votes from him, including luxurious trips on private jets, stays at casino villas and a trip to Australia.

The Chinese developer gave Huizar over $800,000 in benefits, according to prosecutors, who say Huizar’s favorable votes on the committees he sat on helped developers build a 35-story project in downtown that saved an unnamed company $14 million.

In March, former councilman Mitch Englander pleaded guilty to obstructing a federal probe of his actions. Prosecutors say a real estate developer showered Englander with cash, trips and expensive meals.

In a separate plea agreement, Justin Jangwoo Kim — a 53-year-old real estate appraiser and political fundraiser — pleaded guilty to coordinating a bribe for an unnamed councilman to advance a developer’s project.

Last month, real estate broker George Chiang pleaded guilty for his involvement in the pay-to-play scheme which prosecutors detailed in an indictment, which included a criminal enterprise perpetrated by an unnamed councilman.

The most recent indictment in the probe involved former Huizar aide George Esparza, who pleaded guilty to racketeering charges in a scheme to solicit and accept bribes on behalf of an unnamed councilman.

The complaint against Esparza described how the unnamed councilman’s relative received biweekly payments of about $2,500 from a law firm as part of her employment where she did marketing and business development.

In March 2017, a liquor box filled with $200,000 was delivered to Huizar’s home by Esparza, who took a photo on his phone of the money according to the charging document. The money was from an unnamed developer who gave the money to Kim to give to Esparza for a favorable vote from Huizar.

A photo from the affidavit showing a liquor box which prosecutors say was filled with a $200,000 bribe.

According to prosecutors, Huizar met with Esparza at his home and said he could keep $100,000, because Huizar expected a $400,000 bribe from the developer. Huizar told Esparza to hold onto the money until he asked for it.

But in December 2017, Huizar had trouble getting the money back and the two met at a private bathroom in City Hall, where Esparza told Huizar about being questioned by the FBI in the ongoing corruption probe. According to the affidavit, Huizar was recorded saying, “And secondly, um, look, uh, I have a lot of expenses now that with [Relative A-1] running, [Relative A-1]’s not going to be working anymore. I’m gonna need money. Um, that is mine, right? That is mine.”

Huizar attempted to get his share of the bribe in April and September 2018 and in a series of text messages to Esparza, who had left his post at City Hall, Huizar wanted to meet to make the exchange according to prosecutors.

In one text message to Esparza, Huizar wrote, “Each time comes up and u don’t want to meet at all? U want it all and that’s the real reason why you don’t want to meet and are using all kind of excuses. One more time, when are we going to meet?”

While Huizar’s relative who was going to run for political office is not named in the affidavit, the details in the charging documents point to his wife Richelle.

From July 2012 through January 2016, the relative also received payments from a high school, totaling $150,000 as a fundraiser according to prosecutors. And sometime in September 2018, the relative announced she would run for her relative’s seat on the City Council.

Huizar will term out of office next year and his wife Richelle was set to run for his City Council seat before his offices and home were raided by federal agents. Kevin de León, former president pro Tempore of the California Senate, has since been elected to the position.

Prosecutors say Huizar was interviewed by the U.S. Attorney’s Office and the FBI in April 2019 and denied receiving hundreds of thousands of dollars in bribes.

Huizar is also charged with instructing a special assistant to avoid bank reporting requirements, using family members to launder bribes, making false statements on bank loan application and failing to report those bribes on tax returns and ethics disclosure forms, along with lying to FB agents and attempting to influence other witnesses.

Huizar appeared before a U.S. magistrate judge Tuesday afternoon, who ordered him released on a $100,00 bond. He did not enter a plea, according to a Justice Department spokesperson

If convicted, the councilman faces 20 years in prison on the Racketeer Influenced and Corrupt Organizations Act charge.

In a statement, Council President Nury Martinez said the “horrendous and disgusting allegations leveled against him and others have painted a dark cloud over our city government for a long time now.” 

She said her office has begun the process to remove Huizar from office.

Screenshot of Los Angeles City Councilman Jose Huizar during a meeting at City Hall in December 2019.

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