LOS ANGELES (CN) — The federal government's key witness lied to the FBI and the jury when he claimed a Los Angeles real-estate developer knew a $500,000 cash payment in 2017 was meant to bribe a City Council member, the developer's lawyer said at the end of a two-week trial.
Ariel Neuman, who represents Dae Yong Lee, aka David Lee, made his final pitch Friday to convince the jury in downtown LA that his client was an unwitting victim of Justin Kim, a political consultant and fundraiser who was one of the government's two cooperating witnesses and who was instrumental in the payment to former council member José Huizar, the purported ringleader of a widespread corruption scheme at City Hall.
"This case comes down to Justin Kim's opinion that Mr. Lee knew," Neuman said in his closing argument. "He held on to that opinion like a dog to a bone."
According Neuman, Kim testified that Lee knew he was bribing Huizar, in exchange for which the council member would help resolve a labor group's challenge to Lee's proposed $120 million development in Huizar's downtown district, because Kim is hoping for a reduced sentence for his part in the scheme and to hold on to his share of the bribe payment. Lee, however, believed he was paying Kim a consulting fee for his work resolving the issue.
"They're trying to make something out of nothing," Neuman said.
Lee, 57, a businessman who owns $180 million worth of real estate, is the first defendant to go on trial in the sprawling, pay-to-play corruption scheme the government claims Huizar and his cronies operated. He's accused of bribery, honest services fraud and obstructing the federal investigation, and he could face a maximum prison sentence of 20 years if convicted.
Huizar, 53, 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.
According to the charges, Lee turned to Kim for help in August 2016, when the Coalition for Responsible Equitable Economic Development, or Creed LA, an organization that seeks that have union labor work on big construction projects, appealed the city’s approval of a 20-story, mixed-use development that Lee wanted to build at the site of a one-story commercial structure. Kim in turn contacted George Esparza, Huizar's longtime assistant and confidant, who Kim knew because of his work as a fundraiser for Huizar in the Korean-American business community.
Huizar agreed to help but wanted $1.2 million for his assistance in convincing Creed to drop its appeal, according to Kim and Esparza, who also pleaded guilty and is cooperating with the prosecution. Lee countered with a $500,000 cash offer, part of which was paid through Kim to Esparza, who packed it in boxes for liquor bottles, took numerous photographs of it and held on to it at Huizar's instructions. Creed dropped its appeal soon after the first cash payment.
The government's case revolves around a lot of circumstantial evidence because none of the purported conspirators in their emails and text messages openly spoke about bribery. In addition, Lee never dealt directly with Huizar but worked though Kim, and Huizar through Esparza.
"That was by design," Assistant U.S. Attorney Veronica Dragalin told the jury in her closing argument. "No one used the word 'bribe' but everybody understood what was asked."
Both Lee and Huizar ran legitimate operations through their regular employees who were kept in the dark about their bosses' separate illegal operations run by their "lackeys," Kim and Esparza, who handled the negotiations and the payments without leaving a paper trail, Dragalin said.
But while Kim and Esparza were doing the legwork, call records show that they kept their bosses apprised of what was going on during crucial moments such as the cash drop-offs in February and March 2017, when Kim picked up the money from Lee's office and handed it to Esparza who was waiting in his car outside, the prosecutor said.
"David Lee was kept in the loop every step of the way," Dragalin said. "He knew exactly where the money was going."
In his rebuttal, Assistant U.S. Attorney Mack Jenkins pooh-poohed the defense argument that Kim was motivated to lie on the stand in the hope of getting a more lenient sentence. Kim, according to Jenkins, is also a key witness against Huizar, the alleged mastermind of the bribery scheme, and he would have nothing to gain from framing his former boss as well.
The jury is expected to start deliberating Monday after U.S. District Judge John Walter has given them his instructions.
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