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The Real Deal Los Angeles

West Hollywood developer arrested on federal bribery charges

Charles Co. founder Arman Gabay allegedly bribed LA County official for a lease at his company’s Hawthorne Mall
By Dennis Lynch | May 17, 2018 08:42AM

Arman Gabay and the Hawthorne Plaza mall (Credit: Pixabay)

Federal prosecutors have charged a West Hollywood developer with bribing a Los Angeles County official in exchange for business from county departments.

FBI agents arrested Charles Company co-founder and partner Arman Gabay on federal bribery counts at his Beverly Hills home, the U.S. Attorney’s Office said.

Prosecutors allege Gabay sent the employee monthly $1,000 payments over six years — amounting to thousands of dollars — and last year offered to buy the employee a $1.1 million home in Santa Rosa. In return, Gabay would receive a $45 million county lease at the Hawthorne Plaza mall, officials said.

The 57-year-old developer, who’s legal name is Arman Gabaee, faces up to 10 years in prison for the alleged scheme.

The payments add up to around $72,000 over six years. A statement from the U.S. Attorney’s Office suggest federal agents have been aware of the scheme since at least 2016, referencing “covertly recorded meetings” late that year and in early 2017 when Gabay paid “thousands of dollars” to the employee.

Prosecutors said Gabay made two offers on an eight-acre property in Santa Rosa meant as a bribe to the county employee in 2017. Specifically, the payments would help secure a 10-year, $45 million lease with county departments at the mall, which Charles Co. planned to redevelop into a $500 million mixed-use project. Plans were canceled in February.

Intercepted communications show Gabay wanted to hide his interest in the property by buying it through an entity, officials said. He ultimately withdrew the offers when FBI agents approached him about the scheme, according to prosecutors.

Gabay runs Charles Co. with his brother Mark, who handles acquisitions. Arman focuses on new development, according to the firm’s website. The firm has a diverse portfolio of two dozen properties, mostly around Los Angeles. The firm finally broke ground on a mixed-use project on Santa Monica Boulevard in West Hollywood in March, four years after it first received approvals from the city.