The secrets still to come in the FBI’s Jose Huizar investigation

More than a dozen real estate companies are mentioned in federal indictments

Photo illustration by Alexis Manrodt for The Real Deal (Getty, iStock)
                                                                        Photo illustration by Alexis Manrodt for The Real Deal (Getty, iStock)

It was the fall of 2017 and Los Angeles City Council Member Jose Huizar needed a word with a longtime staffer about two real estate projects pending before the council.

In advance of hearings, Huizar wanted to make sure the projects’ developers had funneled thousands of dollars to a fund set up to elect Huizar’s wife, Richelle Huizar, as his successor.

“All commitments have been made,” his staffer, George Esparza, assured him.

The exchange was one of many startling details in the 138-page superseding indictment of Huizar that federal prosecutors handed down Nov. 30.

The filing brought new criminal counts against Huizar and also Shenzhen New World Group, its chairman Wei Huang, Los Angeles builder Dae Yong Lee and the Lee-incorporated 940 Hill LLC.

But questions remain about the Huizar probe, which has lasted more than two years and produced an array of indictments, plea deals, and tales of pay-to-play for Katy Perry tickets.

Notably, it’s unclear what other real estate executives and companies will face charges. The latest indictment alludes to 14 companies.

As Donald Rumsfeld might put it, here are the known knowns, known unknowns, and an unknown unknown of the investigation.

Known Knowns

  • Huizar has gone from chair of the council’s powerful planning committee, to just downtown council member, to termed-out member facing 41 criminal counts of racketeering, fraud and money laundering. Huizar has pleaded not guilty to all charges and faces a June trial.
  • Dae Yong Lee, 940 Hill LLC and Ray Chan, former deputy mayor of the economic development office, have also pleaded not guilty to federal racketeering charges. Shenzhen New World Group and its chairman Wei Huang, who resides in China, await arraignment.
  • A handful of people have been identified as supplying information to the FBI through plea deals announced by federal prosecutors. These include Esparza, who pleaded guilty to a racketeering charge in May and graces no fewer than 52 of the latest indictment’s 138 pages. Others who made deals with prosecutors include real estate consultant George Chiang, appraiser Justin Jangwoo Kim, lobbyist Morris Goldman, and former City Council Member Mitchell Englander.
  • Developer Shenzhen Hazens has paid a $1 million fine and admitted to wrongdoing.

Known Unknowns

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  • The indictment lists three companies that gave $25,000, $50,000 and $50,000, respectively, to the political action committee to elect Richelle Huizar.
  • Two of those companies appeared before either the council’s Economic Development Committee or Planning, Land Use and Management Committee on Oct. 24, 2017.
  • A “Company I” had a project outside Huizar’s district and needed approval for signage, which might connect to an item on the planning agenda.
  • “Company H,” meanwhile, sought a “transient occupancy tax rebate,” perhaps taken up during the economic development meeting.
  • An LLC seeking a hotel tax break at that meeting was incorporated by the Choice Hotel franchise. But a Choice company spokesperson said, “Choice is not a party to this project,” adding, “That said, we are confident that the venture’s development activities have been conducted in compliance with all applicable laws.”
  • Also unknown is whether the FBI views these companies as co-conspirators or if they are already cooperating with prosecutors.
  • The Huizar scandal concerns allegations that companies paid off the council member. But, as Neil McCauley once said, there’s a flip side to that coin: Whether any developers failed to get projects approved because they didn’t bribe Huizar.

The indictment refers to a China-based developer, “Company G,” that Esparza slams for not giving money to the Richelle Huizar PAC.

“[Company G] has not come through with any commitments to us,” Esparza said during a May 2017 phone call. “So … let’s just continue to ignore them, you know. We are not going to help them.”

  • Shortly after the FBI raided Huizar’s office in November 2018, the Los Angeles Times reported that real estate and billboard companies were solicited by Richelle Huizar to donate money to Jose Huizar’s former school, Bishop Mora Salesian High School in the Boyle Heights neighborhood.

The Times reported that Shanghai-based Greenland gave $25,000 to the school, and New York City-headquartered Related Companies provided $10,000.

The indictment mentions a China-based Company L that gave $25,000 to the high school — perhaps Greenland, which has acknowledged donating. But it also alludes to a different Chinese business, “Company K,” that gave $25,000.

Unknown is what the second Chinese company might be and why it is mentioned in the indictment. Also, unknown is whether Greenland figures into the probe beyond the single donation.

  • A “Company M” in the indictment appears to be Carmel Partners, a San Francisco-based developer. But after an initial statement in July, Carmel has not discussed its involvement in the Huizar scheme. Will the firm avoid criminal prosecution? Is it working on a deal similar to Shenzhen Hazen’s?

Unknown Unknown

U.S. attorneys serve at the pleasure of the president, and L.A.’s is Nicola Hanna, a Donald Trump appointee. No one knows if Hanna is pushing to wrap up the case before President-Elect Joe Biden replaces him.

But Hanna’s latest public statements suggest that the Huizar probe is not just about the council member and a few rogue companies.

“This detailed indictment,” Hanna said in a statement, “should prompt a serious discussion as to whether significant reforms are warranted in Los Angeles city government.”

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