Former Los Angeles Deputy Mayor Sentenced to 12 Years in Prison for Racketeering Conspiracy that Corrupted City Real Estate Projects

LOS ANGELES - A former deputy mayor and long-time Los Angeles city official was sentenced today to 144 months in federal prison for soliciting and accepting more than $750,000 in bribe money for himself and facilitating over $1 million in bribes from property developers to then-Los Angeles City Councilmember José Huizar as part of a long-running pay-to-play racketeering conspiracy at the highest levels of government in Los Angeles.

Raymond She Wah Chan, 68, of Monterey Park, was sentenced by United States District Judge John F. Walter, who also ordered him to pay $752,457 in restitution to the City of Los Angeles.

At the conclusion of a 12-day trial, a jury on March 27 found Chan guilty of all 12 felony counts for which he was charged: one count of conspiracy to violate the Racketeer Influenced and Corrupt Organizations (RICO) Act, seven counts of honest services wire fraud, three counts of federal program bribery, and one count of making false statements to a federal government agency.

"Chan abused his public office and sought to deepen the corruption of city politics for the benefit of his own business interests," said United States Attorney Martin Estrada. "Today's sentence sends a message to the public and City Hall alike that our government should not be for sale and those that undermine our democracy through pay-to-play schemes will be prosecuted to the fullest extent of the law."

"Today's sentence serves as a reminder that there are consequences for robbing communities of the honest government services they deserve" said Akil Davis, Assistant Director in Charge of the FBI Los Angeles Field Office. "The harm of public corruption manifests itself not only in financial loss, but also the loss of faith in government and public officials. The FBI will remain laser focused on those who seek to use their personal wealth and influence to facilitate relationships between those willing to pay or accept bribes."

Chan served for years as the General Manager of the Los Angeles Department of Building and Safety (LADBS) and, later, as the Deputy Mayor of Economic Development from 2016 to 2017. Chan abused both of these high offices and the influence they carried to enrich himself, Huizar, and other public officials within the city.

Huizar, 56, of Boyle Heights, represented Council District 14 (CD-14) on the Los Angeles City Council from 2005 until his resignation in October 2020. CD-14 encompassed downtown Los Angeles and some of its surrounding areas. When downtown Los Angeles was experiencing a huge real estate development boom, Huizar chaired the Planning and Land Use Management (PLUM) Committee, which oversaw all major commercial and residential development projects in the city.

Along with Huizar, Chan helped conceive, lead, and operate the "CD-14 Enterprise," a criminal racketeering enterprise that exploited the city approval process for large real estate development projects to exact bribes from developers. Chan played a critical role in guiding and ensuring the CD-14 Enterprise's success, managing the conspiracy through both the powerful public offices he occupied and the private relationships he held with wealthy foreign developers seeking to build in the city. Capitalizing on this unique position, Chan steered nearly $2 million in financial benefits to himself, Huizar, and other public officials as part of the pay-to-play bribery scheme.

In furtherance of the conspiracy, while he was General Manager of LADBS and then Deputy Mayor, Chan established and directed a secret business partnership with real estate development consultant George Chiang, securing a lucrative real estate consulting agreement with Chinese real estate developer Shenzhen Hazens. As part of that agreement, Chan solicited and accepted hundreds of thousands of dollars in bribes to advise and pressure other city officials, including Huizar, in favor of Hazens' Luxe Hotel redevelopment project in downtown Los Angeles. When he left city employment, Chan used the consulting business that he had secretly built to direct bribes to other public officials for the benefit of his private consulting clients.

To help prolong the pay-to-play bribery scheme, Chan also facilitated a $100,000 campaign contribution commitment from Hazens for Huizar's wife's candidacy to succeed Huizar as CD-14 Councilmember in exchange for Huizar's votes to approve the Luxe Hotel project. Chan also helped facilitate numerous other bribes from Hazens to Huizar, including tens of thousands of dollars in sham real estate consulting fees, concert tickets, China travel expenses, and contributions to Huizar's 2015 campaign debt and alma mater high school.

Chan also facilitated payment of nearly $1 million in bribes to Huizar from billionaire developer Wei Huang, 58, of Shenzhen, China, including $600,000 to settle a sexual harassment lawsuit, nearly $200,000 in casino chips, and luxury-laden gambling trips to Las Vegas. Chan similarly facilitated bribes from Huang to George Esparza, Huizar's special assistant and key associate in the pay-to-play bribery scheme, through casino chips and lavish Las Vegas trips. When Huang provided these bribes, his company, Shen Zhen New World I LLC, was planning to redevelop the downtown L.A. Grand Hotel into the tallest tower west of the Mississippi, which would require city approvals and Huizar's official assistance.

Chan played a crucial role in facilitating Huang's payment of $600,000 for Huizar to settle a sexual harassment lawsuit filed by a former CD-14 staffer, which threatened Huizar's 2015 re-election campaign and the continued operation of the CD-14 Enterprise. Chan conceived of and helped carry out an elaborate plan involving a foreign shell company, intermediaries, and fraudulent corporate documents to arrange a sham private loan that shielded the fact of Huang's involvement in the payment. Chan later lied to FBI agents that he was not involved in the settlement, that Huang had no projects in Huizar's district needing Huizar's support, and that Huang had never asked Huizar for help with anything - all of which Chan knew to be false.

Huizar was sentenced on January 26 to 13 years in federal prison and also was ordered to pay $443,905 in restitution to the City of Los Angeles and $38,792 in restitution to the IRS. He pleaded guilty in January 2023 to one count of racketeering conspiracy and one count of tax evasion. Huizar has been ordered to begin serving his prison sentence no later than October 7.

Hazens' U.S. subsidiary, Jia Yuan USA Co. Inc., which was seeking to redevelop the Luxe Hotel, has paid $1.05 million to resolve the government's investigation into its conduct related to this case, which included bribery and illegal campaign contributions.

Huang, who is charged with several felonies for his bribes to Huizar with Chan's assistance, fled the United States shortly after the execution of numerous federal search warrants in this case and is considered a fugitive from justice. Huang's downtown Los Angeles-based company Shen Zhen New World I LLC was convicted in 2022 of eight felonies for - through Huang's actions as its owner - paying more than $1 million in bribes to Huizar for his critical support for the L.A. Grand Hotel redevelopment project. The company was sentenced to five years of probation, fined $4 million, and ordered to pay the costs of prosecution.

Relatedly, real estate developer Dae Yong Lee, a.k.a. "David Lee," 60, of Bel Air, and one of his companies, 940 Hill LLC, were convicted in 2022 of providing $500,000 in cash to Huizar and Esparza in exchange for their help in resolving a labor organization's appeal of a downtown Los Angeles development project. Lee is serving a six-year federal prison sentence and was fined $750,000. 940 Hill LLC was sentenced to five years' probation, fined over $1 million, and ordered to pay the costs of prosecution.

Prosecutors also have secured guilty pleas from Chiang; Esparza; lobbyist Morrie Goldman; and political fundraiser Justin Jangwoo Kim. Each of these defendants cooperated with the government and testified during at least one trial in this case and will be sentenced at upcoming hearings in November.

The FBI and IRS Criminal Investigation investigated this matter.

Assistant United States Attorney Mack E. Jenkins, Chief of the Criminal Division, and Assistant United States Attorneys Cassie D. Palmer, Susan S. Har, and Brian R. Faerstein of the Public Corruption and Civil Rights Section prosecuted this case.

Any member of the public who has information related to this or any other public corruption matter in the City of Los Angeles is encouraged to send information to the FBI's email tip line at https://tips.fbi.gov or to contact the FBI's Los Angeles Field Office at (310) 477-6565.

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