LOS ANGELES – A jury today found a real estate investor and one of his companies guilty of federal criminal charges for giving $ 500,000 in cash to then-Los Angeles City Councilor José Huizar and his special assistant in exchange for their help in resolving the attractiveness of organizing their development project. in downtown Los Angeles.
Dae Yong Lee, aka “David Lee”, 57, of Bel Air, and 940 Hill LLC, a company controlled by Lee, were all found guilty of three crimes: one count of fraud in honest services, one count of bribery and one count of falsification of records. in federal investigations.
According to the evidence presented at his nine-day trial, Lee, a commercial real estate investor, was the majority owner of 940 Hill LLC and planned to build a mixed-use complex located at 940 South Hill Street in downtown Los Angeles. The development was to include 14,000 square feet of office space and more than 200 housing units.
In August 2016, after a workers ’organization filed a complaint that prevented the 940 Hill project from progressing through the city approval process, Lee called on Justin Jangwoo Kim, Huizar’s fundraiser, to seek Huizar’s help in resolving the complaint. At the time, Huizar was chairman of the city’s Land Use Planning and Management Committee (PLUM), the body that oversaw many of the city’s most significant commercial and residential projects.
In September 2016, George Esparza, then Huizar’s special assistant, informed Kim that Huizar would not help the 940 Hill project for free and that he would need financial gain. In 2017, after several months of bribery negotiations, Lee provided Kim with a total of $ 500,000 in cash for delivery to Huizaru and Esparza, including a box of drinks.
Two years after paying the bribe, Lee and 940 Hill LLC thwarted a federal criminal investigation by altering accounting and tax records to falsely categorize the $ 500,000 bribe as a legitimate business expense to resolve a labor organization complaint.
U.S. District Judge John F. Walter has scheduled a sentencing hearing for Sept. 19, when Lee will face a statutory maximum sentence of 20 years in federal jail on charges of fraud in fair service, 20 years for obstruction, and 10 years for bribery. . Defendant 940 Hill LLC will face a statutory maximum fine of $ 1.5 million or double the gross profit or gross loss from the violation.
In June 2020, Kim pleaded guilty to the federal felony of accepting bribes. In July 2020, Esparza pleaded guilty to one count of racketeering. Both men are cooperating in the investigation, and the verdict is scheduled for September.
The next scheduled trial in this case is against Shen Zhen New World I LLC, an entity owned by real estate investor Wei Huang – another defendant in this case. Both defendants have been charged with bribing Huizar in connection with another development project in downtown Los Angeles, and their trial is scheduled for Oct. 18. Huang is still on the run.
Huizar and former Los Angeles Deputy Mayor Raymond Chan are due to go on trial on February 21, 2023, on charges of teaming up to violate the Racketeering and Corrupt Organizations Act (RICO). Huizar has reportedly agreed to accept at least $ 1.5 million in illegal financial benefits and is facing dozens of additional federal criminal charges.
Assistant U.S. Attorney Mack E. Jenkins, head of the Department of Public Corruption and Civil Rights, and Assistant U.S. Attorneys Veronica Dragalin and Cassie Palmer, also of the Department of Public Corruption and Civil Rights, are prosecuting the case.
Any member of the public who has information regarding this or any other issue of corruption in the city of Los Angeles is encouraged to send information to the FBI’s e-mail line for advice at pctips-losangeles@fbi.gov or to contact the FBI field for the Los Angeles Office at (310) 477-6565.
