LOS ANGELES—A real estate developer was sentenced on July 21 to six years in federal prison and fined $750,000 for paying a $500,000 bribe to then-Los Angeles City Councilman José Huizar in order to “grease the wheels” for the approval of a downtown condominium project.
Dae Yong “David” Lee, 58, of Bel Air, was the first defendant to go on trial in the City Hall corruption scandal surrounding Mr. Huizar and his associates.
Mr. Lee and his 940 Hill company—named for the address of the proposed downtown retail and residential project—were convicted in June 2022 of bribery, honest services fraud, and obstruction.
The company was sentenced Friday to five years probation and ordered to pay a $1.5 million fine.
Evidence at his trial in Los Angeles federal court showed Mr. Lee used Mr. Huizar associate Justin Kim to transfer bags of cash on behalf of his company to the councilman’s aide, George Esparza. Within days of payment, Mr. Huizar smoothed out a bureaucratic tangle that had halted the proposed mixed-use development from going forward, according to testimony.
At the time, Mr. Huizar was head of a powerful city planning committee that reviewed the city’s biggest development projects.
Assistant U.S. Attorney Cassie Palmer told the jury that Mr. Huizar’s vote was needed to “grease the wheels” for approval of Mr. Lee’s project.
Palmer said Mr. Huizar’s “vote mattered, and the defendant knew his vote mattered. They needed José Huizar on their side.”
Mr. Lee’s attorney, Ariel Neuman, argued that his client had been conned by Mr. Kim, who told the developer the cash was needed to pay administrative fees.
“He made the mistake of trusting the wrong person,” Ms. Neuman said of Mr. Lee. “He was taken advantage of by a liar and a thief. David Mr. Lee did not knowingly or intentionally bribe anyone. He thought he was paying a consulting fee.”
Mr. Kim admitted to facilitating the payment from Mr. Lee and pleaded guilty to a federal bribery offense. He and Mr. Esparza—who pleaded guilty to a racketeering charge—are both scheduled to be sentenced in October.
Mr. Lee and 940 Hill were also convicted of falsifying accounting and tax records to cover up the bribe—the basis for the obstruction charge.
Both Mr. Kim and Mr. Esparza took the stand for the prosecution at Mr. Lee’s trial.
U.S. District Judge John Walter broke up the complex six-defendant indictment involving Mr. Huizar and his associates into three separate criminal trials after finding that the size of the case against Mr. Huizar alone would likely overshadow evidence against the co-defendants.
Mr. Huizar and former Deputy Mayor Raymond Chan, who was general manager of the Department of Building and Safety before becoming the city’s deputy mayor of economic development, were charged in November 2020 with racketeering conspiracy, bribery, honest services fraud, and other counts.
The central figure in a six-year probe of suspected corruption in City Hall politics, Mr. Huizar, 54, of Boyle Heights, pleaded guilty in January to one count of conspiracy to violate the Racketeer Influenced and Corrupt Organizations (RICO) Act and one count of tax evasion. He faces multiple years behind bars at sentencing on Dec. 15.
Mr. Huizar admitted receiving $1.5 million in cash and benefits as part of a pay-to-play scheme in which developers were shaken down for cash and campaign donations in exchange for help getting downtown real estate projects through the city’s approval process.
Mr. Huizar’s lawyers denied the allegations against their client, claiming the former councilman was merely “an evangelist for robust development” in downtown and Boyle Heights, which he represented from 2005 to 2020.
In another part of the case, real estate development company Shen Zhen New World I was convicted last winter of paying Mr. Huizar more than $1 million in bribes in return for his help getting approvals for a proposed skyscraper downtown.
The jury found Shen Zhen New World I, led by fugitive Chinese billionaire Wei Huang, guilty of five counts of bribery and three counts of wire fraud. The company was fined $4 million and placed on five years probation.
The retrial of Mr. Chan, Mr. Huizar’s co-defendant, is delayed until March. A mistrial was declared in Mr. Chan’s first trial after his attorney, Harland Braun, was taken ill and could not continue appearing in court.
Mr. Chan is facing a dozen criminal counts, including racketeering conspiracy, bribery, honest services fraud, and lying to federal agents for his alleged role in the pay-to-play scheme linked to Mr. Huizar that prosecutors say soaked developers for millions of dollars in exchange for getting their building projects approved at the City Hall.
