Former Los Angeles Deputy Mayor Raymond Chan was convicted March 27 of federal racketeering conspiracy and bribery charges for his involvement in a pay-to-play scheme to monetize the real estate approval process at City Hall.
A federal criminal jury in downtown Los Angeles reached a verdict just over an hour into deliberations, finding Mr. Chan guilty on all 12 charges, which included racketeering conspiracy, two counts of bribery, and lying to federal agents in connection with the bribery scheme.
“Chan used his leadership position in City Hall to favor corrupt individuals and companies willing to play dirty,” U.S. Attorney Martin Estrada said in a statement Wednesday. “The residents of Los Angeles deserve much better. With today’s verdict, we send a strong message that the public will not stand for corruption and that pay-to-play politics has no place in our community.”
Sentencing was set for June 10. Mr. Chan faces up to 20 years in federal prison for each count of racketeering conspiracy and honest services wire fraud.
According to prosecutors, the 67-year-old was a key figure in the conspiracy, dubbed “CD-14 Enterprise,” orchestrated by former City Councilman José Huizar to provide favorable treatment to wealthy developers by financing and facilitating bribes and other illicit benefits between 2013 and 2020.
Mr. Huizar, who represented District 14, which includes downtown Los Angeles and its surrounding communities, pleaded guilty last year to federal charges and is facing 13 years behind bars.
Mr. Chan previously served as the general manager of the Los Angeles Department of Building and Safety and later as the city’s deputy mayor of economic development from 2016 to 2017.
While serving in the building department and as deputy mayor, Mr. Chan secretly partnered with real estate development consultant George Chiang, securing a profitable consulting agreement with Chinese real estate developer Shenzhen Hazens, prosecutors said.
Under the agreement, Mr. Chan accepted hundreds of thousands of dollars in bribes to influence and pressure city officials in support of Hazens’ Luxe Hotel redevelopment project in downtown Los Angeles, prosecutors added.
Prosecutors said Mr. Chan orchestrated a $100,000 campaign contribution from Hazens, the company, to back Mr. Huizar’s wife’s CD-14 campaign, as her husband’s term was set to expire in 2020,in exchange for Mr. Huizar’s approval of the project. The primary objective of the scheme was for Mr. Huizar’s wife to assume his council seat, ensuring his continued control over downtown through her, the statement said.
In a separate case, Mr. Chan facilitated over $1 million in bribes to Mr. Huizar from billionaire developer Wei Huang of Shenzhen, China, including $600,000 to settle a harassment lawsuit and luxury gambling trips, according to prosecutors.
Mr. Huang’s company, Shen Zhen New World I LLC, sought the then-councilman’s assistance for the redevelopment of the L.A. Grand Hotel into the tallest tower west of the Mississippi, which required city approvals, prosecutors said.
“Mr. Chan made decisions to enrich himself and his corrupt colleagues instead of advancing projects to benefit the residents of Los Angeles, and then lied about it when confronted with the facts,” said Mehtab Syed, the acting assistant director in charge of the FBI’s Los Angeles Field Office.
The defense argued that the former deputy mayor was motivated solely by his “love for his adopted city” and had not engaged in any illegal activities.
John Hanusz, one of Mr. Chan’s attorneys, told jurors that the City of Los Angeles benefited from the defendant’s work, making downtown development “attractive” to foreign investors.
“It was his mission to bring economic development to Los Angeles,” the defense attorney said. “Unfortunately, Ray Chan thought everyone shared his vision.”
Mr. Huizar pled guilty to racketeering conspiracy and tax evasion charges and must surrender to authorities by April 30.
Mr. Chan was the final defendant charged in the corruption investigation.
Others charged include real estate developer Dae Yong “David” Lee, 59, of Bel Air, and his company, 940 Hill LLC; Mr. Huang and his company, Shen Zhen New World I LLC; Mr. Chiang; George Esparza, Mr. Huizar’s former special assistant; political fundraiser Justin Jangwoo Kim; lobbyist Morrie Goldman; and Mr. Huizar’s brother, Salvador Huizar.
