Former LA deputy mayor Raymond Chan found guilty in massive corruption case

LOS ANGELES, CA- MARCH 26: Former Deputy Mayor Raymond Chan walks to the United States Courthouse in downtown Los Angeles for his trial on corruption charges on Tuesday, March 26, 2024. (Myung J. Chun / Los Angeles Times)
(Myung J. Chun/Los Angeles Times)

Former LA deputy mayor Raymond Chan found guilty in massive corruption case

Homepage News, LA Politics, California Politics

David Zahniser

March 27, 2024

Former Los Angeles Deputy Mayor Raymond Chan was found guilty Wednesday of racketeering, bribery, fraud and making false statements to investigators in a sprawling corruption case targeting pay-to-play schemes at City Hall.

The federal jury reached its verdict less than 24 hours after attorneys completed their closing arguments.

The schedule has been set for June 10. Chan’s attorney, John Hanusz, told the judge that Chan will appeal.

“This case was, and always has been, about Jose Huizar,” Hanusz said.

Prosecutors did not immediately comment after the verdict was read.

Chan’s first trial on charges of racketeering, bribery, honest services fraud and lying to federal investigators was derailed after his attorney, Harland Braun, was hospitalized and unable to return to work for months. A judge declared a mistrial in April.

In the second trial, assistant US Atty. Brian R. Faerstein told jurors that Chan and former City Councilman Jose Huizar used the downtown real estate boom of the past decade to enrich themselves and their allies.

Faerstein described Chan as a crucial intermediary between Chinese developers seeking to build high-rises downtown and Huizar, who headed the powerful commission that served as a clearinghouse for such projects.

[Chan] received bribes for himself, and he received bribes for other government officials, Faerstein said in his opening argument on March 12.

Chan is the latest defendant to appear in court in the City Hall corruption investigation, dubbed Casino Loyale by the federal government. Huizar, who pleaded guilty to racketeering and tax evasion, was sentenced to 13 years in prison in January.

George Esparza, Huizar’s former assistant, pleaded guilty to racketeering but has not yet been convicted. He will testify against Chan. Real estate consultant George Chiang, who worked with Chan and also pleaded guilty to racketeering, is also expected to testify.

Hanusz agreed that Huizar and the others were deeply corrupt and committed crimes on a level that was cinematic in nature. But while Huizar and Esparza accepted flights to Las Vegas, casino chips and luxury hotel stays, Chan received none of that, he said.

Chan wasn’t motivated by greed while working with developers, but by a desire to make L.A. more business-friendly, Hanusz said.

There was no quid pro quo in this case with Ray Chan, he said in his opening argument. That was absolutely the case with Jose Huizar.

Hanusz told the jury that some government witnesses are liars who have committed crimes and now hope their testimony will result in a lighter prison sentence.

The case against Chan covers the five-year period from 2013 to 2018, when Huizar headed the council’s Planning and Land Use Management Committee. In that position, Huizar had the power to decide when real estate projects would get a public hearing and when they would be sent to the full council for a vote.

Chan was the top executive of the Department of Construction and Safety until 2016, when he became deputy mayor in charge of economic development under Mayor Eric Garcetti. He held that job for a little more than a year before leaving city government to become a private sector consultant representing real estate developers.

Prosecutors have accused Chan of secretly setting up a consulting firm while working for the city and overseeing government actions for which he was paid by a developer after leaving his job with the city.

The federal government also alleges that Chan helped Huizar obtain bribes from a Chinese developer who later wanted to build a 77-story skyscraper in the Huizar district. Huizar later admitted that the developer helped him secure a $600,000 loan that he used to secretly settle a sexual harassment lawsuit filed by a former employee just before a re-election campaign.

Prosecutors said Chan helped Huizar obtain the money after Huizar stopped a proposed merger of the Department of City Planning and the Department of Construction and Safety. That merger threatened Chan’s job as general manager at Building and Safety, prosecutors said.

Shen Zhen New World I, the company that proposed the 77-story tower, was convicted of providing Huizar with a wide range of bribes, including trips to Vegas. A judge found the company $4 million. The owner, Wei Huang, fled the country and is now on the run, the Justice Department said.

In his opening statement, Hanusz called the government’s case against Chan a fiction. Chan was a respected city leader with decades of experience who focused on breaking down bureaucratic barriers to new construction, he said.

He rolled out the red carpet for real estate development, the lawyer said. And this city benefited from it.


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