Tuesday, April 16, 2013
Court Throws Out Some Convictions in South Gate Corruption Case
By KENNETH OFGANG, Staff Writer
The Ninth U.S. Circuit Court of Appeals yesterday threw out former South Gate Treasurer Albert Robles’ convictions on 25 counts of honest services fraud and money laundering, but upheld convictions on five counts of bribery.
Judges also threw out honest services fraud convictions against businessman and Robles friend George Garrido, and sent the case back to the U.S. District Court. The appellate ruling comes more than seven years after the pair was sentenced and more than two years after their appeals were argued.
Robles, 48, is serving a 10-year sentence imposed by U.S. District Judge Stephen V. Wilson. Bureau of Prisons records show that he is at Taft Correctional Institution in Kern County and is due to be released in 2015.
Garrido was sentenced to 51 months in prison.
Judge Harry T. Pregerson, writing for the panel, said the honest services convictions of both men had to be reversed under Skilling v. United States, 130 S. Ct. 2896 (2010). The high court held there that 18 U.S.C. Sec. 1346, which makes it a crime to use the mails or wires to deprive the public of its right to honest services, only applies to bribery and kickback schemes and not to a mere failure to disclose a conflict of interest.
The ruling allows Robles to be retried on all but three counts, as to which the panel said there was insufficient evidence of any federal crime. But under 18 U.S.C. Sec. 666, he could still be sentenced to 10 years on the bribery counts alone.
Robles served as an elected official in the predominantly Latino city of 100,000 in southeast Los Angeles County for nearly a dozen years. He became the city’s youngest mayor at 26 and essentially gained control of its government when his allies won a council majority in 2001.
That domination was short-lived, as he and his supporters were thrown out in a recall election in 2003, with the city near bankruptcy, having lost millions of dollars due to corruption, prosecutors said.
The heart of the prosecution’s case was the city’s $48 million garbage-hauling contract with Klistoff & Sons. Michael Klistoff Jr., vice president of the trash-hauling company and the son of its founder, said he hired Garrido, operator of a wholesale nursery, as a $350,000-a-year consultant and promised a Garrido-owned recycling company a piece of the 10-year contract.
Payoffs to Robles were alleged to be about $1.8 million
Klistoff pled guilty to bribery before the trial and testified for the prosecution. The company paid South Gate $8.5 million in restitution and was taken over by Waste Management, which it had outbid for the contract in what was admitted to be a rigged process.
Robles argued on appeal that he could not be convicted of bribery because it was up to the City Council, not the treasurer, to award contracts. But Pregerson said Sec. 666—which relates specifically to bribery in connection with state and local entities that receive federal funds—does not require an official act upon the part of an officeholder involved in the bribe.
There was “ample evidence” that Robles inserted himself into the award of the contract in exchange for payoffs, Pregerson said. Robles, he explained, arranged to have a friend—onetime Los Angeles council candidate Lou Moret—hired as the facilitator for the bidding process, supplied Moret and Klistoff with confidential information at various steps of the process, and told Moret he wanted Klistoff to get the contract.
The opinion was joined by Senior Judge John T. Noonan and Richard A. Paez.
Other charges in the case involved a $24-million housing project for senior citizens that was to be built by Southland Cos., and a $4-million contract to an engineering firm, Psomas, to oversee sewer improvements.
Prosecutors claimed payments were routed to friends and relatives of Robles through Edward Espinoza, 50, a New Jersey financial consultant who pleaded guilty to money laundering, fraud and helping to prepare a false tax return. Prosecutors charged that Robles directed Psomas and Southland Cos. to hire Espinoza as a consultant, paying him more than $2 million.
Neither company was charged.
Assistant U.S. Attorney Elana Shavit Artson represented the government on appeal. The defendants were represented by Karen L. Landau and Dennis P. Riordan.
The United States v. Garrido, 06-50717.
Copyright 2013, Metropolitan News Company