Conviction of Developer May Mean Bad News for City Councilman’s Corruption Trial

Cityside Column: The challenge grows for José Huizar, who is accused of bribery and racketeering and goes to trial in February

Federal court proceedings and rock concerts tend not to have much in common. But the approaching corruption trial of District 14 Councilman José Huizar just got something every top musician wants—an epic and exciting opening act.

On June 27, a jury in a Downtown L.A. courtroom brought the hammer down on developer Dae Yong “David” Lee, a Bel Air resident who stood accused of funneling $500,000 to Huizar in the effort to move the building of a housing complex forward; Lee was found guilty on three counts. The convictions on honest services wire fraud and obstruction each bring a maximum sentence of 20 years. If there is any sunshine, perhaps it’s that the bribery count can only deliver up to 10 years in prison. Sentencing in the case is set for September.

The nine-day trial focused on Lee’s effort to build a 200-unit project on Hill Street in Downtown Los Angeles. While the ruling means Lee is likely headed to the pokey (though his attorney told reporters that the developer plans to appeal), perhaps the other person most impacted by the jury’s verdict is the erstwhile council member, who faces a February trial on—gulp—41 charges.

This continues what may be a Los Angeles politician’s ugliest-ever multi-year run. Back on Nov. 7, 2018, FBI agents raided the council member’s City Hall office and agents carted away boxes of material. A similar action took place that morning at Huizar’s Boyle Heights home; that raid involved a sniffer dog named Ginger who, according to reports, was trained to seek out hard drives and electronic equipment.

The case went quiet for more than a year but that proved to be the calm before the typhoon. In March 2020, former District 12 Council member Mitch Englander was arrested for his part in what would come to be known as Operation Casino Loyale (he would plead guilty to one count and do a brief stint in an Arizona prison). Huizar was taken into custody in June and charged with racketeering and other crimes. He was soon suspended by his council colleagues and saw his pay yanked. Huizar has steadfastly maintained his innocence.

So far, nine individuals have been charged in the case. As of now, five have pleaded guilty.

Getting to the first trial and having a verdict issued so quickly—jurors deliberated for only a day—is a resounding victory for the Los Angeles branch of the U.S. Department of Justice, which spent years lining up evidence and getting the accused individuals to flip on those further up the food chain. Perhaps even more important than getting the conviction is that now, federal prosecutors know that their tactics work as intended.

“This case was a trial run,” one person well versed in federal investigations told LAMag. “This was a dress rehearsal.”

Lee’s defense was built on the claim that he was a legit businessman who thought the $500,000 was going to consultants who would help thwart objections to the project raised by the labor group Creed L.A. Prosecutors argued that all parties knew the money was what Huizar was charging to make the challenge go away. Court documents describe the council member as the head of a cabal, termed the District 14 Enterprise, who would determine which projects were to move forward in his district. His influence was cemented through his role as chair of the council’s powerful Planning and Land Use Management Committee.

During the trial, Lee’s argument was methodically dismantled, with Justin Kim, a former fundraiser for Huizar, and George Esparza, his ex-assistant, testifying that they’d had liquor boxes stuffed with cash sent to them from Lee, with the aim that the money would wind up in the council member’s pocket. Attorneys for the developer asserted that Kim and Esparza could not be trusted because they had pleaded guilty in an effort to reduce their own sentences. The jury was having none of that argument.

Now, the source familiar with the investigations speculates that with a conviction upon him, Lee and his legal team might consider cooperating with prosecutors before the Huizar trial in an effort to reduce what could be a very long prison sentence.

Huizar has been quiet, but a hint of his potential defense was laid out in the fall. In unsuccessful efforts to have the case thrown out, attorneys argued that some charges were overly broad and that prosecutors had confused favors with bribes—particularly when it came to dealing with a booming downtown full of big-money projects.

The next related trial, scheduled for October, involves Chinese developer and fugitive Wei Huang and his company Shen Zhen New World, LLC; Huang is also charged with bribery. The company had sought to build a 77-story tower in Downtown L.A.

But the truly big show is set for February, when Huizar and Ray Chan, the former head of the city’s Department of Building and Safety, will appear in the courtroom of U.S. District Judge John Walter; Chan also maintains his innocence. Each faces charges including violation of the RICO Act, which is traditionally used for prosecuting organized crime. Huizar stands accused of having accepted at least $1.5 million in illicit funds.

The question now is whether or not prosecutors’ success in the Lee trial will prompt others to seek a plea deal, rather than risk everything in front of a jury.

However, LAMag’s expert source points out something truly daunting: Even if Huizar and his legal team pursue this option, the feds might say no. After convicting Lee, they may be supremely confident in their case, evidence, and witness list.

“They don’t need to avoid a trial. They’d rather try cases. This is what they do,” the source said. “They’re motivated to try cases and get the conviction.”

If Huizar has his day in court, then it might be like what happens when the rock band finally takes the stage—no matter how good the opening act, the headliner is always explosive.

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