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Wed, Jul

Ex-LA Deputy Mayor On Trial Again Over City Hall Racketeering Charges

LOS ANGELES

COURTHOUSE NEWS - A former Los Angeles deputy mayor for economic development went on trial for the second time Tuesday to fight charges he was part of the widespread racketeering scheme ran by convicted former City Councilman José Huizar.

Raymond Chan, 67, is the last remaining defendant to go on trial in the "pay-to-play" ploy whereby real-estate developers were forced to pay bribes in exchange for Huizar guiding their projects in downtown LA through the city's approval process. 

Prosecutors with the U.S. attorney's office claim Chan acted as a middleman between Huizar and deep-pocketed Chinese developers and went on to pocket bribes himself.

"Get money, keep power, avoid the feds," were the goals of the criminal enterprise in which Huizar and Chan complimented each others's influential roles at City Hall, Assistant U.S. Attorney Brian Faerstein told the jury in downtown LA during his opening statement.

Whereas Chan, initially as general manager of the city's Department of Building Safety and later as deputy mayor, oversaw construction during an unprecedented building boom in downtown LA, Huizar as councilman for the district that included downtown and as chairman of the Planning and Land Use Committee was the most powerful official in terms of getting developments approved, Faerstein said.

Huizar was sentenced to 13 years in federal prison earlier this year. 

Chan, the only one of indicted Huizar's circle who hasn't pleaded guilty or been convicted by a jury, went on trial last year, but after his lawyer fell seriously ill in the middle of the proceedings, the trial had to be ended

John Hanusz, one of Chan's attorney's, said in his opening statement that the prosecution's portrayal of Chan as a key participant in Huizar's massive bribery scheme was a fiction worthy of Hollywood.

"Ray Chan saw it as his mission to encourage development," Hanusz told the jurors. "He cut the red tape and he rolled out the red carpet."

There was no quid pro quo involving Chan, unlike with Huizar, according to the attorney, who added that the revitalization of downtown LA in the first two decades of this century wouldn't have happened without Chan's dedicated efforts.

Chan is charged with racketeering conspiracy, aiding and abetting bribery, bribery and lying to the FBI about his involvement in Huizar's racket.

According to the government, Chan introduced Huizar to Chairman Wei Huang, a Chinese billionaire and real estate developer who had bought the LA Grand Hotel Downtown and planned to redevelop the 13-story building into a 77-
story skyscraper. 

Huang, according to previous testimony of Huizar's former assistant, saw the councilman as an investment, and they bonded over the gambling and partying trips to Las Vegas.

Prosecutors say Chan knew about the illegal gifts Huizar received from Huang.

U.S. District Judge John Walter last month denied Chan's bid to keep the salacious details of those trips out of the trial because he never joined Huizar and Huang on the extravagant outings.

The details of the Las Vegas trips, Walter said, including that Huizar was always first served at dinner and got the first pick of the prostitutes Huang provided, were relevant to the prosecution's case against Chan because they were the financial benefit Huizar received as part of the bribery scheme Chan is charged with enabling.

"Isn't that important for the jury to understand?" the judge asked. "Huizar wouldn't have been selling his office for a stay in Motel 6 and dinner at Jack in the Box."

Huang was also indicted in the case, but he didn't come to the U.S. to face charges. The U.S.-based subsidiary of his real estate empire was convicted at trial and last year sentenced to pay a $4 million fine, the maximum allowed under the law — even if it was a drop in the bucket for the billionaire, who was known to lose as much as $2 million gambling in Las Vegas.

Chan, the government claims, also introduced Huizar to Chairman Fuer Yuan, another Chinese real state developer, who through his company Jia Yuan USA Co., also known as Hazens, had bought the Luxe City Center Hotel in downtown LA in 2014 with plans to develop the property into a $700 million mixed-use development.

Yuan's company agreed to pay more than $1 million in 2020 to resolve the criminal investigation into bribes that included Katy Perry tickets, illegal campaign contributions and a family trip China, provided to Huizar in exchange for his assistance with the project.

Chan is accused of receiving a cut of the consulting fees Hazens paid a local real-estate agent, with whom he had secretly set up a consulting business while he was still working for the city, in exchange for Chan's help getting the Luxe Center through the entitlement process.

Hazens paid the consulting business $35,000 a month as well as about $500,000 in so-called milestone payments, and Chan had arranged to receive half the money after he left City Hall and openly joined the business. 

Chan's partner in that endeavor, George Chiang, pleaded guilty to racketeering conspiracy and will testify against Chan at the trial.

(Edvard Pettersson is a Los Angeles-based reporter for Courthouse News, covering federal and state courts, civil and criminal cases. Born in Amsterdam, Edvard has covered Southern California news for the Los Angeles Business Journal and Bloomberg News. This article was first featured in Courthouse News.

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