Page 1
Ninth Circuit:
Bribery Conviction Against Pay-to-Play Developer Is Sound
Opinion Says Company’s Lavishing of Gifts on Disgraced Former City Councilmember Jose Huizar Suffices to Establish Requisite Intent Even in Absence of Quid Pro Quo Agreement
By Kimber Cooley, associate editor
|
|
|
WEI HUANG fugitive |
The Ninth U.S. Circuit Court of Appeals yesterday affirmed the convictions of a real estate development company that sought to redevelop the L.A. Grand Hotel in downtown Los Angeles into the tallest skyscraper west of the Mississippi River for its part in a pay-to-play bribery scheme with then-City Councilmember Jose Huizar.
When the defendant is the one offering the bribes, the court held, a conviction may be supported by proof that the party offering a benefit to a public office-holder did so with the intent to influence an official act regardless of whether any quid pro quo agreement is established.
Appealing the convictions was Shen Zen New World I LLC, a developer owned and operated by Wei Huang. Huang was also indicted for bribery-related charges but retreated to China when news of the investigation began to leak.
In 2022, Shen Zhen was found guilty by a jury on three counts of honest-services mail and wire fraud, in violation of 18 U.S.C. §§1341, 1343, and 1346, one count of federal-program bribery in violation of 18 U.S.C. §666(a)(2), and four counts of interstate and foreign travel in aid of racketeering, in violation of the Travel Act found at 18 U.S.C. §1952(a)(3).
The federal bribery statute, 18 U.S.C. §201, makes it a crime to offer anything of value to any public official with the intent “to influence any official act” or “to induce such public official…to do or omit to do any act in violation of the lawful duty of such official.” By its terms, §201 applies only to federal officials, but 18 U.S.C. §666 extends the law to cover state and local officials who receive federal funds.
In May 2023, District Court Judge John F. Walter of the Central District of California sentenced Shen Zen to five years of probation and ordered the company to pay a $4 million fine.
Relationship Pursued
The company had purchased the hotel in 2010 for $63 million with the hopes of transforming the property into a 77-story mixed-use skyscraper. Following the purchase, Huang pursued a relationship with the city councilmember, who at the time represented the district covering the downtown area and chaired the council’s Planning and Land Use Management Committee (“PLUM”).
Huang invited Huizar to all-expense-paid trips to Las Vegas which included flights on a private jet, luxury hotel villas with private pools, money in the form of gambling chips, car services, expensive food and alcohol, and prostitutes. Over a four-year period, Huizar was taken on 20 trips and given approximately $260,000 in gambling chips.
The defendant also assisted Huizar with a hush-money payment after a sexual-harassment lawsuit, initiated by a former staffer, threatened Huizar’s 2015 reelection, funneling $600,000 through a foreign shell company for Huizar to use as collateral for a private loan to settle the suit.
Shen Zen associate Ricky Zheng said that Huang planned to “give, give, give” as an “investment” until it was time to make the “big ask” for Huizar’s support in the redevelopment project.
When Huang asked for Huizar’s support on the project in 2016, the councilmember pledged his loyalty to the developer.
Circuit Judge Gabriel P. Sanchez wrote the opinion affirming the judgment of conviction. Sanchez said that Shen Zhen’s assertion on appeal conflates the specific intent required of a bribe-giver with that of a bribe-taker, saying:
“When the defendant is the bribe-giver,…the bribery offense does not require an agreement to enter into a quid pro quo with the public official. Under the plain terms of §201, the bribe-giver commits bribery when he ‘corruptly gives, offers or promises anything of value to any public official’ ‘with intent…to influence any official act.’ ”
Senior Circuit Judge Richard A. Paez and Circuit Judge Kim McLane Wardlaw joined in the opinion.
Quid Pro Quo
Sanchez acknowledged that a public official is guilty of bribery under the code if that person engages in a quid pro quo scheme by agreeing to receive something of value knowing that it was given with the expectation that he would perform a favorable official act for the giver’s benefit.
Noting that “[s]everal of our sister circuits have drawn….a mens rea distinction between bribe-givers and bribe-takers,” Sanchez said the court declines to require proof of a quid pro quo when the defendant is the one offering the bribe rather than receiving it. In that circumstance, he declared, “a defendant offering a benefit to a public official with the intent ‘to influence any official act’ in exchange suffices for federal bribery charges.”
Applying the standard to Shen Zhen’s convictions, the judge remarked:
“[T]he evidence at trial was more than sufficient to support conviction for…fraud….The evidence established that Shen Zhen provided benefits—amounting to over one million dollars—to Huizar intending to receive official action supporting Huang’s L.A. Grand Hotel redevelopment project. Huang took Huizar on over a dozen all-expense paid trips to Las Vegas, furnished him with hundreds of thousands of dollars in gambling chips, expensive food and alcohol, and prostitutes, and helped settle Huizar’s sexual harassment lawsuit with a $600,000 payment—all in exchange for Huang’s ‘big ask’: official support from Huizar on the redevelopment of the L.A. Grand Hotel.”
Sanchez continued:
“Huang did not need to voice his requests for official action explicitly at the same moment he paid for Huizar’s trips to Las Vegas or provided other benefits. Instead, as the evidence showed, Huang’s intent was to ‘give, give, give’ before making the ‘big ask,’ an intent made clear by…testimony that Huizar agreed to ‘100 percent support’ the redevelopment project through official acts such as changing ordinances, rezoning the building, and moving the project through the PLUM committee he chaired.”
Official Act
The jurist added:
“Huizar’s official act prior to Huang’s ‘big ask’ also supports the jury’s verdict….During the discussions with Huang over the lawsuit settlement payment, Huizar moved and voted for a City resolution honoring Huang in a formal City Council proceeding….The jury, in its special verdict form, found that Shen Zhen had provided financial benefits to Huizar with the specific intent of receiving an ‘official act’: Huizar’s introduction and vote on a City resolution that would enhance Shen Zhen and Huang’s ‘professional reputation and marketability’ in Los Angeles and benefit Shen Zhen’s redevelopment of the L.A. Grand Hotel. Substantial evidence supports the jury’s official act finding.”
Turning to the other convictions, Sanchez reasoned that “[t]he same evidence also supports Shen Zhen’s” other fraud convictions as they “entail the same or more permissive mens rea requirements.”
The case is U.S. v. Shen Zen New World I LLC, 23-972.
In January, Walter sentenced Huizar to 13 years in federal prison for engaging in this and other pay-to-play bribery schemes. Huizar was originally scheduled to begin his sentence on April 30, 2024, but Walter has granted two requests by the convicted felon for delays in starting his prison term.
Huizar now has until noon on Oct. 7 to begin serving his sentence.
Copyright 2024, Metropolitan News Company