Wednesday, April 14, 2021

Torrance real estate developer pleads guilty to campaign money laundering case

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A Torrance-based real estate developer pleaded guilty Thursday to felony conspiracy, closing a major chapter in a campaign money laundering case that covered more than six years’ worth of political contributions to eight politicians.

Businessman Samuel Leung, 70, pleaded guilty to one count of conspiracy to commit campaign money laundering, admitting he took part in a scheme to reimburse campaign donors between January 2009 and February 2015 — just as his six-story apartment project was being reviewed and approved at Los Angeles City Hall.

State law prohibits donors from making political contributions in the name of another person. After Thursday’s hearing, the Los Angeles County district attorney’s office said Leung was guilty of illegally donating “hundreds of thousands of dollars” in the hope that local elected officials would rezone his property and approve his 352-unit project in L.A.’s Harbor Gateway neighborhood.

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Daniel Nixon, Leung’s attorney, did not respond to requests for comment. Superior Court Judge Jose I. Sandoval dismissed a related bribery charge against Leung.

The guilty plea came more than four years after a Times investigation revealed that a sprawling network of more than 100 people and companies with direct or indirect ties to Leung — including relatives, business partners, coworkers and others — made political donations totaling more than $600,000 while Leung’s project, then known as Sea Breeze, was under review. The project was approved in 2015.

In 2016, The Times went to the homes and workplaces of dozens of donors to ask them about their contributions. Among those who agreed to be interviewed, 11 denied making contributions or said they didn’t remember doing so. One Chatsworth resident told The Times she had been reimbursed for at least one of her donations.

Leung had been facing a possible maximum sentence of four years and eight months in state prison. On Thursday, he was sentenced to five years’ probation and 500 hours of community service. He also agreed to pay an as-yet-undetermined amount of restitution to the city of Los Angeles.

The real estate developer will put $2.5 million into an escrow account until the city’s Ethics Commission determines the amount he owes, Nixon said during the hearing.

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Leung’s money laundering case is separate from a federal corruption probe that centers on real estate development, campaign donations and alleged bribes in the district represented by Councilman Jose Huizar, who was effectively ousted by his colleagues several months ago.

In that case, federal prosecutors alleged that Huizar ran a criminal enterprise in which businessmen provided campaign donations, hotel stays, casino chips and other gifts in exchange for help with their real estate projects. Huizar has pleaded not guilty to racketeering, bribery and other charges.

Two years after The Times published its Sea Breeze investigation, prosecutors in the district attorney’s office filed charges alleging Leung and a secretary, Sofia David, made political donations without revealing that the money either came from him or was reimbursed to the donors by him and “others acting at his direction.”

David, who was also charged with conspiracy to commit campaign money laundering, still has not been arrested. Prosecutors said she remains a fugitive.

The Leung case was jointly investigated by the D.A.’s office, the FBI, the U.S. Attorney’s Office and the Ethics Commission.

Leung proposed his Harbor Gateway apartment project, located on Sepulveda Boulevard near Normandie Avenue, roughly a decade ago. It was initially opposed by staffers in the Department of City Planning, who advised against rezoning the site from manufacturing to a commercial land use. The Planning Commission, made up of appointees of Mayor Eric Garcetti, rejected the project outright.

Garcetti and the City Council took steps to overrule the commission’s decision in 2014 and 2015, paving the way for Sea Breeze to be built.

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While the project was under review, Leung’s employees, business partners and many others in his orbit made donations to campaigns, officeholder accounts and political committees supporting an array of elected officials, including Garcetti, County Supervisor Janice Hahn and City Councilman Joe Buscaino, who represented the Harbor Gateway neighborhood.

The Times’ investigation found that a single house, located on 223rd Street in unincorporated West Carson, generated more than $40,000 in political donations from a handful of residents — Mexican and Central American immigrants who had jobs working on Leung properties. One person living in the house, a repairman originally from El Salvador, gave 22 donations totaling $20,300 over roughly eight years, according to contribution reports.

More than half of the repairman’s donations went to committees supporting Hahn while she was on the council and pursuing local, state and federal office. Asked why he donated so much money to Hahn, he said he could not remember.

Over several years, Hahn received about $203,000 from donors directly or indirectly connected to Leung, much of it while she was serving on the council representing the district where Sea Breeze had been proposed.

Asked about Leung’s plea, Hahn issued a one-sentence statement. “I hope he is held accountable,” she said.

Buscaino, who replaced Hahn as the Harbor area’s representative in 2012, received $94,700 in contributions from donors connected to Leung. He was also a proponent of the project. On Thursday, when asked about the case, Buscaino said campaign finance laws are meant to ensure public trust in the election process.

“Anyone who breaks these laws must be held accountable and that is what happened today,” he said.

Buscaino told The Times in 2016 that he would return any campaign funds found by investigators to be improper. On Thursday, an aide to the councilman said the political accounts that received the money were closed years ago. Instead, he said, an equal amount of money has been “redistributed to local nonprofits.”

A political committee that supported Garcetti’s 2013 mayoral bid, but was not controlled by him and operated independently from his campaign, received $60,000 from companies and individuals with ties to Leung.

On Thursday, a Garcetti spokesman said the mayor’s own campaigns did not accept donations from Leung or his associates.

“The mayor was unaware of any misconduct when he chose to support the housing project,” said Garcetti aide Alex Comisar. “He hopes Mr. Leung faces the consequences for his illegal behavior.”

Other politicians who received donations from peopleconnected to Leung included Huizar, former Councilman Mitchell Englander and Councilman Gil Cedillo — all of whom served on the council committee that reviewed Sea Breeze in 2014. Donations also went to the 2015 reelection campaign of Councilwoman Nury Martinez.

Martinez is now council president. Englander pleaded guilty in July as part of the federal government’s “pay to play” corruption probe.

Sea Breeze opened last year and is now occupied by tenants. The development now goes by the name Seacrest Homes.

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