Chinese company fined $4 million for bribing ex-LA Councilmember Jose Huizar

A Chinese real estate company was fined $4 million and placed on five years probation today for bribing former Los Angeles City Councilmember José Huizar with more than $1.5 million in cash, gambling trips and escorts in exchange for the then-councilmember’s support of a planned downtown hotel skyscraper project.

Although he was also charged, Shen Zhen New World I’s billionaire owner Wei Huang fled to China after charges were announced and has never appeared in a Los Angeles courtroom in connection with the case.

The trial which took place last October and November was one of three separate proceedings arising out of a 34-count indictment against Huizar and his associates alleging wide-ranging political corruption centered on the Planning and Land Use Management Committee, commonly referred to as the PLUM Committee, which oversaw commercial and residential development projects in the city and was headed by the ex-councilman.

Evidence presented at the Shen Zhen trial showed the company — on behalf of its owner — purchased the L.A. Grand Hotel in downtown Los Angeles, located in the 14th Council District, whose representative at that time was Huizar. As part of his role on the council, Huizar oversaw major commercial and residential development projects in the city.

In June 2018, Shen Zhen filed an application with the Los Angeles City Planning Department to redevelop the L.A. Grand Hotel into a 77-story skyscraper featuring a mix of residential and commercial uses.

From February 2013 to November 2018, Shen Zhen, acting through Huang, provided Huizar and an aide with cash, casino gambling chips, flights on private jets and commercial airlines, stays at luxury Las Vegas hotels and casinos, expensive meals, spa services, prostitution services, political contributions and a $600,000 loan for Huizar to confidentially settle a pending sexual harassment lawsuit brought by a former staffer that threatened his re-election.

The jury found the benefits provided to Huizar were intended to secure his approval of the L.A. Grand Hotel redevelopment project, a project the developers said would have been the tallest such structure west of the Mississippi River.

The company’s attorneys unsuccessfully argued the proposed development was “universally loved” at City Hall because of the jobs, tax revenue and prestige it would bring — so there was no reason to bribe anyone.

The November 2020 indictment charged Huang and Shen Zhen with bribery in three forms: bribery of a public official; interstate and foreign travel in support of bribery; and devising and participating in a scheme to defraud the city of Los Angeles and its citizens of Huizar’s honest services.

Huizar pleaded guilty in January in Los Angeles federal court to felony charges for using his powerful position at City Hall to enrich himself and his associates, and for cheating on his taxes. He faces multiple years behind bars at a sentencing hearing scheduled for Sept. 25.

The federal criminal trial of Huizar’s co-defendant, former Los Angeles Deputy Mayor Raymond Chan, is on hold until Chan hires a new lawyer. A mistrial was declared in Chan’s first trial last month after his attorney, Harland Braun, was taken ill and could not continue appearing in court.

Chan is facing a dozen criminal counts, including racketeering conspiracy, bribery, honest services fraud and lying to federal agents for his alleged role in the pay-to-play scheme linked to Huizar that prosecutors say soaked developers for millions of dollars in exchange for getting their building projects approved at City Hall.

Last June, real estate developer Dae Yong “David” Lee and one of his companies were found guilty of federal criminal charges for providing $500,000 in cash to Huizar and his special assistant in exchange for their help in resolving a labor organization’s appeal of their downtown Los Angeles development project.

Lee and his 940 Hill company are set to be sentenced on July 21.