A federal trial is underway against Shen Zhen New World I, a company owned by a fugitive Chinese billionaire developer who was charged in the corruption case against former L.A. City Councilman José Huizar. Billionaire Wei Huang planned to build a 77-story tower on the site of the L.A. Grand Hotel downtown, but federal prosecutors say the company bribed the ex-councilman, who faces federal bribery and fraud charges.
Opening statements began Thursday, Oct. 27 in the federal trial of the company owned by missing developer Huang who allegedly gave ex-Los Angeles Councilman Jose Huizar $1.5 million, including $250,000 in casino chips and a $600 loan which Huizar never paid back. But a thick trial memo written by federal prosecutors unveils dramatic new fireworks, alleging that Huizar was so entangled with Huang that he traveled with the billionaire to Las Vegas 19 times.
The government’s trial memorandum, filed with the U.S. District Court on Oct. 17, outlines the evidence federal prosecutors seek to present, and what they expect, during the trial of Shen Zhen New World I. Its owner, Huang, is believed to be in China.
The case includes voluminous records and the new details allege that the relationship between the powerful council member and the powerful billionaire was significantly closer than previously reported.
A federal prosecutor told a jury on October 27 that the China-based hotel company owned by Huang provided Huizar with over $1 million in bribes, trips on private jets and “casino chips and prostitutes” in exchange for his official support of a downtown L.A. skyscraper project.
Huang wanted to build the tallest skyscraper on the West Coast at West 3rd and Figueroa streets, where the Huang-owned Grand Hotel still stands. The defense said that L.A. city officials “universally loved” Huang’s proposed project, so “there was no reason to bribe anyone” to approve it.
Shen Zhen New World I is charged by the Department of Justice with interstate and foreign travel in support of bribery, devising and participating in a scheme to defraud the city of Los Angeles and deny its citizens of Huizar’s honest services.
The trial against Huang’s company, Shen Zhen New World I, offers a glimpse into the alleged criminal relationship between the billionaire real estate developer and the high-rolling former councilman, whose District 14 included much of downtown and is now represented by Councilman Kevin de Leon who, himself, is caught in a more recent City Hall scandal.
Former Los Angeles City Councilman Jose Huizar is seen at the Cosmopolitan in Las Vegas in August 2016. The photos were part of the criminal complaint filed against Huizar in 2020. (Courtesy of U.S. District Court)
Loyola Law School professor Jessica Levinson, who served on the L.A. City Ethics Commission, said federal prosecutors are trying to present evidence showing that Huizar had a relationship with the billionaire real estate developer that stretched well beyond what has previously been reported.
“I think what (federal prosecutors) are really trying to show is closeness and coziness and the possibility of favors and favoritism and preferential access,” Levinson said.
Representatives for Huizar and Shen Zhen New World I didn’t respond to multiple requests for comment.
Huang, who also maintains a residence in the upscale San Gabriel Valley suburb of San Marino, did not appear in court before he vanished, according to Thom Mrozek, a spokesman for the U.S. Attorney’s office, who added that charges against Huang will remain pending.
“It will be a criminal trial, and it’s just (that) the defendant is a corporate entity,” Mrozek said. “You can’t put a corporate entity in prison, but you can — if it’s convicted — obtain another sanction against it like probation, court supervision, fine and restitution.”
On the opening day of the trial, federal prosecutors said that Huang allegedly provided Huizar and his special assistant George Esparza with a “lineup of prostitutes for their choosing” during the trips, adding that “It would become a recurring theme of their trips together.”
However, Richard M. Steingard, co-counsel for Shenzhen New World, countered that while Huizar took trips with Huang, the benefits were freebies paid for by the casinos in order to keep the billionaire developer, known as a high-rolling “whale” in the gambling world, returning.
Steingard told the jury that the trips “had absolutely nothing to do with the L.A. Grand Hotel redevelopment project,” and Huang never asked the then-councilman for “anything of consequence” in exchange. Huang never asked for special favors or official support for his proposed skyscraper because City Hall officials “universally loved” the concept, which would bring countless jobs to downtown, according to the attorney.
“There was no reason to bribe anyone,” the defense said. Steingard added that there is no evidence Huizar took any action regarding the project.
According to the memo, federal prosecutors will present evidence of extensive benefits Huang allegedly gave to Huizar and Esparza during each Las Vegas trip, during which Huizar allegedly laundered the money he got from Huang.
Prosecutors said Shen Zhen New World I acquired the L.A. Grand Hotel in 2011 for $90 million and planned to redevelop it into a skyscraper featuring a mix of commercial space along with residential and hotel rooms, filed an application with the city planning department in June 2018. But the company failed to submit the necessary paperwork to the city before the 2021 deadline, leading to the termination of the application.
An FBI agent carries a case from the home of Los Angeles Councilman Jose Huizar in Los Angeles on November 7, 2018. – The FBI served sealed warrants at the home, field and City Hall offices of Huizar. FBI officials declined comment on what the searches entailed. (Photo credit FREDERIC J. BROWN/AFP via Getty Images)
Prosecutors allege that Huang’s company provided Huizar with casino gambling chips cash, flights on private jets, lavish meals and trips to Las Vegas. In exchange, prosecutors allege, Huang expected Huizar to hurry the city approval process for his L.A. Grand Hotel commercial and residential project.
“The stream of bribes turned into a flood” as Huang lavished Huizar with gifts, including a 10-day trip to Australia, visits to golf resorts, luxury suites, cash and private gambling in Las Vegas hotels, Assistant U.S. Attorney Patrick Castañeda alleged.
Huizar’s mother Isidra Huizar, his brother Salvador Huizar and his wife Richelle Rios is among 14 witnesses expected to be called by federal prosecutors.
According to the memo, Rios, who is still married to Huizar, will testify about multiple instances in which she deposited large amounts of cash into her personal checking account that she allegedly got from Huizar.
The disturbing memo says Huizar used his own family members to allegedly launder bribes that prosecutors claim Huizar got from Huang.
“Huizar consistently concealed the benefits he received, and his relationship with Mr. Wei Huang tends to demonstrate that Huizar understood that the money he received was for a corrupt purpose,” the federal prosecutors’ memo says,
The L.A. Grand Hotel project caught the eye of the FBI and became part of a broad federal investigation into alleged pay-to-play scandals, dubbed Operation Casino Loyale by the Department of Justice, which started in August 2015.
That investigation has mired City Hall in political downfalls and court cases. The investigation led to different corruption cases, and guilty pleas from city officials including former City Councilman Mitch Englander and Esparza, along with Salvador Huizar, his brother.
Neama Rahmani, a former federal prosecutor and former director of enforcement at the Los Angeles City Ethics Commission, said it’s rare for a company to be prosecuted.
“It’s important to Huizar’s case because you see how they are providing him bribes, checks, contributions, loans,” he said. “It’s very important for all that evidence to come out because we know Huizar was the chair of the Planning and Land Use Management Committee. He had the power to approve the development projects and the fact that he had that close and cozy relationship with Shen Zhen (New World LLC, the company owned by Huang) is very important.”
“The jury wants to hear a story,” he said. “The jury will want to know how this is all connected.”
Federal prosecutors, Rahmani added, “don’t want to rely on Salvador (Huizar) alone and you don’t want to rely on one particular witness, especially the one who pled guilty like Salvador or even Esparza.”
“If you are a prosecutor, you don’t want to rely on rats” who sometimes implicate others in hopes of a lighter sentence. “They maybe pled guilty to get a lesser sentence,” he explained. “You want to bring all this evidence in, so jurors know how it’s all connected.”
Huizar was indicted in 2020 by a federal grand jury on charges he accepted bribes and gifts from developers, and others, in exchange for favors.
Huizar has pleaded not guilty and has denied wrongdoing, and is set to go to trial on February 21, 2023, along with former Los Angeles Deputy Mayor Raymond Chan.
Prosecutors wrote in the memo that Huang and Huizar were introduced to each other as early as 2013 by Raymond Chan, another top city official who headed the Los Angeles Department of Building Safety and who, federal prosecutors say, was part of Huizar’s alleged enterprise.
“According to Esparza, there was an expectation that Huizar would be there if and when Mr. Huang needed something. And Huizar ultimately told Mr. Huang that he would help Shen Zhen with the L.A. Grand Hotel expansion project,” according to the memo.
The trial began amid another scandal that roiled City Hall after three council members, Nury Martinez, de Leon and Gil Cedillo — along with the leader of the Los Angeles County Federation of Labor President, Ron Herrera — were secretly recorded during a 2021 meeting making racist remarks. After the tape became public, setting off widespread demands that the councilmembers give up their posts, Martinez and labor leader Herrera have resigned from their powerful positions.
In addition to these cases Councilman Mark Ridley-Thomas was suspended from the city council by his colleagues in 2021 for allegedly helping his son get a position at USC in exchange for county contracts that benefitted USC.
City News Service contributed to this report.