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19 November 2004 – LAWFUEL – Legal, law, law firm news – Albert T. …

19 November 2004 – LAWFUEL – Legal, law, law firm news – Albert T. Robles, the former treasurer of South Gate, California was arrested by federal authorities this afternoon after being indicted yesterday on federal corruption and money laundering charges.

A 39-count indictment alleges that the citizens of South Gate were defrauded out of their right to Robles’ “honest services” in a scheme that cost the city at least $12 million and led to payments of more than $1.2 million to Robles, his family and his friends. In a second fraud scheme, Robles allegedly steered a waste-hauling contract to a company in exchange for gifts and campaign contributions.
Those named in the indictment returned late Thursday by a federal grand jury in Los Angeles are:
* Robles, a 39-year-old resident of South Gate, who served as an elected official of South Gate from 1992 until he was recalled from office in 2003;
* Edward T. Espinoza, 50, of Summit, New Jersey, a financial consultant who Robles allegedly used to funnel city money to himself and his family; and
* Michael Klistoff, of Seal Beach, California, an official of Klistoff & Sons and All City Services, both waste-hauling companies.
* Robles is expected to make his initial court appearance this afternoon in United States District Court in Los Angeles. Espinoza and Klistoff will be summoned to appear in court in December.
* In the first scheme, Robles allegedly induced several businesses hoping to receive city contracts and other benefits to hire Espinoza, who received money that was later funneled to Robles’ family and friends. As part of this scheme, Espinoza created a shell corporation, called EM Ventures, to receive city monies and to make payments to Robles’ family and friends. The companies allegedly induced by Robles to hire Espinoza were:

* The “Southland Companies,” a collection of companies that had development projects in South Gate;
* United Constructors, a construction and engineering firm that was involved in litigation with South Gate; and
* PSOMAS, a consulting firm that was hired to manage a sewer rehabilitation project in South Gate.
* None of the three companies are accused of wrongdoing.
* As a result of this part of the scheme, a total of $2,156,606 was paid to Espinoza. In turn, Espinoza, through EM Ventures, paid $1,242,588 for the benefit of Robles, his family and his friends. The indictment outlines a series of payments from Espinoza to Robles that include $120,000 that went toward the purchase of a condominium in Baja California and a $55,000 payment for a “platinum” membership for Robles in a self-help motivational organization.
* As a result of this conduct, Robles and Espinoza are charged with 10 counts of mail fraud, seven counts of wire fraud and four counts of money laundering.
* The second scheme outlined in the indictment involves the award of South Gate’s $48 million refuse and recycling contract to Klistoff & Sons in exchange for thousands of dollars in gifts to Robles and campaign contributions to Robles’ committee, Citizens for Good Government. In relation to this scheme, both Robles and Klistoff are charged with eight counts of mail fraud, and each defendant is separately charged with five counts of receiving/giving bribes.
* An indictment contains allegations that a defendant has committed a crime. Every defendant is presumed innocent until and unless proven.
* The mail and wire fraud charges each carry a maximum potential sentence of 20 years in federal prison. The bribery and money laundering charges each carry a maximum potential sentence of up to 10 years in prison.
* This case is the result of an investigation by the Federal Bureau of Investigation and IRS-Criminal Investigation Division.

British MP George Galloway and his opponent the Daily Telegraph will leave no stone unturned to sort out what could be a spectacular libel case.