22 October 2004 LAWFUEL – Law, crime, legal, attorney, law firm …

22 October 2004 LAWFUEL – Law, crime, legal, attorney, law firm newsAn elected director of a Los Angeles-area water district has been convicted of soliciting and accepting a bribe in exchange for supporting a contract valued at over $200,000 to be awarded by his agency. The defendant, Keith McDonald, was also found guilty of soliciting a $50,000 campaign contribution in exchange for his vote on a lobbying contract.
McDonald, 40, of Carson, who for the past 10 years has served as a director of the West Basin Municipal Water District (WBMWD), was found guilty of various corruption charges late Thursday. The jury in United States District Court in Santa Ana determined that McDonald was guilty of four counts of “honest services” mail fraud, two counts of bribery, one count of conspiracy to commit extortion under color of official right and three counts of money laundering.
The jury continued to deliberate today, but it was unable to reach a verdict on eight other counts. On Friday, the jury also made several determinations that United States District Judge Alicemarie H. Stotler will consider at sentencing, which has been scheduled for February 14, 2005.
WBMWD (www.westbasin.org ), with an annual budget of $100 million, serves nearly 1 million residents in several Los Angeles-area cities and unincorporated areas, including Carson, Hawthorne, Inglewood, Malibu, Manhattan Beach and West Hollywood. The jury determined that McDonald, while acting as an official of WBMWD, engaged in several corrupt activities. Specifically:
* that he paid three members of the Carson City Council $5,000 each in exchange for their votes in favor of a $6 million public bus service contract;
* that he demanded and received $30,000 in kickbacks in exchange for his support on a $3 million pipeline project; and
* that he solicited a $50,000 contribution to his California State Assembly campaign in exchange for his support of an expanded political consulting contract
* McDonald did not directly accept the proceeds of his corrupt activities; rather, he funneled the funds through companies controlled by associates or other third parties. McDonald then fraudulently declared, under penalty of perjury in publicly filed documents, that he was employed as a salaried consultant for these companies, when in fact he merely routed his corruption proceeds through these businesses.
* In addition to the 10 guilty verdicts, the jury acquitted McDonald of one count of mail fraud and two counts of bribery.
* As a result of the convictions, McDonald faces a statutory maximum penalty of 180 years in federal prison.
* A second man, Tyrone Smith, 47, of Ladera Heights, who served on the WBMWD board of directors from 1998 until 2003, was indicted at the same time as McDonald. In 2003, Smith pleaded guilty to extortion under color of official right and six counts of money laundering related to him extorting a bribe in exchange for his vote to award a debt-restructuring contract by the WBMWD. In 2001, Smith extorted a $25,000 payment from a representative of M.R. Beal & Company, a New York-based financial services firm. In return, Smith agreed to steer a multi-million contract to M.R. Beal’s partner on the deal, Rice Financial Products Company, a New York-based company which specializes in debt-restructuring services. Smith is currently scheduled to be sentenced by United States District Judge Nora M. Manella in Los Angeles on December 13, at which time he faces a maximum possible sentence of 140 years in federal prison.
* The investigation that led to the convictions of McDonald and Smith was conducted by the Federal Bureau of Investigation and IRS-Criminal Investigation Division.

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