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29 March 2005 – LAWFUEL – The Law News Network – Expanding a …

29 March 2005 – LAWFUEL – The Law News Network – Expanding a corruption case that focuses on former South Gate mayor and treasurer Albert T. Robles, a federal grand jury has returned a superseding indictment that implicates a close Robles associate in a scheme to obtain millions from a waste hauler seeking a contract with the city.

The now-42-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 $1.4 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, campaign contributions and a consulting contract for his friend.

The new defendant, George Garrido, who owns GWS Nursery & Supplies in South Gate, is charged with taking a lucrative consulting contract in exchange for the city awarding a multi-year contract to a trash hauler.

The superseding indictment charges:
* 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;
* Garrido, a 53-year-old South Gate resident and long-time friend of Robles;
* Michael Klistoff, 42, of Seal Beach, California, an official of Klistoff & Sons and All City Services, both waste-hauling companies.
* Previously in this case, Edward T. Espinoza, 50, of Summit, New Jersey, pleaded guilty to mail fraud, wire fraud, money laundering, and aiding and assisting in the preparation of a false tax return. Espinoza, a financial consultant who Robles allegedly used to funnel city money to himself and his family, is scheduled to be sentenced on October 31.
* The superseding indictment outlines two schemes in which Robles allegedly used his influence as a city official to extort money and other benefits for himself, his family and friends, and his political action committee.
* 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, and PSOMAS, a consulting firm that was hired to manage a sewer rehabilitation project in South Gate. Neither of the companies is accused of wrongdoing.
* As a result of this part of the scheme, more than $2 million was paid to Espinoza. In turn, Espinoza, through EM Ventures, paid nearly $1.4 million 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 $65,000 in payments for a “platinum” membership for Robles in a self-help motivational organization.
* Garrido is not charged in relation to this first scheme, however the Southland Companies allegedly agreed to give Garrido $100,000 and a 40 percent ownership interest in a housing project that the Southland Companies wanted to develop.
* As a result of this conduct, Robles is charged with 12 counts of mail fraud, five 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. Additionally, Garrido, who introduced Robles to Klistoff, received a consulting contract that was to pay him $350,000 annually for the life of the 10-year contract, or $3 million if the contract was terminated. Garrido was paid a total of $437,500.
* In relation to this scheme, Robles, Klistoff and Garrido are charged with 11 counts of mail fraud. Robles and Klistoff are 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.
* All three defendants are expected to be arraigned on the indictment Monday morning in United States District Court in Los Angeles.
* 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.