Los Angeles

FBI Corruption Probe Underway Into LA Real Estate Development Deals

January 14, 2019 / 9:29 PM PST / KCAL News

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LOS ANGELES (CBSLA) – The FBI is seeking evidence of possible bribery, extortion, money laundering and other crimes as part of a corruption investigation at Los Angeles City Hall focusing on huge real estate investments from Chinese companies.

Federal investigators have cast a wide net for information about foreign investment in Los Angeles real estate development, according to a search warrant that names an array of political and business figures, the Los Angeles Times reported Monday morning.

Among those named are executives of Chinese firms bankrolling two ambitious downtown projects that would result in three new towers on Figueroa Street. Investigators are also seeking records about L.A. development projects involving other foreign investors, including firms with large-scale hotel and residential projects in Downtown, The Times reported.

The warrant does not say the FBI has gathered evidence of criminal activity by any of the people or companies named in the document. No one has been arrested or charged in the investigation.

The federal investigation became public in November, when FBI agents descended on the home and offices of Los Angeles City Councilman Jose Huizar, who represents the vast majority of downtown.

At the time, an FBI spokesperson indicated there was more to the investigation.

"The FBI simultaneously is executing additional warrants in the L.A. area," FBI Assistant Special Agent David Nance said in November. "Unfortunately, because the warrant is sealed, I cannot comment on the nature of the warrant or the target of the warrant."

Since then, The Times has reported that investigators have sought records involving a longtime lobbyist and a fundraiser close to City Hall.

The warrant, which was filed in federal court in November but reviewed by The Times this weekend, sheds new light on the investigation and shows federal investigators are seeking records related to not only Huizar but also other City Hall officials, including Councilman Curren Price and current or former aides to Huizar, Council President Herb Wesson and Mayor Eric Garcetti.

Until recently, Huizar headed the powerful council committee that vets development projects. Price, in turn, heads a council committee focused on economic development, which reviews taxpayer subsidies offered by the city to hotel developers in and around downtown.

The warrant is not the only sign of FBI interest in L.A. development, The Times reported.

In recent months, real estate developers with projects in Huizar's downtown-to-Eagle Rock district have received federal grand jury subpoenas instructing them to turn over communications with the councilman and dozens of current and former Huizar staffers since 2013, two sources familiar with the FBI's instructions told The Times.

Those developers also have been told to provide information on any contributions they have made to Huizar's reelection bid, his officeholder committee, any legal defense fund or his alma mater, Bishop Mora Salesian High School, the sources said. The subpoenas also seek information on any donations made to two political committees with ties to Huizar -- Community Support PAC and Families for a Better Los Angeles.

Developers in Huizar's district also have been instructed to provide information on any gifts, meals, trips, vacations, flights, event tickets or rounds of golf they have provided to Huizar, his staff or any other council member, the sources said.

Among the information sought in the warrant were records related to trips to Las Vegas and stays at four hotels, including the Palazzo and Caesars Palace. The document does not explain why investigators want them.