ARB throws couple in jail

JULY 15, 2010

By ANTHONY PIGNATARO

For Kening Ma of Ontario, bail was set at $150 million. His wife Shirley Ji got a slightly better deal – a mere $75 million. These are, to say the least, extraordinary figures. The previous highest bail on record appears to be the $100 million set in the indictment of Raj Rajaratnam, who was arrested last year in New York for allegedly masterminding a $20 million insider-trading scheme.

“I’ve never seen bail set that high, and I’m a bail bondsman by trade,” Assemblyman Curt Hagman, R-Chino Hills, said. “I’ve been in the business 25 years, and the highest bail I’ve ever seen is $10 million.”

In any case, the 70-count indictment of Ma and Ji – president and vice president, respectively, of Ontario-based Goldenvale, Inc. – is the culmination of a five-year felony criminal investigation. The San Bernardino District Attorney’s office executed the indictment on March 4 of this year. San Bernardino County Sheriff’s deputies arrested the couple six days later.

Given the bail amounts and the size of the indictment, you’d think Ma and Ji – both of which are U.S. citizens, having moved here from China a decade ago – were being charged with international terrorism or corporate skullduggery on an epic scale. In fact, they’re charged with violating California Air Resources Board regulations – specifically, they’re accused of importing motorcycles and ATVs equipped with engines that fail to  meet state emissions control laws and then selling them. The indictment lists one count of conspiracy, 33 counts of grand theft (the selling of the ATVs and such, for a total of $27,000), six counts of money laundering (to the tune of $440,000) and 30 counts of “possession of a false certificate” (in this case, smog certificates).

On April 28, Ma cut a deal with prosecutors and agreed to plead no contest to four counts of felony grand theft and pay restitution to victims (customers who bought the company’s vehicles) while Ji plead guilty to two counts – one of grand theft and another of conspiracy to commit grand theft. Their sentencing occurs on July 20, though a civil action remains ongoing.

“The felony pleas, sentencing and the amount of time in custody are very significant for a case which had its beginnings in an investigation over air quality issues,” San Bernardino County Deputy District Attorney Doug Poston said in this statement (Poston didn’t respond to several phone calls requesting more information on the case and bail amounts; ARB officials refused to comment on the ongoing civil action against Ma and Ji).

The Air Resources Board and Goldenvale go way back, according to ARB Enforcement Investigator Michelle Shultz-Wood. “We had a settlement previously with this company in 2005,” she said.

On Aug. 31, 2005, Goldenvale signed a settlement agreement with ARB concerning 320 alleged violations California Health and Safety Code section 43106 (all new motor vehicles must meet state emissions standards) and section 43150 (dealers must only sell vehicles meeting the state’s emissions standards). The company agreed to pay $39,034 in penalties and promised to stop their air quality regulation violations.

But Shultz-Wood said the violations continued, which ARB investigators discovered not long after the settlement agreement was finalized. In response, she said they contacted the San Bernardino County District Attorney, who promptly took over the case. It’s a practice ARB has apparently been doing for some time, and intends to continue in the future.

“When we refer a case to the District Attorney, the case becomes theirs,” Shultz-Wood said. “They are the lead and we just give support,” which she defined as air quality law expertise and assistance in carrying out investigations.

In 2002, Shultz-Wood was involved with a case against National Car Rental that ARB handed off to the Los Angeles District Attorney and eventually led to a $60,000 settlement. “National Car Rental, Inc. repeated rented or offered for rent, non-California certified vehicles within the state,” says page 24 of this report on ARB’s 2002 enforcement activities. “An investigation by ARB staff revealed that on multiple occasions, 49-state vehicles that had been rented in other states and dropped off in California, were repeatedly rented in state prior to being sent to out-of-state destinations.”

ARB has also teamed up with the state Attorney General’s office to prosecute air quality regulation violations. In June 2007 Anderson-based Sierra Pacific Industries, a logging company and “California’s largest private landowner” agreed to a $13 million settlement in a case involving alleged “numerous violations of their air pollution control permits” at various sawmills statewide, according to this ARB statement. That case involved ARB, the Placer County Air Pollution Control District and the AG’s office.

“It’s very normal for us to work with district attorneys and the Attorney General in our cases,” Shultz-Wood said.

Others, like Assemblyman Hagman, don’t think “normal” is quite the right word.

“Businesses are scared to death,” Hagman said. “It’s one thing to get fined [for air quality regulation violations], but getting thrown in jail? We’re not going to be encouraging a lot of businesses if they do this. There are other things they can do.”