Yee was not the initial target of what has been described as a “massive sting operation” launched by the Justice Department centering on Bay Area politics. Instead, he was only ensnared in a bribery probe involving a fake, FBI-created software firm seeking government contracts, which led to the discovery of his other crimes.

Meanwhile, San Francisco District Attorney George Gascon is building off the FBI’s probe with his own prosecutions. In late January, he announced that two former employees with the city’s Human Rights Commission had been arrested for allegedly trying to sell access to Mayor Ed Lee. Nazly Mohajer, a former agency commissioner, and Zula Jones, a former staffer, allegedly took $20,000 from an undercover agent.

Although he met with the undercover agent, Mayor Lee has strenuously denied any role in the alleged bribery and money-laundering. But the fact that Mohajer and Jones were taped discussing how to break the money into smaller amounts to surreptitiously pay off Lee’s 2011 campaign debts has added to the loud whispering campaign that suggests the San Francisco mayor may be the FBI’s — and/or Gascon’s — ultimate target.

The FBI’s initial target was Raymond “Shrimp Boy” Chow, a leader of a San Francisco-based gang that had ties to Chinese business groups and politicians, including Lee. Chow was convicted in January on federal racketeering charges after his defense — claiming to be a reformed ex-criminal turned humanitarian and businessman — fell short.

It is not clear what sort of arrangement that the FBI and Gascon have — whether certain crimes will be prosecuted by the Justice Department and others by the San Francisco DA. But the most intense focus of the past month has been on Gascon’s attempts to keep a file of evidence related to the charges announced in January from being disclosed. He has so far persuaded a federal judge to keep it under wraps, arguing that its disclosure would reveal undercover agents and ruin promising corruption investigations.

“The evidence is a time bomb waiting to explode,” declared city Public Defender Jeff Adachi, who speculated that Lee or a member of San Francisco’s Board of Supervisors might be implicated.

Lee appears to think he’s the target, or a target, of the investigations. According to campaign records, he spent $19,000 of his political funds last year on criminal defense attorneys. This year, he’s used allies to depict Gascon as launching a politically motivated smear effort.

Democratic strategist Nathan Ballard described Gascon as a craven publicity hound in a recent interview with the Los Angeles Times.

“If the DA has the goods on Mayor Lee, he already would have come out with it. There has never been one credibly sourced allegation of pay-to-play being brought forward,” Ballard told the Times.

But Gascon is winning plaudits from San Francisco’s alternative media, which has long seen the city as a hotbed of corruption and phony progressives.

The SF Weekly recently praised the Cuban-American DA for blasting Police Chief Greg Suhr — and Mayor Lee — for allegedly blocking attempts to reduce misconduct within San Francisco police ranks. The department has drawn sharp criticism since the Dec. 2 shooting death of stabbing suspect Mario Woods.

Though police had credible reason to believe Woods was armed and dangerous, cellphone video of him being shot as he walked away from officers has generated raucous protests.

“What do we get out of this? What do our residents get?” he asked before voting against the higher fees. Two others joined him, defeating the measure.

 

The next day, Amezquita’s phone rang with a call from a lobbyist working with Jimmy Sandhu and Sukhbir Singh, the owners of H.P. Tow. She asked him to lunch.

 

It was just the move FBI agents had hoped the men would make. When Amezquita sat down with Singh and the lobbyist at a restaurant days later, he was wired with recording equipment that secretly captured the conversation. Federal agents hid nearby.

 

The August 2013 encounter was the first of several meals, phone calls and tow yard meetings with Singh and Sandhu that Amezquita recorded as an informant for the FBI and which now are at the center of a federal bribery case against the men, court records show. Since their arrest and an initial court appearance in October 2015, Singh, 39, and Sandhu, 37, have been free on bond and have not been formally indicted by a grand jury on criminal charges.

This continues the trend first launched with the Times’ 2010 discovery that Bell was being looted by its top officials. This led to investigations of neighboring cities in southeast Los Angeles County with similar characteristics — low-turnout elections, apathetic electorates, few civic watchdogs, and cliques of elected leaders and department heads working behind the scenes to enrich themselves.

Dishonor list includes Cudahy, Vernon, South Gate, Lynwood

Southern California Public Radio looked at this phenomenon in 2014:

The indictments of state Sen. Ron Calderon, D-Montebello, and his brother Tom Calderon are just the latest in a string of bribery, money laundering and corruption cases to hit the area bordered by the 110 and 710 freeways to the west and east, and by the 10 and 105 freeways to the north and south. …

 

Cudahy: Three former city officials – Osvaldo Conde, David Silva and Angel Perales – pleaded guilty in a federal extortion and bribery case. They admitted to accepting $17,000 in bribes from an FBI informant who purportedly wanted to open a medical marijuana clinic in town. Documents in that case outlined rampant corruption in Cudahy. Conde was sentenced to three years in prison. Silva was given one year in prison. Perales was placed on five years’ probation.

 

Vernon: The city’s mayor, Leonis Malburg, and his wife Dominica were charged with voter fraud and conspiracy in 2006. They were found guilty in 2009; Leonis was given five years’ probation and ordered to pay $579,000 in fines and restitution, while Dominica was placed on three years’ probation and ordered to pay nearly $40,000.

 

South Gate: Over the years, Al Robles served as a South Gate councilman, mayor, treasurer and deputy city manager. He went on to be a member of the Central Basin Municipal Water District. In 2005, he was convicted of corruption and sentenced to 10 years in federal prison. In 2013, a federal appeals court threw out Robles’ convictions on public corruption and money laundering. The bribery counts remained; Robles is scheduled to be released from prison in 2015.

 

Lynwood: Two former city councilmen were convicted of misappropriating funds. Prosecutors say they received stipends for sitting on city commissions that didn’t do any work. Louis Byrd was sentenced to five years in state prison while Fernando Pedroza was given four. Politicians also used city-issued credit cards for concerts, golf tickets and sexual favors at a Mexican strip club.

Towing company profited off undocumented immigrants

An interesting aspect of the Times’ story about the Huntington Park scandal was that it showed the towing company targeted undocumented immigrants with its excessive fees — and were bitter about efforts to protect these individuals:

For decades, H.P. Tow, registered officially as H.P. Automotive and Tow Service Inc., has contracted with Huntington Park, city officials said.  …

 

Such city contracts traditionally have been coveted by tow companies as they often provide a steady flow of business and allow tow companies to charge the city and car owners an array of fees, including the daily storage fees while owners try to get their vehicles released from police custody.

 

In recent years, however, tow operators have been squeezed by local and state laws that restrict when police can impound cars driven by unlicensed drivers. The new regulations, which were enacted primarily to ease hardships experienced by immigrants living in the country illegally, have undercut significantly the number of vehicles impounded by police.

Now, however, the agency is becoming notorious for another problem: chronic corruption. This is from an Aug. 11 AP report:

As many as 100 commercial truck drivers paid up to $5,000 each to bribe state Department of Motor Vehicles employees for illegal California licenses, federal authorities said Tuesday.

 

Up to 23 traffic accidents could be related to the fraud, officials said, though there were no fatalities.

 

Emma Klem, a 45-year-old Salinas DMV employee, and trucking school owner Kulwinder Dosanjh Singh, 58, of Turlock, both pleaded guilty Tuesday to conspiracy to commit bribery and identity fraud, U.S. Attorney Benjamin Wagner said.

 

Two other DMV employees in Salinas and Sacramento and two other Central Valley trucking school operators have been arrested on similar charges.

 

Court records say the employees changed computer records to falsely show that drivers had passed written and behind-the-wheel tests after they were bribed by the owners of three truck-driving schools between June 2011 and March 2015. …

 

The DMV revoked or cancelled 602 commercial licenses that could be linked to the fraud, including the 100 that were pinpointed by investigators, said Frank Alvarez, the DMV’s chief investigator.

Bribery cases concentrated in San Diego County

This is only one of several recent cases. This is from a June Union-Tribune report:

SAN DIEGO — A California Highway Patrol officer is the second person to be charged in connection with a DMV bribery scandal.

 

Carlos Ravelo is accused of illegally transferring a temporary driver’s license to a driver, once in September 2013 and again in January 2014, according to an indictment unsealed in San Diego federal court last month.

 

Ravelo is a 13-year veteran officer and works at the CHP’s El Cajon station.

In March, a Westminster DMV employee was arrested and charged with two counts related to taking bribes to provide driver’s licenses.

The Los Angeles Times also notes other cases in San Diego County:

In February, a San Diego DMV official pleaded guilty to accepting bribes for setting aside license suspensions and providing unauthorized temporary licenses to drivers who had lost theirs after being arrested on DUI charges.

 

Last year, five employees of the DMV’s El Cajon and Rancho San Diego offices were convicted in connection with a bribery scam in which licenses were improperly provided to clients of a local driving school.

Low starting pay may be driving scandals

These are in addition to 21 FBI arrests related to bribery at the same two offices in May 2012. This is from the FBI’s press release:

United States Attorney Laura E. Duffy announced today that employees at the California Department of Motor Vehicles in San Diego County were charged in a criminal complaint for their involvement in a long-running bribery conspiracy that resulted in the production of hundreds of fraudulent driver licenses for applicants who had failed — or not taken — the required driver license tests.

 

The complaint alleges that DMV officials at the El Cajon DMV office … and the Rancho San Diego DMV office … falsely entered both “passing” written and “passing” driving test scores for applicants in exchange for bribes ranging up to $3,000 per license.

 

In addition to the DMV employees, 16 other defendants were charged in the complaint. … According to court documents, the corruption scheme involved the fraudulent production of both Class C (regular) and Commercial Class A driver licenses. Hundreds of applicants paid recruiters approximately $400- $500 for each fraudulent Class C license … .

Considering that the starting pay of a “business service assistant” at DMV can be as low as $29,940 a year, this may be behind clerks deciding to augment their income illegally.

State Sen. Ron Calderon and his brother Thomas, a former assemblyman, were indicted late Thursday in a massive bribery and insurance fraud case that could send them to prison for the rest of their lives.

A 24-count criminal complaint made public Friday revealed that Ron Calderon, D-Montebello, solicited and accepted approximately $30,000 in cash bribes to push through legislation that helped a hospital owner who was engaged in workers compensation insurance fraud. Another $70,000 was solicited from undercover FBI agents posing as movie executives to create legislation to benefit the movie industry.

The crimes occurred between 2010 and 2013 and also involved Michael D. Drobot, former owner of the now-defunct Pacific Hospital in Long Beach, who was charged with submitting inflated insurance claims and paying the bribes to curtail legislation aimed at stopping such behavior.

“Sen. Calderon is accused of accepting tens of thousands of dollars in bribes and using the powers of his elected office to enrich himself and his brother Tom, rather than for the benefit of the public he was sworn to serve,” U.S. Attorney Andre Birotte Jr. said in a statement.

The Calderon brothers were notified of the charges through their attorneys on Friday. Thomas appeared in court at the end of the day and pleaded not guilty. He was released on a $25,000 bond and ordered to stand trial on April 15. Ron is scheduled to turn himself in on Monday. If convicted of all 24 counts, Ron faces a maximum prison sentence of 396 years in prison.

Laundering allegedly done via nonprofit group

Thomas, who is charged with seven counts of money laundering, could receive a maximum of 160 years. The indictment said he conspired with Ron to launder the bribery funds through a nonprofit that the brothers controlled called Californians for Diversity. Funds were then diverted from the nonprofit to either Thomas Calderon’s personal bank account or his consulting business, The Calderon Group.

Last April, FBI agents had tapped telephone lines and recorded the pair discussing the money laundering. On one occasion, Ron told Thomas that he had “closed the deal” with the movie executive who had agreed to send “future bribe payments through defendant Thomas M. Calderon’s company,” the indictment said.

The federal investigation was no secret to Ron Calderon, who learned about it on May 4, 2013. On that date, he flew to Las Vegas to meet with the purported owner of an independent film studio he had allegedly been receiving bribes from as payment for introducing legislation granting tax breaks for low-budget filmmakers. A ruse was set up to receive the funds: Calderon’s daughter had a job with the studio and began receiving a series of payments even though she did no work.

True to his word, Calderon introduced legislation lowering the threshold for a filmmaker’s tax break from $1 million to $750,000.

But Calderon’s plans went awry when he arrived at the Bellagio resort and discovered that the filmmaker and an assistant were actually undercover FBI agents from the Public Corruption Squad who disclosed that he had been under investigation “for quite some time,” a U.S. Attorney’s Office court document said.

Calderon was not arrested and told that he could leave the meeting or cooperate with the investigation. He chose the latter and spoke to the agents for three hours, implicating other senators in his discussion. Then he agreed to another meeting the following day and on four other occasions within the next week.

Calderon agreed to roll over — but not on his family

“Calderon made it clear from his first meeting with the FBI agents that he was willing to wear a wire and record his conversations with other public officials,” the court document said. “The only people Calderon said he was not willing to record were his family members.”

Calderon actually did record two conversations with an unnamed person who has not been charged. He then stopped communicating with agents, so on June 4, 2013, a search warrant was served on his Capitol offices, an event that was covered by the media.

Pacific Hospital was the go-to place for spinal surgeries and several thousand were performed between 2008 and April 2013. During this time, Drobot owned the hospital and he gave doctors kickbacks of $15,000 for performing such surgeries at his hospital and utilizing implantable devices supplied by a company that he owned. That company, International Implants, overcharged the hospital by at least double and the hospital would submit the bills to insurance carriers through the mail – also creating mail fraud, the indictment said.

Beginning in January 2010, the California Senate and the Division of Workers’ Compensation decided to revamp the billing procedures to curtail excessive spending and fraud. Rather than letting hospitals bill separately for hardware, the amount was to be folded into the total cost of the surgery which had a set fee schedule.

Allegedly fought to preserve hospital scam

Calderon met with two other senators and emailed a third in order to quell this overhaul. He also arranged to have his son work at International Implants as a file clerk during the summers of 2010, 2011 and 2012. The younger Calderon was paid a total of $30,000 – money that went toward his college tuition — even though he only worked 15 days per summer. Then he filed tax returns showing a write-off of most of the money, the indictment said.

Drobot also showered Calderon with other gifts like vacations with usage of a private jet, rounds of golf at high-end resorts and meals at pricey restaurants. None of this was disclosed on Calderon’s conflict of interest forms, the indictment said.

Eventually this was for naught, because the law overhauling the medical hardware passed in January 2013. By that time, Drobot had billed insurance companies approximately $500,000 for spinal surgeries and had paid upwards of $50 million in kickbacks to doctors. Other professionals such as chiropractors and marketers would receive kickbacks as well for their referrals for other types of surgeries. The kickback amount was just folded into the contract for services.

“In some cases, the patients lived dozens or hundreds of miles from Pacific Hospital and closer to other qualified medical facilities,” Drobot’s plea agreement said.

When he is sentenced, Drobot faces a maximum of 10 years in prison, an order of restitution and a fine that could equal twice victims’ loss.