More scams discovered in the City of Bell!

Bell's Rizzo gave $400,000 in city loans to two businesses without council approval

One of the loans, $300,000 given to a local Chevrolet dealer in 2008, is the subject of a court fight because the dealer went out of business within a year of getting the loan, having repaid nothing.

By Jeff Gottlieb, Richard Winton and Ruben Vives, Los Angeles Times, September 1, 2010

Then- Bell City Manager Robert Rizzo gave city loans of nearly $400,000 to two businesses without public discussion, approval from the City Council or collateral to back the loans, according to documents reviewed by The Times.

One of the loans, $300,000 given to a local Chevrolet dealer in 2008, is the subject of a court fight because the dealer went out of business within a year of receiving the loan, having repaid nothing.

Although other cities sometimes lend money to local businesses for economic development, Rizzo granted the loans in a highly unusual way, with no statement of economic benefit to the city — a step that is commonplace in municipal loans.

The second loan was given to the Steelworkers Old Timers Foundation in 2005, a senior citizens group run by George Cole, who was on the Bell City Council then. It is unclear whether the $72,000 loan was repaid. After saying that he would discuss the loan, Cole did not return calls seeking comment.

Several experts said the secret loans violated basic tenets of municipal government and appeared to violate Bell's charter, which requires that all contracts be approved by the City Council.

"This is a complete breakdown of checks and balances," said veteran municipal lawyer Michael G. Colantuano. "It's plainly illegal."

The loan to the Chevrolet dealership marked the second time its owner, Randy C. Sopp, had received money from Bell. The city granted Sopp a $500,000 loan when he moved his dealership into Bell in 1990, according to court records. It is unclear whether Sopp paid any of that loan back. In 2006, the city agreed to "forgive the outstanding loan," the court documents show, and the dealership said it would try to stay in Bell.

The loans offer new evidence of the sway Rizzo held over the small, working-class city. Rizzo stepped down this summer following 17 years as Bell's city manager after The Times revealed that he was making an annual salary of $787,637, a figure that rose to more than $1.5 million when additional benefits were included.

The Times has previously reported that Bell gave employees and two councilmen loans totaling nearly $1.5 million, a program that public finance experts said was unheard of. City officials have not found evidence that the council approved the loans. That loan program also appears to have been run by Rizzo, who himself received $160,000 in loans.

James Spertus, Rizzo's attorney, said his client was authorized to make loans under a resolution the council passed in early 2006 that allowed Rizzo "to manage the affairs of the city without council approval."

Jamie Casso, Bell's interim city attorney, said that he could find no such resolution in the city's records and that giving the city administrator such sweeping powers would have violated the City Charter.

Some cities, he said, pass ordinances that allow the city manager to sign off on routine expenses, "but a loan of almost any kind to almost anyone of city money is so extraordinary that I can't understand why it was not taken to the council."

Sopp's attorneys either declined comment or did not return calls. Sopp did not return calls nor respond to a message left at his Palos Verdes Estates home.

A review by The Times found no mention in council or redevelopment agency minutes or agendas of the May 2008 loan to Sopp.

Council members Teresa Jacobo and George Mirabel and then-council member Cole said in interviews that they didn't remember approving the loan to Sopp.

Records show that when the loan was due for repayment, Rizzo extended it for seven months without going to the council or informing the public.

Shortly before Rizzo stepped down, the city negotiated a settlement with Sopp that would have ended the lawsuit over the loan. Details of the settlement were not disclosed. But Bell's new city management team put the settlement on hold, saying that they had questions about the loan.

"I haven't seen anything that indicates the council voted on this transaction or on the settlement that involves this transaction," Casso said. "My client would have to approve it in open session. That hasn't happened."

Giving a loan to a car dealer is not unusual for cities, particularly during the recession. Both Victorville and Norco, for example, have approved aid to dealers in recent years.

The deal between Bell and Sopp Chevrolet was quite different, though: There was no public notice or discussion; Bell gave the loan not to a business or corporation but directly to Sopp, identified in loan documents as "business owner"; the dealership is not mentioned in the two-page promissory note that was signed May 28, 2008; and the loan was extended until June 30, 2009.

The loan documents did not give the city the right to look at the dealership's financial records, and a document attached to the loan shows that its sales tax revenues had dropped 20% in the last year.

According to the lawsuit Bell later filed against Sopp, the loan was provided after Sopp approached Rizzo, telling him the dealership was in jeopardy of failing.

Little is known about the loan to the Steelworkers Old Timers Foundation. Documents don't explain the reason for the loan or why it would be in the city's interest.

In addition to the loan, Bell also gave a city contract worth $38,000 a month to the group to provide Dial-A-Ride services for senior citizens. Cole said last month that the group has held the Dial-A-Ride contract for 15 years and considered the price the city was paying to be fair.

The documents say the loan, which had 4% interest, would be repaid by the city reducing its monthly payment for the Dial-A-Ride service.

Casso said he has been unable to find council approval of the Old Timers Foundation loan in a preliminary look through Bell's files. Times reporters also reviewed agendas and minutes and were unable to find any public notice of the loan.

Casso also said he's found no analysis by the city of potential conflicts of interest given Cole's dual roles as head of the foundation and a City Council member.

"We believe there should have been," he said.

jeff.gottlieb@latimes.com

richard.winton@latimes.com

ruben.vives@latimes.com

Copyright © 2010, Los Angeles Times

Even the School Principal is scamming LA taxpayers

L.A. Unified moves to close charter school over alleged misuse of $2.7 million

An audit finds that the founding principal at NEW Academy Canoga Park allegedly misused or misappropriated money, depositing funds into an Ameritrade account and claiming payments to a nonexistent company.

By Howard Blume, Los Angeles Times

August 31, 2010

Los Angeles schools Supt. Ramon C. Cortines has moved to shut down a San Fernando Valley charter school over the alleged theft or misuse of as much as $2.7 million by the school's founding principal.

The problems at NEW Academy Canoga Park turned up in an audit released Monday by the inspector general's office of the Los Angeles Unified School District.

More than "$2 million of misappropriated and unaccounted public funds is egregious," Cortines wrote in a letter to the board of the school. "Students have been inexcusably deprived of funds that were designated solely to further their education."

As a charter school, NEW Academy is governed by its own board of directors, independent of L.A. Unified, which authorized the school. Los Angeles has more charters, public schools that are independently run, than any school district in the nation.

Virtually no local charter schools have been forcibly shut down by the district, although several have closed after officials failed to renew an expiring charter agreement, which typically lasts three to five years.

The elementary school of about 500 students faces a charter revocation hearing. The chairwoman of the school's board contends that NEW Academy should survive because students are thriving.

Although the school's scores are still in the lowest 30% of schools statewide, according to last year's data, its students' gains on standardized tests have been among the region's strongest each of the last three years.

"It is clear that our school has been a victim of fraud," board chair Maggie Cervantes said in a statement. "The school is taking aggressive and necessary steps to recover its assets and work to successfully resolve this issue. These steps have included terminating the employment of the former principal of the school."

The former principal, Edward Fiszer, could not be reached for comment. Although not identified by name in the published audit, Fiszer was the target of the inquiry, officials confirmed.

NEW Academy Canoga Park opened in 2005 as an unusual example of public-private collaboration using school bonds and other funding sources to combine a new school with low-income housing.

The school's visible face, Fiszer, the author of three education and motivational books, was once honored as a "Champion of Children" in a City Hall ceremony.

Among the auditors' findings is that Fiszer allegedly withdrew cashier's checks totaling nearly $1.1 million from school accounts between July 1, 2007, and Sept. 30, 2009.

"The former principal claimed that funds deposited into his personal Ameritrade account were not withdrawn, but were deposited and repeatedly lost," the auditors wrote, apparently as a result of unsuccessful investments.

One cost questioned by auditors was $62,247 paid to a company called Burgundy Bunny for science enrichment for fourth- and fifth-graders over a six-week period. "We performed an Internet search to verify the validity of the vendor," auditors wrote. "We noted that the address and phone number were invalid. The address shows as a vacant lot. In addition, the business entity name does not exist."

Auditors also allege that the principal paid a former teacher — who at some point married the principal — $129,450 for services as a grant writer, although a company was already being paid for grant writing.

The audit included a harsh assessment of the oversight by the charter's governing board and the outside company that provided accounting services.

Handling the audit became complicated because the school system's interim inspector general is a member of the board of directors of the charter's founding organization. Jess Womack is board secretary of New Economics for Women, whose acronym, NEW, is part of the school's name. Womack, a retired L.A. Unified attorney, recently rejoined the school system as inspector general. Womack recused himself from dealing with this audit, district officials confirmed.

The charter has a board of directors separate from New Economics, but there's overlap: Cervantes is executive director of New Economics and Loyola Marymount University Assistant Dean Marta Sanchez serves on both boards. A second NEW Academy operates near downtown.

The Los Angeles County district attorney's office said it hasn't yet received the audit for review for potential prosecution.

The school becomes the second San Fernando Valley charter school facing allegations of impropriety. The founders of Ivy Academia face felony charges related to co-mingling private and public accounts. They have denied wrongdoing.

howard.blume@latimes.com

Copyright © 2010, Los Angeles Times

More Guns on Crenshaw Blvd. than you want!

Arms Merchants of South Central


Did the rich and intrigue-filled Botach family get a pass from Henry Waxman?

By Penn Bullock Thursday, Aug 5 2010

LA Weekly

The Botach family of Los Angeles is among the more unusual of the very rich. Yoav Botach is a wealthy landlord. He founded, and his son now owns, an arms dealership in an unsettling locale for one: South Central. And his grandson was convicted of conspiracy for peddling to the U.S. Army decomposing ammunition — so old that it was traced to the factories of Mao Tse-tung — as part of a $300 million contract to arm the Afghan government.


But what is also startling in the weird saga of this prominent L.A. family is the silence of Congressman Henry Waxman of Beverly Hills, who led a congressional investigation into the ammo fraud and vowed to get to the bottom of it.


As Waxman said, his inquiry in 2008 aimed to answer a fundamental question: How did Botach's inexperienced 21-year-old grandson Efraim Diveroli "get a sensitive, $300 million contract to supply ammunition to Afghan forces?"


Two years later, Waxman refuses to speak about it with L.A. Weekly. But with an ugly palimony suit simmering in L.A. between family patriarch Botach and his common-law wife, Judith Boteach, she's now talking. And she points to a contract that may link the South Central arms firm run by Botach's son, Bar-Kochba Botach, to the grandson's disgraced firm, AEY Inc., in Miami Beach.


Yoav and Bar-Kochba Botach refused to comment on Boteach's allegations when contacted by the Weekly. (Boteach explains to the Weekly that she spells her last name differently because Botach changed his name for simplicity.)


According to Boteach, Diveroli, her step-grandson, who is awaiting sentencing from Judge Joan A. Lenard in U.S. District Court in Miami after hawking the Mao-era material, spent summers as a teen doing odd jobs at Botach Tactical, the firm in South Central. She says a 2004 federal contract granted to Botach Tactical implies another connection: On the contract, the Botach firm lists its address as young Diveroli's AEY address — in Miami Beach.


Botach Tactical sells arms to U.S. police and military forces, as its Web site advertises. Last year, among other revenue, it took in just less than $6 million in federal defense contracts, according to USASpending.gov.


A profile of the company discovered by blogger Lindsay Beyerstein and cited on Fedvendor.com — a Web site for companies interested in contracting with the government — lists Botach Tactical's physical address as 3423 West 43rd Place in South Central L.A. But the profile identified its mailing address as 925 41st Street, Suite 306, Miami Beach — again, the mailing address for Diveroli's fraud-mired AEY Inc.


Waxman's silence on Diveroli's fleecing of the Army comes as the palimony case between Boteach and Botach plays out, from Los Angeles to Israel.


In March 2006, the State of Israel accused Botach's brother and business partner in L.A., Shlomo Botach, of "using professional money launderers" to transfer $860,000 from the U.S. through Swiss and Uruguayan banks to an account in Israel, code-named "Ezra 26." The court case covered transfers totaling $331,000.


In court documents translated from Hebrew for the Weekly, Shlomo stated he was moving the money to Israel so that Judith Boteach couldn't access it during the palimony dispute.


But the State of Israel alleged that the money was wired in small batches so that it could be slipped past authorities.


Though the documents show that Shlomo claimed he was acting on Botach's behalf, Botach is not accused of any wrongdoing.


Nevertheless, the documents shed light on how the broader business is conducted: "Yoav is the one that handles the financial end of the partnership," Shlomo states in the documents, insisting he would "not question the head of the family [Yoav] with regards to the financial decisions he makes."


It may be that L.A. politicians worry about their relationships with wealthy arms merchants and landowners. In 2006, the L.A. Daily News reported that Botach co-owns the South Central arms firm — and 144 commercial properties across L.A.


"Some are restaurants, garages, buildings where they manufacture clothes," Boteach says. "A lot of them are small businesses, and some are apartment buildings."


She says that Botach lives in Waxman's 30th Congressional District, and that her estranged husband wields influence with politicians. "[Yoav] supports a lot of the City Council members and the governor. There were special lunches, dinners and fund-raisers."


The connections could be seen last year, when Mayor Antonio Villaraigosa and City Council President Eric Garcetti attended the Beverly Hills launch of the star-studded charity Turn Friday Night Into Family Night, founded by Rabbi Shmuley Boteach, the former spiritual adviser to Michael Jackson.


Shmuley is Botach's son, Judith Boteach's stepson, and Diveroli's uncle. A video of Villaraigosa touting Turn Friday Night Into Family Night is featured on its Web site.


Judith Boteach tells the Weekly that life with Botach was a "total nightmare," even as he hosted world leaders, including former Israeli Prime Minister Ariel Sharon.


After Botach's 2002 split from Boteach, a former Hollywood makeup artist, she claimed she was unaware they had never been legally married. Botach's lawyers insisted Boteach knew they were not married.


In August 2009, L.A. Superior Court Judge Warren Ettinger upheld her claims of assault, battery, emotional distress and unpaid work, and awarded her $250,000 plus legal costs, but rejected her palimony claim.


Her attorney, Robert W. Hirsh, declared to the Daily News in 2006: "We would not be surprised if [Botach's] net worth is $700 million." Yet Botach is appealing to force her to cover his legal bills. Hirsh calls the appeal frivolous and says, "We are now taking steps to enforce the judgment."


Not everyone is buying brother Shlomo Botach's explanation for why he was moving money to Israel. In 2006, Jaffa District Court Judge Kobi Vardi in Tel Aviv called his stated reason — that he was keeping it out of Boteach's hands — an "unacceptable fabrication."


Vardi said Shlomo Botach was part of a "sophisticated and well-lubricated organization" that intended to launder money.


Shlomo argued, "They didn't intend to hire shady characters for the purpose of transferring funds to Israel ... as it is 'clean,' legitimate money derived from their business in the USA." But in May 2006, the Israeli judge ordered that half of the cash be confiscated.


The Botach family soon took another blow: Diveroli emerged as the owner of an arms firm, AEY Inc., in Miami Beach, which appeared on a U.S. Department of State watch list for contract fraud and violation of the Arms Export Control Act.


Despite this, the tiny firm was awarded the $300 million U.S. Army defense contract that made it the main supplier of ammo to the Afghan government.


The Waxman-led congressional investigation later found that AEY had previously been caught selling the military "junk." The fact that young Diveroli subsequently won a key Army contract involving Afghanistan was "a case study in a dysfunctional [federal] contracting process," investigators found.


According to The New York Times, Diveroli purchased some ammo in Albania. It was marked for destruction by NATO, manufactured by Mao Tse-tung and found in moldy crates marked "Made in China," U.S. inspectors found. He and three employees were indicted on numerous counts of fraud and conspiracy.


Incredibly, while awaiting trial, Diveroli completed two more U.S. defense contracts for about $10 million, according to Glenn Furbish, a federal official.


Diveroli was found guilty in August 2009 of one count of conspiracy. Diveroli referred questions to his lawyer, who did not respond to the Weekly's e-mailed inquiry.


Bar-Kochba Botach, the current owner of Botach Tactical, complained to The New York Times that Diveroli, after working for him as a teenager, "just left me and took my customer base."


The Weekly asked him about documents in which Botach Tactical's address matches that of Diveroli's firm in Miami. "No comment," he says.


Boteach sums up Waxman's failure to figure out how her step-grandson defrauded a sophisticated power like the federal government: "He was a kid. He was a kid!" she says.



"Can anyone tell me how and why Botach Tactical has three buildings in Leimert Park dedicated to worldwide arms dealing? A recently acquired and converted wig shop has been converted into the retail outlet for supplies to local police. A second building was the former location of the retail outlet and is in transition as to function. The third structure is the old "Total Experience" night club on Crenshaw Blvd. identified by a colorful mural against the gray paint of the bldg. This is the warehouse for the operation."


"This function is clearly not consistent with zoning and Crenshaw Corridor Specific Plan stipulations but the Botach's have seemingly been able to acquire zoning exemptions, grandfathering in of inconsistent uses along the way. Local politicians seem adverse to efforts to rectify this abomination of planning and land use standards and practices."

Botach Links:
http://www.botachtactical.com/
http://www.botachdefense.com/
http://www.botachdefense.com/v/vspfiles/forms/credit%20application.pdf

Afghan Gun Runner from LA

Miami Arms Dealer Dude Had

Complex Web of Business Dealings

Ryan J. Reilly
August 27, 2010

The world headquarters of Pinnacle Minerals Corporation and AEY Inc.

In their newest case against already-convicted 20-something Miami arms dealer Efraim Diveroli, the feds accused him this week of using a front company to hide his continuing involvement in the arms trade. But a closer look at Diveroli's recent dealings suggest that, even as he was awaiting sentencing on his initial conviction for selling the U.S. government poor-quality and illegal munitions for use in Afghanistan, Diveroli engaged in a series of transactions designed to obscure his involvement in companies involved in the arms business.

AEY, Inc., the business that Diveroli used a few years back to sell the U.S. Army out-of-date Eastern European munitions, is still around and is run out of Diveroli's upscale home in Miami Beach.

A second company named in the charges is also headquartered at Diveroli's home address: Pinnacle Minerals Corporation is a "mining company," according to the charges, which was created in September 2008. Diveroli was the company's registered agent until March, when the company changed its registered agent to lawyer Marko Cerenko of Miami Beach, according to the company's corporate filings in Florida. Cerenko, shown here aboard a boat, previously served as an attorney at AEY, Inc., according to his LinkedIn profile. The former Duke Tennis player and University of Miami School of Law grad did not return multiple phone calls from TPMMuckraker on his cell phone or at his law firm, Hogan Greer & Shapiro.

The feds allege they have Diveroli on tape talking to a federal agent about his involvement in Pinnacle. Diveroli allegedly told the feds that "Aaron Monahan," one of the individuals also mentioned in the charges, is an employee of Pinnacle, who along with "Jake" served as the point of contact for the ammunition deal with Advanced Munitions.

According to what Diveroli allegedly told the feds, his partner at Pinnacle owns Advanced Munitions, another company that figures prominently in the charges. That appears to be a reference to Diveroli pal Dejan Djuric, who is president, vice president and secretary of Pinnacle, according to Florida corporation records.

Identified only by his initials, "D.D." in the court filings against Diveroli, Djuric plays a prominent role in the latest charges. Djuric allegedly set up a new company late last month called Advanced Munitions Distribution, Inc. Djuric is also listed as president of that company, according to Florida corporation records. Diveroli himself is not listed in the public filings of the corporation, but the feds allege that Advanced Munitions Distribution is a "front company" designed to conceal Diveroli's arms trading. Diveroli allegedly told an undercover officer of Advanced Munitions that he "finances their inventory" sometimes.

Diveroli allegedly told an undercover ATF officer in early August that Djuric's business, Advanced Munitions, bought another of his companies, AmmoWorks, a week earlier. Diveroli said it wasn't beneficial to Advanced Munitions to have his name associated with it, so he would remain on board as a consultant and would get an exclusive consulting contract, the feds allege.

It's not yet clear if any of Diveroli's associates -- including Djuric or two others referred to in the federal complaint as "Jake" and "Aaron Monahan" -- will be charged in relation to the broader conspiracy revealed in the affidavit, but the feds indicate that there's a larger criminal case at stake.

"More details will be coming out in the future," Steve Cole, spokesman for the U.S. Attorney's office told Florida Today. "Obviously he had some links in Brevard County."

Djuric, who is also listed in Florida corporation records as president of Balkan Export, Inc., hung up when reached by phone by a TPM reporter and did not return a subsequent voicemail message.

As the feds zero back in on Diveroli, a quick refresher on his background that might help explain how a 24-year-old ends up as an arms dealer He took over AEY, Inc., from his father Michael Diveroli around 2004 or 2005 when he was 19 years old. His grandfather, Yoav Botach, is one of the wealthiest property owners in Los Angeles and may have a net worth of up to $700 million. His uncle, Rabbi Shmuley Boteach, is a former spiritual adviser to Michael Jackson, the host of a popular satellite radio program and author of the books The Kosher Sutra and Kosher Sex.

And another uncle, Bar-Kochba Botach, runs a South Central Los Angeles arms firm run called Botach Tactical that a story in L.A. Weekly earlier this month linked to AEY, Inc. through a 2004 federal contract that listed one of Diveroli's AEY addresses in Miami Beach as the mailing address for Botach Tactical.

As a teen, Diveroli spent summers working for Botach Tactical, according to his grandfather's common-law wife, Judith Boteach, who has a palimony suit pending against the family patriarch, told L.A. Weekly.

Cynthia Hawkins, the Orlando lawyer representing Diveroli in the criminal case, did not return TPM's phone

More on The Thieves of Bell City Council

Bell council members were paid thousands for sitting on boards that rarely met


Records show that one panel has not met since early 2005, yet members were paid $1,575 per month.

By Jeff Gottlieb, Richard Winton and Ruben Vives, Los Angeles Times
August 25, 2010


Bell council members earned tens of thousands of dollars over the last four years as members of city commissions that rarely met, records reviewed by The Times show.

Bell's Surplus Property Authority, for example, met once between January 2007 and July 2010, according to city minutes. The Public Finance Authority met only three times during that period. The Housing Authority met four times in 2008. And the Solid Waste and Recycling Authority has not met since January 2005.

The findings add a new twist to the Bell salary scandal, which has sparked several investigations and prompted the resignations of three top city administrators. Until they cut their pay last month amid public outcry, the council members were earning about $97,000 a year, making them among the highest-paid part-time council members in California.

Under Bell's salary system, council members received only a modest sum for attending City Council meetings, $150 a month, and $60 a month for sitting on the Redevelopment Agency. What pushed their income so high was the $1,574.65 monthly they received last year for sitting on each of the other five boards, according to records.

In other cases, the boards met, but only briefly. In recent years, the Bell council routinely held board meetings concurrently with council meetings, a move that former City Manager Robert Rizzo said was made in the name of efficiency but that experts in municipal government say is legally problematic.

Take the meeting of July 31, 2006. The Planning Commission met from 8 p.m to 8:03 p.m. The Redevelopment Agency followed from 8:03 to 8:04, the Surplus Property Authority from 8:05 to 8:06, the Housing Authority from 8:06 to 8:07 and the Public Finance Authority from 8:07 to 8:08.

David Demerjian, head of the Los Angeles County district attorney's Public Integrity Division, said it is illegal for council members to be paid for meetings that don't take place or that last just a few minutes. He said his office is investigating Bell's practices.

"They got paid monthly for being board and commission members," he said. "These other boards and commissions are designed for self-enrichment."

The Times' review of city meeting records showed numerous instances when meetings lasted only a few minutes, with no substantial business discussed. On at least three occasions — June 1, 2009, Feb. 4, 2008, and Jan. 6, 2006 — the redevelopment agency met for a minute, according to the records.

Through the first half of 2010, the Housing Authority, City Council and Redevelopment Agency have each met seven times. During this period, the Surplus Property Authority, Planning Commission and Solid Waste Authority never met.

In 2009, the Redevelopment Agency met 13 times, the Planning Commission three times, and the Housing Authority five times. The finance, surplus property and solid waste commissions never met.

City compensation records show that the council members received payment each month for being members of the five boards. Last year, according to the records, council members received roughly $8,000 a month for the meetings. That monthly sum had been growing in the last few years: They earned $6,833 in 2007 and $7,666 in 2008.

When asked about the meetings, Councilman Luis Artiga said he assumed his pay was just for the City Council.

"In my mind, it was the same meeting. I didn't think we were being paid differently for being on one board or another," Artiga said.

Councilwoman Teresa Jacobo also said she was surprised to hear that she was being paid for being a member of the boards. "We didn't know we were getting paid for those boards," she said.

Other council members did not return calls seeking comment. (For reasons that are unclear, one council member, Lorenzo Velez, received only a fraction of the salary the other four earned.)

Patrick Whitnell, general counsel for the League of California Cities, said he had not heard of another city council running together meetings of the council and boards in the manner of Bell. Other cities have separate agendas for each board, as well as clearly marked minutes.

He said minutes need to reflect which agency is taking action and that someone could challenge actions by asking under which authority they were taken.

"The way you describe is not the way I would advise a client to do it," Whitnell said. "You're asking for trouble to occur, especially when approving bonds or things having to do with redevelopment."

Bell is at the center of several investigations into the pay scandal, which was sparked in June when The Times revealed that Rizzo was earning nearly $800,000 a year (a later story found that he actually earned more than $1.5 million when benefits and other forms of compensation were added).

Bell council members were able to go around state limits on council salaries that were set by law in 2005 by holding a special election later that year.

Fewer than 400 people voted in the election, which made Bell a charter city and thereby exempted it from the salary limits. Council members had promoted the change to voters as a way to give the city more local control.

In the years since that election, council salaries had jumped more than 50%, from $61,192 a year in 2005 to about $97,000 this year, before the controversy forced the council to cut its pay 90%.

State law for "general law" cities, which included Bell before the 2005 special election, limits council pay for a city of Bell's size to $400 a month and limits council pay for sitting on boards and commissions to $150 a month for each board.

jeff.gottlieb@latimes.com
richard.winton@latimes.com
ruben.vives@latimes.com
Copyright © 2010, Los Angeles Times

Blogger beware: Postings can lead to lawsuits


A false sense of Internet security can mean legal quagmires for critics who are careless about facts.


By David G. Savage, Tribune Washington Bureau
August 23, 2010 Reporting from Washington


The Internet has allowed tens of millions of Americans to be published writers. But it also has led to a surge in lawsuits from those who say they were hurt, defamed or threatened by what they read, according to groups that track media lawsuits.


"It was probably inevitable, but we have seen a steady growth in litigation over content on the Internet," said Sandra Baron, executive director of the Media Law Resource Center in New York.


Although bloggers may have a free-speech right to say what they want online, courts have found that they are not protected from being sued for their comments, even if they are posted anonymously.


Some postings have even led to criminal charges.


Hal Turner, a right-wing blogger from New Jersey, faces up to 10 years in prison for posting a comment that three Chicago judges "deserve to be killed" for having rejected a 2nd Amendment challenge to the city's handgun ban in 2009. Turner, who also ran his own Web-based radio show, thought it "was political trash talk," his lawyer said. But this month a jury in Brooklyn, N.Y., convicted him of threatening the lives of the judges on the U.S. 7th Circuit Court of Appeals.

In western Pennsylvania, a judge recently ruled a community website must identify the Internet address of individuals who posted comments calling a township official a "jerk" who put money from the taxpayers in "his pocket." The official also owned a used car dealership, and one commenter called his cars "junk." The official sued for defamation, saying the comments were false and damaged his reputation.


In April, a North Carolina county official won a similar ruling after some anonymous bloggers on a local website called him a slumlord.


"Most people have no idea of the liability they face when they publish something online," said Eric Goldman, who teaches Internet law at Santa Clara University. "A whole new generation can publish now, but they don't understand the legal dangers they could face. People are shocked to learn they can be sued for posting something that says, 'My dentist stinks.' "


Under federal law, websites generally are not liable for comments posted by outsiders. They can, however, be forced to reveal the poster's identity if the post includes false information presented as fact.


Calling someone a "jerk" and a "buffoon" may be safe from a lawsuit because it states an opinion. Saying he wrongly "pocketed" public money could lead to a defamation claim because it asserts something as a fact.


"A lot of people don't know how easy it is to track them down" once a lawsuit is filed, said Sara J. Rose, an American Civil Liberties Union lawyer in Pittsburgh.


The Supreme Court has said that the 1st Amendment's protection for the freedom of speech includes the right to publish "anonymous" pamphlets. But recently, judges have been saying that online speakers do not always have a right to remain anonymous.


Last month, the U.S. 9th Circuit Court of Appeals upheld a Nevada judge's order requiring the disclosure of the identity of three people accused of conducting an "Internet smear campaign via anonymous postings" against Quixtar, the successor to the well-known Amway Corp.


"The right to speak, whether anonymously or otherwise, is not unlimited," wrote Judge Margaret McKeown.


Quixtar had sued, contending the postings were damaging to its business. The judge who first ordered the disclosure said the Internet had "great potential for irresponsible, malicious and harmful communication." Moreover, the "speed and power of Internet technology makes it difficult for the truth to 'catch up to the lie,' " he wrote.


Media law experts say lawsuits over Internet postings are hard to track because many of them arise from local disputes. They rarely result in large verdicts or lengthy appeals to high courts.


Goldman, the Santa Clara professor, describes these cases as the "thin-skinned plaintiff versus the griper." They begin with someone who goes online to complain, perhaps about a restaurant, a contractor, a store, a former boss or a public official. Sometimes, one person's complaint prompts others to vent with even sharper, harsher complaints.


"There's a false sense of safety on the Internet," said Kimberley Isbell, a lawyer for the Citizen Media Law Project at Harvard University. "If you think you can be anonymous, you may not exercise the same judgment" before posting a comment, she said.


Not surprisingly, the target of the online complaints may think he or she has no choice but to take legal action if the comments are false and malicious.


"These can be life-changing lawsuits. They can go on for years and cost enormous amounts in legal fees," Goldman said.


He is particularly concerned about teenagers and what they post online. "Teenagers do what you might expect. They say things they shouldn't say. They do stupid things," he said. "We don't have a legal standard for defamation that excuses kids."


Media law experts repeat the advice that bloggers and e-mailers need to think twice before sending a message.


"The first thing people need to realize, they can be held accountable for what they say online," Baron said. "Before you speak ill of anyone online, you should think hard before pressing the 'send' button."


david.savage@latimes.com
Copyright © 2010, Los Angeles Times

More Elected Official Scams in L A County

Charity run by ex-Bell mayor didn't disclose government contracts, attorney general says


Steelworkers Oldtimers Foundation told the state it got no government funding from June 2006 to June 2009. But records from Bell, Norwalk, Fontana and Huntington Park show $2.6 million in payments.



By Patrick McGreevy, Los Angeles Times



August 21, 2010



Reporting from Sacramento

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As the city of Bell and surrounding municipalities poured millions of dollars into contracts with a charity run by the former mayor, the organization filed sworn reports with the state that it was receiving no such money, according to records reviewed by The Times.



Officers of the organization including George Cole, the former mayor, signed statements under penalty of perjury that the Steelworkers Oldtimers Foundation did not receive any government funding during the three-year period ending June 30, 2009.



But records from Bell, Norwalk, Fontana, Huntington Park and other localities show contracts with the foundation during that period to provide services to senior citizens. Contracts and other records produced by the cities show that they paid the foundation at least $2.6 million combined during the time in question.



The state attorney general's office, which is investigating Bell's finances, has ordered the foundation to immediately disclose which government agencies have directed money its way.



The group "incorrectly answered" the question on the disclosure forms about whether the foundation received government funds, according to an Aug. 10 letter to the foundation from Tony Salazar, an analyst for the attorney general's Registry of Charitable Trusts.



A spokesman for the attorney general, Jim Finefrock, said that "to the extent there are government contracts, we're going to pay attention to that."



The foundation's filings with the state for at least six years say that it had not received government funding, but Finefrock said the attorney general's office is going back only three years because that is "standard practice."



The foundation's chief financial officer, Kim Kreft, said she had not seen the attorney general's letter, but any omission of information on disclosure reports would have been unintentional, "a mistake."



She noted that the organization did disclose receipt of $19.6 million in "government contributions" during the last three years in federal documents, which were provided to the state. The group did not, however, identify the cities and other government agencies that bankrolled it, another state requirement.



That information is important for regulators and the community at large in evaluating the foundation's operations, including determining whether conflicts of interest are present, said Ken Berger, president of Charity Navigator, an online service that reviews nonprofits.



"This information is something the public should know," Berger said.



The attorney general's office sent its letter to the foundation two weeks after a leader of a Bell citizens watchdog group confronted Atty. Gen. Jerry Brown at a public event and told him he should look into the steelworker charity as part of its Bell investigation.



The Oldtimers group is well-connected politically. In addition to Cole, the foundation's 2009 tax filing lists among its officers former state Assemblyman Tom Calderon, as unpaid president. Calderon declined to comment, but his wife, Marcella, confirmed that he is on the foundation board. She said she did not believe he had been officially elected president.



The tax filing also lists as board members Fontana City Councilwoman Acquanetta Warren, Norwalk City Councilman Mike Mendez and former San Bernardino County Supervisor Cal McElwain. McElwain said he had not been active on the board for three years.



The foundation's purpose, according to its federal tax filings, is "to promote the welfare of needy elderly and handicapped families." It had revenues of $7.5 million last year, and salaries and compensation totaling $3.4 million. The latter includes Cole's $95,000 salary as chief executive.



The foundation reports in the filings that about $6.5 million is spent each year providing meals and transportation to seniors and the disabled.



Cole served on the Bell City Council for 24 years, including rotations as mayor, and abruptly announced his retirement from the council in October 2008. He told The Times recently that he had not participated in the council vote to give his foundation a contract to provide transportation to senior citizens. But the fact that Cole's charity was largely financed by the city while he was on the council gives the appearance of a conflict, Berger said.



"It may be technically within the law, but it does not reflect best practices," Berger said.



patrick.mcgreevy@latimes.com



Copyright © 2010, Los Angeles Times

More Los Angeles Local city corruptions

Hefty paychecks for Vernon officials rival those in Bell


The ex-city administrator who now serves as a legal consultant earned seven figures in each of the last four years, records show. Others in Bell's neighboring city got $570,000 to $800,000 last year.



By Kim Christensen and Sam Allen, Los Angeles Times



August 20, 2010

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Bell isn't the only city that has paid huge salaries: In neighboring Vernon, a former city administrator who now serves as a legal consultant has topped the $1-million mark for each of the last four years, records show.



Eric T. Fresch was paid nearly $1.65 million in salary and hourly billings in 2008, when he held the dual jobs of city administrator and deputy city attorney, according to documents obtained by The Times through the California Public Records Act.



Described by city officials as an experienced finance attorney, Fresch was paid nearly $1.2 million last year, records show. Through July 31 of this year, he has earned about $643,000 as "outside legal counsel."



Other highly compensated employees include Donal O'Callaghan, who was paid nearly $785,000 last year as city administrator and director of light and power, overseeing Vernon's city-owned utility. He now earns $384,000 a year overseeing capital projects for the utility after stepping down July 20 as city administrator.



Former City Atty. Jeffrey A. Harrison earned $800,000 last year and City Treasurer/Finance Director Roirdan Burnett made $570,000, records show. The year before, Harrison was paid $1.04 million.



Disclosure of Vernon's hefty salaries follows The Times' recent report that Robert Rizzo reaped total annual compensation of more than $1.5 million as city administrator in working-class Bell. That report sparked public outrage among Bell residents and prompted the resignations of Rizzo and two other highly paid managers.



Although Vernon and Bell share a border in Southeast Los Angeles County, they are very different cities. Bell is a working-class, largely immigrant city with 38,000 residents. Vernon has fewer than 100 residents and is largely a business and industrial hub.



But municipal government experts said they were taken aback Thursday by word of Vernon's big paychecks.



"They are beyond anything that I could imagine for a local government manager," Dave Mora, west regional director of the International City-County Management Assn., said of the sums paid to Fresch and O'Callaghan.



Kenneth Pulskamp, president of the City Manager's Department of the League of California Cities, agreed.



"Over 99% of city managers make well below that amount of money," said Pulskamp, who also is city manager of Santa Clarita. " So that seems way out of the ordinary."



Fresch told The Times on Thursday that he has performed complex legal services for Vernon, mostly related to its energy businesses. He said he gradually accepted more and more work from the city since he first started working for it in 1986.



Once he joined the city staff, Fresch said, his services cost Vernon less than what his private-practice "peer group" would have billed for similar work.



He said Vernon saved money through the arrangement. Fresch now serves as "special counsel" to the city, at $525 an hour.



"If people think that I am a city guy making that kind of money, they would have every right to be outraged," he said.



"I'm not trying to say that municipal compensation should be at the level that I'm doing. I'm saying that if you bring a guy like me in, and do transactions for several hundred million dollars, this would not be out-of-line compensation."



Vernon officials defended the salaries Thursday, saying that Fresch, O'Callaghan and others brought a level of expertise the city otherwise would not have had.



They also noted that the City Council has done away with a two-tiered pay system that allowed some officials to bill for hours worked beyond a normal 40-hour work week. The extra pay did not count toward retirement benefits, they said.



New contracts, which have been phased in over the last year, call for straight salaries for employees.



"Vernon's goal continues to be to bring to the city the most highly trained experts in the field with the best, most creative thinking to solve its challenges," interim City Administrator Mark Whitworth said in a letter with the city's response to The Times' records request.



Whitworth said "the benefits of this high-quality team are evident," noting that "Vernon businesses bring hundreds of millions of dollars in revenue to the region, and support 50,000 jobs."



Vernon City Council members are paid $68,052 each year, far greater than in most cities in Los Angeles County, according to a Times survey.



Founded as an industrial city, Vernon has built its economic well-being on a base of about 1,800 businesses.



Its municipally owned power plant provides electricity at rates consistently lower than those elsewhere, Whitworth said, and the city provides top-tier services, including a fire department that is one of only 60 Class 1 departments nationwide.



Vernon has long been dogged by accusations that it is a fiefdom run by a family that has held sway over the town for generations.



In January, former Mayor Leonis Malburg was ordered to pay more than $500,000 in fines and reimbursements to the city after his conviction for voter fraud and conspiracy charges, bringing an ignoble end to his lengthy reign as Vernon's patriarch.



Malburg, the grandson of Vernon's founder, served on the council for five decades.



Although prosecutors had asked for jail time, Superior Court Judge Michael Johnson cited Malburg's age — 80 — and his medical history in deciding against incarceration.



Malburg's wife, Dominica, 83, was ordered to pay more than $40,000 in fines and fees.



In December, the judge found the couple guilty of engaging in an elaborate scheme in which they pretended to live in Vernon while actually living in a Hancock Park mansion.



Former City Administrator Bruce Malkenhorst Sr., who according to the records obtained by The Times made $911,563 in 2005, was later indicted on public corruption charges.



Still, Malkenhorst retired with a then record state pension of $500,000. Malkenhorst, who rode to work in limousines, is accused of taking $60,000 of city money for personal use. He is awaiting trial.



On Thursday, Whitworth, who also is Vernon's fire chief, singled out Fresch and O'Callaghan for praise for their work on behalf of the city.



Both had been brought in initially as consultants, he said, but so impressed council members at the time that they were asked to join the payroll.



But the League of California Cities' Pulskamp said that, no matter how many hats the two wore, their salaries were "many times the norm" for city managers — probably five times the going rate for a city of Vernon's size, he said.



"Typically, city managers have some expertise in some area whether that be finance or personnel or one of the other departments," he said. "Typically that is just part of being a city manager — you don't get paid extra for that type of expertise."



State Assemblyman Hector De La Torre (D-South Gate), who has proposed legislation that would penalize cities with "excessive compensation," said Vernon's business base does not justify such high pay for its officials.



"You cannot defend these kinds of numbers," he said. "A city government is not a private business. Period. This is not a private company."



kim.christensen@latimes.com



sam.allen@latimes.com

Once a fashion statement and soon to be history!

Is American Apparel losing its (neon) shirt because it ignored its core audience?


August 19, 2010
7:09 am

American Apparel, the sportswear company proudly "made in downtown L.A." may be on its last legging-clad legs.

The global brand, founded by the famously outspoken Dov Charney, saw its stock fall 21.3% on Wednesday, ending at an all-time low of 81 cents, according to Los Angeles Times reporter Andrea Chang.



Additionally, it failed to file its second-quarter earnings and it's been subpoenaed by the United States attorney for the southern district of New York after switching accounting firms.



This isn't the first time American Apparel has been in peril. Before receiving a cash infusion from a third party, Endeavor Acquisition Corp., through a reverse merger, and transitioning into a publicly traded company in 2007, the firm was nearing bankruptcy.



But teetering on the edge of disaster is apparently Charney's style. After going public, the founder and his new partners went into major expansion mode -- opening stores all over the world, despite the seemingly obvious dilemma of how to keep a company steeped in cotton jersey viable once the popularity of leotards and V-neck T-shirts drops off.



And certainly the brand's aesthetics have begun to feel a little stagnant over the last few years -- including its basement-porno advertisements, which have, at long last, completely lost their shock value.



But perhaps the brand's bigger failing is neglecting to grow the merchandise with the customer base that made it a smash in the first place.



American Apparel hit the big time in the early 2000s, ensnaring twenty-somethings with the very same edgy ads and louche tees. But those twenty-somethings are now pushing 40, and they've moved on from harem pants and unitards.



No big deal -- the brand should hypothetically be connecting with the next generation of night crawlers.



But a recent glance at the brand's website showed the merchandise mix to be steeped in supreme novelty. Sheer pencil dresses, '80s one-piece swimsuits, mesh half-shirts, scrunchie-style hair clips. Where are the basics that made American Apparel a go-to for casual wear throughout the last decade?



Well, they're still there -- even the beloved solid-colored V-neck tee. But you have to hack through a wall of irony to get at them.



-- Emili Vesilind

More Rizzo Scams in the City of Bell

Rizzo, other Bell officials got nearly $900,000 in loans from city


August 17, 2010
4:27 pm


Bell City Council meetingThe city of Bell gave nearly $900,000 in loans to former City Administrator Robert Rizzo, city employees and at least two council members in the last several years, according to records reviewed by The Times.

The documents show that the city’s former assistant city manager received two loans of at least $100,000 each and that Councilmen Oscar Hernandez and Luis Artiga received $20,000 loans.

Neither Hernandez nor Artiga reported the loans on their financial disclosure forms for 2009, which is required under state law.

Rizzo, whose huge salary sparked a scandal that forced him and other city officials to step down, received two loans for $80,000 each, city officials said.

“The council members should have declared any loans from the city,” said David Demerjian, head of the Public Integrity Unit of the Los Angeles County District Attorney’s Office, which is investigating Bell. “I cannot think of a reason to provide loans to a council member.”

In an interview, Artiga said Rizzo told him about the loan program when he was having financial difficulties last year. Artiga said Rizzo described the loan as a “pay advance” and said that the city would deduct money from his check to repay it.

Artiga said Rizzo told him some employees used the loans to buy homes.

Hernandez did not return calls seeking comment. Bell’s new Interim City Manager Pedro Carillo said it appears that at least 50 people received loans over the last eight years.\

“Currently our city attorney has questioned their legality,” Carrillo said. “What we’re investigating is who authorized it, why and how.”

Officials have not yet found any documents showing that the City Council approved the program, which appears to have been created by Rizzo. The loan terms vary in length.

Some were paid over years, others were open-ended, Carrillo said. The collateral appears to be unused vacation time, sick leave and pensions. City officials said no credit checks were conducted. The interest rate was tied to a fund managed by the state treasurer.\

At least some of the loans appear to have been repaid.

“We’re still investigating to determine how much was loaned, how much was repaid and how much is outstanding,” said acting City Atty. Jamie Casso.

The loans raise new questions about how officials were compensated in Bell. The Times revealed last month that top city administrators were among the highest-paid in the nation, sparking outrage and investigations by L.A. County prosecutors and the California attorney general.

Rizzo’s contract for this year called for him to receive more than $1.5 million in salary and benefits. The loans appear to come on top of that compensation.

-- Jeff Gottlieb, Kimi Yoshino, Ruben Vives and Richard Winton


Photo: Pedro Carrillo, Bell's interim city manager, is attempting to sort out the various loans. Christina House, For The Times / August 15

Maywood Corruption Investigations

Maywood the latest subject of corruption investigations

The city has been hailed as a bastion of citizen-activism in a civically disengaged region. But now, the FBI and other agencies are looking into possible conflicts of interest and other misconduct.

Maywood Councilman Felipe Aguirre during a City Council meeting earlier this month. Maywood is under scrutiny from the FBI and other law enforcement agencies over two city deals with ties to Aguirre and his allies. (Lawrence K. Ho / Los Angeles Times)



By Hector Becerra, Los Angeles Times
August 16, 2010|6:22 p.m.

Maywood Councilman Felipe Aguirre sees his small working-class city as "the Santa Monica of the Southeast" — a place built on activism, a healthy distrust of the establishment and compassion for the less fortunate.

But these days, Maywood is gaining a decidedly less romantic image.

Earlier this year, officials announced that they were firing the city workforce and outsourcing most municipal functions to the neighboring city of Bell. Then, Bell's government imploded in a scandal over eye-popping salaries paid to the city manager and other senior officials.
Now, Maywood is under scrutiny from the FBI and other law enforcement agencies over two city deals with ties to Aguirre and his allies. Sources told The Times that investigators are also looking into deals apparently unrelated to Aguirre.

The Maywood probes are the latest in a string of public corruption investigations in southeast Los Angeles County that have resulted in indictments in South Gate, Lynwood and Vernon in recent years. The California attorney general's office and the L.A. County district attorney are now investigating Bell as well.

It's unclear exactly how many transactions the FBI is examining in Maywood. Several sources with knowledge of the probe said one of the deals involves a $95,000 federal grant that Aguirre and a business partner received from the city in 2007. They used it to refurbish the facade of a property where the business — a community advocacy group — is located. Aguirre's business received the grant despite concerns from the city's planning director over a possible conflict of interest.

David Mango, the planning director, said he immediately called the city attorney's office, which raised no objections.

In an interview, Aguirre said he regrets taking the money. He said he had concerns at the time but was never told he was ineligible for the money.

"It's there, it happened, and I can't take it back," he said. "Do I wish it happened? No. Should I have talked to someone else and gotten better advice? Probably. But it happened and I can't take it back and I can't say it didn't happen."

Aguirre's election in 2005 marked a shift in Maywood from a relatively conservative Latino-majority council to a more liberal one dominated by social activists. The old council had been criticized by many Maywood residents for supporting police activity that included aggressive parking and traffic enforcement that allegedly targeted illegal immigrants. They were also criticized for maintaining cozy ties to a towing company that lavished some public officials with meals and tickets to sporting events in Las Vegas.

It didn't take long for Aguirre and his allies to make their mark. The council declared Maywood a "sanctuary city," making it a lightning rod in the debate about illegal immigration and provoking fierce debates among the city's mostly Latino residents.

Over the next few years Aguirre and other council members, with the support of activist groups including Union de Vecinos, took on the Police Department, the Los Angeles Unified School District and a local water district.

"Our best defense, and our best situation, is the people being organized," Aguirre said. "This is a city that basically tries to strengthen the roots of community participation."

Outsiders noticed the increased public participation in Maywood — particularly in contrast to neighboring Bell. "Maywood is more volatile," said Assemblyman Hector De La Torre (D-South Gate). "But in Bell, people mistook stability for democracy and participation."

The question in Maywood is whether activism may have become a cover for improper spending.

In addition to investigating Aguirre's $95,000 grant, law enforcement officials have asked questions about a three-year, $360,000 contract for Union de Vecinos to run a lead abatement program. The officials familiar with the law enforcement inquiries spoke on condition of anonymity because they were not authorized to discuss the subject publicly.

Interviews and records reviewed by The Times show that the group did not remove lead from any homes, although it did perform lead tests and conduct public education campaigns.

Former Maywood City Manager Paul Phillips said he cancelled the contract in late 2009 because he didn't think the city was getting its money's worth and was concerned about the group's ties to Aguirre and his allies.

"There were no efforts to do any remediation," Phillips said. "I just thought the dollar amounts were excessive."

Mango, the planning director, said he also had early concerns about Union de Vecinos. The group had not been submitting addresses of residences they had visited. The group told the city that confidentiality was needed to protect tenants from landlords. Aguirre said that after concerns were raised last year, the group began submitting addresses to the city attorney's office.

Mango said he thought the group did a good job with outreach efforts and that the city's agreement did not require actual lead abatement. But he said the group's ability to account for government money was inadequate early on: "Some of their early billings would not have passed muster if they were audited. They were pretty flimsy."

Aguirre said he recommended Union de Vecinos for the lead program because he considered them an "honest and transparent group" that had done a lot of work in the community.

Co-founder Elizabeth Blaney said Union de Vecinos had done lead outreach and education before. When she presented the proposal to Mango and council members on the redevelopment board, none of them voted against the contract or voiced opposition, she said.

hector.becerra@latimes.com
Copyright © 2010, Los Angeles Times

Mitrice Richardson

What went wrong in Mitrice Richardson case?
The Malibu sheriff's station that released the young woman needs a change in culture, a respect for humanity, not just procedures.
BySandy Banks
August 14, 2010

It was the kind of phone call you might expect a worried mother to make.

Latice Sutton sounded concerned, confused and a bit embarrassed as she talked to the sheriff's deputy, trying to figure out whether to make the 80-mile middle-of-the-night drive to the Malibu jail to pick up her 24-year-old daughter, Mitrice Richardson.

"It's dark and she doesn't have a car and I don't want her wandering about," Sutton said. "The only way I would come and get her is if she is going to be released tonight.... She's not from that area and I would hate to wake up to a morning report: Girl lost somewhere with her head cut off."

Sutton chuckled nervously as she spoke. It is chilling to listen to that conversation now.

Within hours of that telephone call, Richardson was released from the Malibu/Lost Hills Sheriff's Station and went missing for 11 months. This week, her skeletal remains were discovered in an isolated ravine in nearby Malibu Canyon. Officials don't know yet how she died.

It's a case that sparked outrage from the start: How could Los Angeles County sheriff's deputies be so cruel, so callous or so clueless as to allow a young woman to set off on her own in an isolated area in the middle of the night?

And the report resulting from a months-long investigation by the sheriff's watchdog, the Office of Independent Review, offers little to quiet the clamor.

"The decision to take Ms. Richardson into custody and transport her to the station was the only prudent option," the report concluded. And the decision to release her from custody a few hours later — with no car, no money and no cellphone — "comported with legal and policy mandates."

It answers some questions, but it raises another:

Where do you begin when you try to finger a villain in a case where no one technically did anything wrong, but everything that could go wrong did?

::

Hindsight is 20/20, of course. I imagine everyone involved at every step did what seemed reasonable to them at that moment.

When Richardson walked out of Geoffrey's Malibu seaside restaurant without paying for her steak dinner, the manager followed her to the parking lot and escorted her back inside. Richardson told him that she had no money or credit cards. She also said she was from Mars and couldn't pay because of "the language of the numbers."

She seemed odd, but not dangerous, employees told investigators. She told them she didn't have any parents, that God spoke to her through a soap-opera actress, that she knew she had to pay for her meal, but thought faith would take care of it for her.

The employees treated her courteously. They discussed pooling their money to settle her tab but worried that "it was not safe for her to drive away from the restaurant alone," the report said.

The manager wanted her taken to jail, because he thought that was the safest place for her and the smartest option for the restaurant. Deputies found marijuana and alcohol in her car. If she had driven off and hurt someone, Geoffrey's might be liable, he believed.

Even Richardson's mother thought, according to the report, that a night in a jail cell might be a good wakeup call for her headstrong daughter.

"I felt that as long as she was in their care and custody, she would be safe," Sutton told me in an interview last spring. "That clearly they would see that something was wrong. They had already been told she was acting crazy."

But mental illness is not always so obvious. Deputies say they saw nothing that indicated Richardson was a danger to herself or others or was unable to meet her own needs — the criteria for mental evaluation.

Richardson chatted with the civilian jailer, who tried to persuade her to wait until morning in the station lobby.

But Richardson said she planned to meet up with friends. So the deputies had to let her walk. "They had no legal justification," the report said, "to deprive her of her freedom."

::

At a testy news conference announcing Richardson's death this week, Sheriff Lee Baca acknowledged that going by the book in this case wasn't nearly good enough. "The deputies acted properly," he said. "Properly doesn't mean we couldn't have done something more."

The investigative report recommends a series of changes, but they are little more than procedural tinkering, designed to insulate the department from liability, not protect vulnerable detainees.

What's needed at that station is a cultural change, a respect for humanity, not just for procedures.

It might be "impractical," as the report says, "to require the department or station personnel to call an arrestee's family and friends" when someone is released from custody.

But it is unkind not to respond to a worried mother's plea that her daughter not be sent alone into the night.

And it is unconscionable not to extend as much courtesy to a confused young woman as to a drunken, foul-mouthed celebrity.

If Mel Gibson could get a ride from deputies to the tow yard to retrieve his car when he was released from that same station after his arrest, why wasn't Richardson offered as much?

The deputies couldn't force Richardson to stay. She was an adult. She didn't seem crazy, they said. She was entitled to walk out legally.

But couldn't a deputy have picked up the phone and called Sutton, or handed Richardson the receiver and suggested, "Why don't you call your worried mother?"

Instead, they offered what the report praised as "professionalism and patience." And they promised a mother something they couldn't deliver.

In that phone call Sutton made, as her daughter was en route to the station, the deputy was boldly reassuring. "You don't have to worry about her safety," he said.

"Oh, I feel safe with her being in custody," Sutton responded, chuckling again, as if the two were partners. "It's being released that I'm worried about. It's crazy out here."

If she knew that even then, I don't understand how the deputies could have been so unaware.

sandy.banks@latimes.com

More Voter Fraud in the city of crooks!

Bell councilman owns a home in Chino

Luis A. Artiga says he lives at the Bell church where he pastors. He owns a four-bedroom home in San Bernardino County that is listed as his primary residence on property tax records.

Luis A. Artiga says he lives in a small apartment in Bell. (Don Bartletti, Los Angeles Times)

By Richard Winton and Ruben Vives, Los Angeles Times

August 12, 2010

A Bell city councilman says he and his family live in a small apartment behind the church where he is the pastor — even though he also owns a large home in Chino.

Luis A. Artiga has owned the Chino home for at least eight years. He was appointed to the City Council in 2008 and was elected in 2009.‪ He insisted in an interview that he lives in Bell but regularly goes to his Chino home to maintain it.

On his voter registration affidavit, he says that he lives at the Bell Community Church, where he is pastor. In addition to Artiga, his wife and three adult sons are also registered as living at the Gage Avenue church, county records show.

But according to records at the San Bernardino County assessor's office. Luis and Miriam Artiga are receiving a homeowners' exemption on the property in Chino.

Rhonda Pfeiffer, principal appraiser with the assessor's office, said that to be eligible for the homeowners' exemption, people must be living in the home as a primary residence at 12:01 a.m. on Jan. 1 of the year.

"You cannot live at two places at the same time," she said. The exemption reduces the assessed value by $7,000 and reduces the property tax bill, she said.

Over the last few weeks, a reporter for The Times has seen Artiga at his apartment at the Bell church several times. Artiga says the second-story apartment on an alley behind the church is 1,100 square feet.

But on Monday morning, a reporter found him watering his lawn at his four-bedroom, ranch-style Chino home, about 35 miles east of Bell.

About noon, his sons left the home and spotted a Times reporter and photographer outside the property. The reporter and photographer knocked on the door three times and got no answer.‪ A short time later, the sons returned and pulled up to the garage, using an SUV to shield a BMW from view.

The 49-year-old Artiga, wearing a baseball cap, then came out of the garage and got into the BMW and drove away at a high rate of speed as the SUV drove slowly behind.

In an interview later that day, Artiga said he fled the Chino house because he didn't want the media in the area. He also said he feared for his life because he and other council members have received death threats since the salary scandal in Bell became news.
He said he only goes to Chino to check on the house, pick up the mail and water the plants.‪

"I don't live in Chino," Artiga reiterated. "If I go there it's during the day to turn on the sprinkler. I don't sleep there."

He said his 5-year-old daughter graduated from preschool in Bell and will begin attending elementary school there in September.‪

Occasionally, Artiga said he stays at the house for special occasions such as birthday parties. "And that has happened only twice in the last six to seven months," he said.
Artiga said he most recently stayed at the Chino house July 27. That day, two fellow council members announced that they would continue their terms without pay during a council session in which residents demanded that he and three other council members resign.‪

"The Sheriff's Department told us that night not to sleep" at the apartment, Artiga said. "They told us to stay at the Chino house, so that time, yes, I was there," he said.‪
Artiga said he bought the house in 1993 with his parents. He says he didn't know to change the exemption form on file with San Bernardino County when he moved to Bell. In fact, he said he wasn't aware of the form.

In recent years, Los Angeles County Dist. Atty. Steve Cooley has successfully prosecuted several politicians for registering to vote and getting elected in areas in which they don't live. Prosecutors recently indicted L.A. City Councilman Richard Alarcon and his wife on perjury and voter fraud charges for allegedly falsely claiming an address as his residence. Alarcon was also charged with filing a false declaration of candidacy.

"They have to register to vote at their domicile and can only be elected in the city or district where they live," said David Demerjian, head of the district attorney's public integrity section. "We basically get them for lying. They perjure themselves when they register to vote at an address that isn't their true residence."

Demerjian said there is currently no investigation into Artiga's residency status.
richard.winton@latimes.com
ruben.vives@latimes.com

Copyright © 2010, Los Angeles Times

Chinese nationals arrested in brothel case

Four Chinese nationals arrested in brothel case

They allegedly engaged in various types of immigration fraud to recruit Chinese women into home-based prostitution in the San Gabriel Valley

By Ching-Ching Ni, Los Angeles Times, August 12, 2010

Four Chinese nationals have been arrested on suspicion of recruiting women from China to work in brothels set up in residences in Monterey Park and San Gabriel.

According to Immigration and Customs Enforcement officials, the weekend bust resulted from a nine-month investigation into a far-reaching prostitution enterprise that relied on word of mouth and personal referrals to lure customers into private condominiums for commercial sex.

Court papers allege that the defendants engaged in various types of immigration fraud, including using fake documents and false marriages to recruit Chinese women, many with valid student visas, into a life of prostitution in the San Gabriel Valley.


"We found no evidence of force or coercion. These women were willing participants," said Claude Arnold, special agent in charge of ICE's office of Homeland Security Investigations in Los Angeles. "But regardless of whether these women were actively trafficked, they are still being exploited and these operations degrade the quality of life in our neighborhoods."

The defendants arrested on Saturday evening were Huagui Lotto, a.k.a. "Candy," 53, of Rowland Heights; her husband, Phillip Tingxiang Fu, 47, of Rowland Heights; Yibin Zhang, 45, of Monterey Park; and Jian Guo, a.k.a. "David," 42, of Arcadia.

The charges filed against them include conspiracy to import and harbor aliens for prostitution, conspiracy to commit marriage fraud and pimping and pandering.

Authorities say it is not unusual to see prostitution rings move into residential neighborhoods given recent crackdowns on sex trades such as those found in massage parlors.

As these industries move more underground and into private homes, they also rely more heavily on repeat customers rather than fresh clientele from the street, making these brothels harder to infiltrate, officials say.

The Asian prostitution rings are particularly active in the San Gabriel Valley and are tightly controlled by managers who act as gatekeepers who scrutinize potential customers and shun those they don't trust.

Among the four arrested over the weekend, Lotto allegedly managed the Monterey Park brothel located in one of the three-story multifamily town houses on a residential stretch of North Nicholson Avenue near East Garvey Avenue. Zhang served as her enforcer and part-time manager who also shuttled the sex workers to and from their jobs, according to authorities.

Officials say most of the prostitutes working there are Chinese, speak limited English and appear to be working off debt related to their immigration status.

Lotto's husband, Fu, was the operation's alleged overseas recruiter. Court papers indicate he was stopped at Los Angeles International Airport in May and told officials he was returning from a six-week trip to China to set up his business — a cultural exchange program that recruits underprivileged Chinese students to study in the United States.

Among Fu's belongings, officials found multiple identification documents not belonging to him and money transfer receipts to U.S. citizens who appeared to be participating in marriage fraud to shuttle illegal immigrants into the country.

"There was no school," said Arnold. "They committed fraud."

Sgt. Frank Duke of the Monterey Park Police Department said law enforcement depends on the community to speak up about potential criminal activities. He encourages residents to call his department, which has Mandarin- and Cantonese-speaking officers able to help those uncomfortable with English.

"A major component of us shutting any problem down is because of the community," said Duke. "People should know their neighborhoods. If you see a constant turnover of cars and different people visiting, maybe something is not right and you might want the authorities to know about it."

chingching.ni@latimes.com

Copyright © 2010, Los Angeles Times