Posted on: May 15, 2023, 12:30h.
Last updated on: May 15, 2023, 12:30h.
Chinese real estate developer Shenzhen New World has been fined $4 million for bribing Los Angeles councilmember Jose Huizar to gain favorable treatment on its application to build a downtown skyscraper.
The company’s billionaire owner, Wei Huang, who showered Huizar with casino chips on lavish Las Vegas trips, is wanted by the US on charges of fraud and bribery. He is considered a fugitive.
US District Judge John Walter imposed the highest penalty possible on Huang’s company Friday, as prosecutors requested. He also ordered the company to open its books for government review, adopt an ethics code, and post a notice of its conviction on its website, something it had yet to do at the time of writing.
This five-year bribery scheme was brazen, devised and carried out with impunity by the sole owner and highest authority for the company — Chairman Huang — with the help of his employees and associates acting under his direction,” prosecutors wrote.
Pay to Play
Huizar has admitted being at the center of a sprawling pay-to-play scheme at City Hall, which involved extorting at least $1.5 million from Huang and other developers. He pleaded guilty in January to charges of racketeering conspiracy and tax evasion and awaits sentencing.
Huizar was the chairman of the Los Angeles Planning and Land Use Management Committee, which had the power of life and death over major construction projects in the city. He was also the councilmember for District 14, which includes the downtown area.
Shenzhen World owns downtown’s LA Grand Hotel, which it wanted to embellish with a 77-floor mixed skyscraper. It would have been the tallest building on the West Coast, but it was put on hold when the FBI began investigating the deal.
From 2013 to 2018, Wei showered Huizar with “cash, casino gambling chips, flights on private jets and commercial airlines, stays at luxury Las Vegas hotels and casinos, expensive meals, spa services, prostitution services, [and] political contributions,” according to court documents.
On one trip to the Palazzo Las Vegas, staff recognized Huizar as a prominent Los Angeles politician, flagging him as a “politically exposed person” (PEP). They also noticed he was playing with and cashing out tens of thousands in chips that had been provided by Wei.
Under anti-money laundering regulations, operators must provide additional scrutiny to PEPs. That’s because they present greater risk of potential involvement in bribery or corruption, which increases the risk that funds brought to the casino may have been laundered.
When Huizar refused to sign a document declaring he had an independent source of wealth and was gambling with his own money, he was escorted from the premises. Casino staff then called the FBI.
Huang’s private jet left the US shortly after, without return.