A current San Francisco city employee and a former city worker were both charged on Tuesday with multiple felonies involving bribery, misuse of public money, and financial conflict of interest.

San Francisco District Attorney Brooke Jenkins said in a press statement that the charges against Lanita Henriquez, Director of San Francisco’s Community Challenge Grant Program, and Rudolph Dwayne Jones, founder and president of public relations firm RDJ Enterprises, were the result of an ongoing investigation of corruption at City Hall.

Jones served as Deputy Chief of Staff to former Mayor Gavin Newsom and was appointed by the late Mayor Edwin Lee to the local business enterprise subcommittee of the city’s Contract Monitoring Division.

The criminal complaint from the DA’s office alleges that between July 2016 through July 2020, Henriquez, 53, and Jones, 56,  appropriated public funds for their own use and the use of others. The complaint also alleges that Jones paid Henriquez a series of checks between February 2017 and October 2018 totaling $25,000. 

Henriquez is also alleged to have made 23 contracts in her official capacity between the City and County of San Francisco and entities controlled by Jones in which she had financial interests between July 2016 and July 2020. Leading up to and during the period of these contracts, Henriquez allegedly received $32,942 from entities controlled by Jones, while family members and close associates of Henriquez received a total of $156,821 from such entities.

“The public funds allocated to the City’s Community Challenge Grant Program are intended to benefit the communities of our City – not to line the pockets of government officials,” Jenkins said in a prepared statement. “My office will continue to investigate allegations of misconduct by public officials and employees, and our work with our federal partners will be a key part of that effort.”  

Henriquez and Jones were each charged with six counts of bribery and 23 counts of financial conflict of interest in a government contract. Both were also charged with one count of misappropriating public money.

Henriquez was arrested Tuesday morning following a warrant issued by the Superior Court of San Francisco. A warrant was also issued for Jones’s arrest but he has not yet been taken into custody as of Tuesday afternoon. DA investigators and FBI agents executed search warrants at multiple locations in San Francisco and Alameda Counties.

Jenkins said the investigation was conducted by her office’s Public Integrity Task Force with assistance from the FBI’s San Francisco Field Office. 

The charges do not appear to be related to the corruption scandal involving former Public Works Director Mohammed Nuru and other city officials, contractors, and developers.

Anyone with information about the case was asked to call the San Francisco District Attorney’s Office Special Prosecutions Unit at 628-652-4000. 

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Three San Francisco Design Firm Execs Charged in Bribery Scheme | Engineering News-Record

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SAN FRANCISCO – A federal jury today convicted Harlan Kelly, the former General Manager of the San Francisco Public Utilities Commission (PUC) of charges that he accepted bribes and gifts from a local businessman in a scheme to provide confidential information about the city public bidding process and steer city contracts to that person’s businesses, announced First Assistant United States Attorney Patrick Robbins, Federal Bureau of Investigation Special Agent in Charge Robert K. Tripp, and Internal Revenue Service-Criminal Investigation (IRS-CI) Special Agent in Charge Darren Lian. The verdict follows a two-week trial before United States Chief District Judge Richard Seeborg.

Kelly, 61, of San Francisco, was arrested on a criminal complaint in November 2020, and he was tried on charges contained in a May 31, 2022, superseding indictment that included charges of conspiracy to commit honest services wire fraud and honest services wire fraud. The superseding indictment also included charges of false statements to a bank, conspiracy to make false statements to a bank, bank fraud, and bank fraud conspiracy, related to a scheme to defraud Quicken Loans in connection with a $1.3 million mortgage refinance loan obtained by Kelly.

Kelly was convicted of one count of conspiracy to commit honest services wire fraud, one count of honest services wire fraud, and all four counts related to the bank fraud scheme. The jury found Kelly not guilty of two honest services wire fraud counts.

The charges against, and prosecution of, Kelly grew out of a years-long investigation into bribery and public corruption in San Francisco city government, led by the U.S. Attorney’s Office, the FBI, and IRS-CI. To date, 13 individuals have been charged in connection that larger set of investigations, including Mohammed Nuru, former director of the San Francisco Public Works department, and multiple city contractors and other facilitators of bribes and corruption.

The evidence at trial showed that Kelly, appointed in 2012 as General Manager of the San Francisco PUC, had access to confidential information about city contract bidding processes, and the ability to influence the awarding of some city contracts. Documents and testimony showed that Kelly had a close personal and professional relationship with San Francisco business owner and contractor Walter Wong, and that during the time Wong both conducted business with the city and sought additional lucrative contracts to supply the PUC with LED streetlights. While he was doing business with the city and seeking contracts, Wong provided numerous gifts, benefits, and bribes to Kelly. These bribes including discounted construction work on Kelly’s personal residence and a lavish international trip hosted by and in part paid for by Wong. Evidence showed that Wong paid travel and personal expenses for Kelly and his family during a March 2016 Kelly family vacation to Hong Kong, Macau, and China, and that Wong paid for hotel expenses and incidentals such as meals and luxury excursions. Wong has previously pleaded guilty to charges that he engaged in an honest services fraud conspiracy in connection with his interactions with Kelly and others.

The evidence at trial showed that as part of the bribery conspiracy, Kelly provided confidential information and documents about the details of bids submitted by other contractors, including proprietary pricing and cost information, and information and documents with internal notes about how city employees in the PUC were evaluating and rating the bidders. The evidence showed that Kelly delivered these documents to Wong and his associates in violation of Kelly’s fiduciary obligations to the city and its residents, and that the confidential information assisted Wong and his company in improving Wong’s chances to obtain the contract award.

Trial evidence also showed that Kelly defrauded Quicken Loans, a financial institution, in a $1.3 million dollar real estate mortgage loan provided to Kelly. The evidence at trial showed that Kelly worked with an associate, prominent city businessman and property manager Victor Makras, to mislead the bank. According to the evidence, in the application for the loan Kelly falsely represented that he had a $915,000 mortgage and concealed the true nature of his debts from Quicken. According to the trial evidence, these misrepresentations were material to the bank’s evaluation of the borrower and the loan. The outstanding debts that Kelly concealed from Quicken included a construction debt owed to the contractor, Walter Wong that amounted to about $89,000. Another debt concealed from the company was a $70,000 unsecured personal loan made by Makras to Kelly, a result of Makras directly paying Kelly’s credit card debt in order to conceal the fact that Kelly received this loan from Makras.

Co-defendant Makras, 64 of San Francisco, was also charged in the May 31, 2022 superseding indictment, and was convicted of making false statements to a bank and bank fraud at a separate trial in August 2022.

The federal jury today convicted Kelly of the following:

•    One count of conspiracy to commit honest services wire fraud, in violation of 18 U.S.C. §§ 1343, 1346, and 1349, which carries a maximum possible penalty of 20 years in prison and a fine of $250,000, or the greater of twice the gross gain or gross loss
•    One count of honest services wire fraud, in violation of 18 U.S.C. §§ 1343 and 1346, which carries a maximum possible penalty of 20 years in prison and a fine of $250,000, or the greater of twice the gross gain or gross loss
•    One count of making false statements to a bank in violation of 18 U.S.C. § 1014, which carries a maximum possible penalty of 30 years in prison and a $1,000,000 fine
•    One count of conspiracy to make false statements to a bank in violation of 18 U.S.C. § 371, which carries a maximum possible penalty of 5 years in prison and a fine of $250,000
•    One count of bank fraud, in violation of 18 U.S.C. §§ 1344(1),(2), which carries a maximum possible penalty of 30 years in prison and a fine of $1,000,000, or not more than the greater of twice the gross gain or gross loss
•    One count of conspiracy to commit bank fraud, in violation of 18 U.S.C. §§ 1344(1),(2) and 1349, which carries a maximum possible penalty of 30 years in prison and a fine of $1,000,000, or not more than the greater of twice the gross gain or gross loss

As part of any sentence, the court also may order the defendant to serve an additional period of supervised release to begin after any prison term, to pay additional penalties, and to pay restitution, if appropriate. However, any sentence will be imposed by the court only after consideration of the U.S. Sentencing Guidelines and the federal statute governing imposition of a sentence, 18 U.S.C. § 3553. Defendant Kelly remains out of custody pending sentencing. No future date has yet been set.

The case is being prosecuted by the Corporate and Securities Fraud Section of the U.S. Attorney’s Office. Assistant U.S. Attorneys David Ward and Kristina Green prosecuted the case at trial with the assistance of Tina Rosenbaum. The case is being investigated by the FBI and the IRS-CI.

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SACRAMENTO (CBS SF/AP) — Prosecutors say a former contract manager for California’s transportation agency pleaded guilty Monday in what they called an ongoing investigation into a bid rigging and bribery scam involving millions of dollars worth of contracts.

Choon Foo “Keith” Yong agreed to cooperate with the investigation into what prosecutors said was a conspiracy to rig the competitive bidding process for improvement and repair contracts at California Department of Transportation facilities.

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The scheme ensured that companies controlled by his co-conspirators submitted the winning bid and won the contracts, prosecutors said.

The contracts were cumulatively worth more than $8 million, and Yong’s agreement called for him to be awarded at least 10% of the value, according to his plea agreement.

He received cash bribes and other payments in the form of furniture, wine and remodeling services on his home, valued together at more than $800,000, prosecutors said.

He agreed to pay restitution as part of his plea deal in a scam that ran from early 2015 through late 2019, prosecutors said.

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Assistant Attorney General Jonathan Kanter of the US Justice Department’s Antitrust Division described Yong’s guilty plea as “the first in the Antitrust Division’s ongoing investigation into bribery and bid rigging at Caltrans.”

Caltrans officials did not immediately comment.

The plea deal says Yong worked with “Contractor A, Contractor B and other co-conspirators,” without naming them. He would “submit the agreed upon bidders’ names — which always included Contractor A” for consideration. Another company would submit a “sham bid” so that Contractor A or another co-conspirator’s company would win the contract.

Contractor A would then pay money or provide other benefits to the co-conspirator bidders.

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SAN FRANCISCO — The trash disposal companies that serve San Francisco have agreed to pay a $36 million criminal penalty for their role in a wide-ranging federal public corruption probe involving the city’s former public works director.

The three subsidiaries of Recology Inc. admitted to conspiring to bribe the former director and agreed to cooperate in investigations for three years in exchange for the government deferring prosecution, acting US Attorney Stephanie M. Hinds announced Thursday. A judge must sign off on the agreement.

A Recology subsidiary serves serving Santa Rosa, Rohnert Park, Petaluma, Cotati, Sebastopol, Cloverdale, Healdsburg, unincorporated Sonoma County, Novato, Stinson Beach, Bolinas, West Marin and Point Arena.

Prosecutors say the San Francisco companies, which have a monopoly there, conspired to bribe Mohammed Nuru from 2014 through January 2020, when the then-director of the Department of Public Works was arrested and charged with fraud.

Recology funneled more than $900,000 to Nuru, including money to a non-profit controlled by Nuru and $60,000 a year for an annual and lavish public works holiday party, prosecutors said. As director and waste regulator, Nuru could influence contract rates favorable to Recology.

Separately, Recology earlier this year agreed to refund customers $100 million after the city attorney’s office found the company had improperly raised trash disposal prices over four years. By law, the company will continue to have the exclusive right to dispose of waste in San Francisco.

The federal investigation has ensnared several City Hall officials and insiders, including the former head of the San Francisco Public Utilities Commission.

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