Hews Media Group-Community News has obtained a complaint, filed in 2017 by several medical marijuana dispensaries in United States District Court, alleging bribery, conspiracy, collusion, and civil R.I.C.O.,against the city of Huntington Park, Huntington Park Vice-Mayor Karen Macias, and Council members Graciela Ortiz and Marilyn Sanabria.
The complaint was filed by the Los Angeles based law firm of DR Welch.
The case should catch the attention of Los Angeles District Attorney Jackie Lacey’s Public Integrity Division given the evidence strongly indicates Brown Act violations by Macias, Ortiz and Sanabria.
Some familiar names in East Los Angeles politics are also alleged to have participated in the corrupt scheme, including current Huntington Park Economic Development Chair Efren Martinez, who managed Macias, Ortiz and Sanabria’s City Council election campaigns, and former disgraced Bell Gardens Councilman Mario Beltran.
Sources are telling HMG-CN that Mike Patel, who is named in the complaint working with Martinez and Beltran, and a person who DR Welch could not identify, is the same Mike Patel who owns a Travel Lodge in Lynwood and is developing hotels in Santa Fe Springs and Downey. Patel is currently a reserve Deputy with the Los Angeles County Sheriff’s Department and “raised a lot of money” for Los Angeles County Assessor Jeff Prang’s recent campaign.
Included as co-defendants in the complaint is a Lake Forest company called C4EverSystems, a large cash payment system company that places payment kiosks in marijuana dispensaries, and MJIC, a full-service marijuana industry provider.
Bribes and Kickbacks
The complaint claimed that, after their own failed sales efforts to secure future marijuana dispensary business from Huntington Park, C4Ever and MJIC “hired” Martinez and Beltran for assistance.
The complaint further alleged that Martinez and Beltran contacted a willing Macias, Ortiz, and Sanabria and proceeded to set a plan in motion to rig the City’s marijuana permit application process so three companies favored by the defendants would win the lucrative dispensary permits.
DR indicated that the plan also included payoffs from the City application fees, kickbacks from the hefty future cash fees charged by C4Ever inside all three dispensaries, and monetary bribes to Macias, Ortiz, and Sanabria.
The first step in the scheme involved adopting City Ordinances (Ordinance) that would make it “impossible,” with the exception of the companies favored by the group, to obtain marijuana permits in the City.
The major sections of the Ordinance would: charge a $5,000 Application Fee, mandate a short two-week permit selection process, prohibit outside lobbyist and applicants from contacting any City council members, and dictate that officials must redact all relevant contact information from the applications before delivery to Council members.
A violation of the redaction section would result in immediate denial of the application.
The order also contained a highly questionable section that bypassed City council staff review/recommendations of applicants, with the City councilmembers “conducting all reviews, grants, and awards of the applications.”
The controversial Ordinance passed in April 2016.
Macias, Ortiz, and Sanabria moved quickly, sending out requests for proposals on April 14, due two weeks later on May 4, to be reviewed and approved at their May 17 meeting.
On or around May 5, the permit applications were delivered for redaction and assigned individual reference numbers.
But according to the complaint, certain applications were never redacted.
As mandated by the Ordinance, the application was, “given to City Council to review at their own leisure prior to the award date.”
The May 17 meeting started out with a bang, with Council woman Graciela Ortiz making a belabored point, without any prompts, that the entire application selection process was “completely transparent.”
Council member Valentin Amezquita, a frequent critic of Macias, Ortiz, and Sanabria, angrily disagreed stating that “the entire process was illegal and I will not take part in the selection.”
During their review, the Council members selected five finalists who were called to the May 17 meeting for final selections.
The selection process commenced and three of the five finalists were awarded the marijuana permits.
Ortiz, Sanabria, and Macias voted for the same three companies out of their five choices.
And all three companies they approved had strong ties to co-defendants C4Ever and MJIC, and by extension, Martinez and Beltran.
A Web of Conflicts Ignored by Council
The C4Ever Strand
C4Ever’s principal owners at the time were Michael Tuccelli-Margolin and Gregg Hodge. The company’s website lists its address as 22600 Lambert Rd., Suite 707-A, Lake Forest.
HMG-CN traveled to the office and found a different company name on the door at the 22600 Lambert Rd. address.
C4Ever’s office address at 22600 Lambert Rd Suite 707-A did not exist.
HMG-CN called the number on C4Ever’s website, reached a gentleman named “Bill,” and inquired about the address.
Bill, who could be VP of Sales Bill St. Clair as listed on the website said, “oh is that the address on the website? We moved to 14 Orchard Rd. in Lake Forest.”
The Horowitz and Armstrong Strand
C4Ever is represented by Larry Horowitz of Horowitz and Armstrong (H&A), a law firm who’s address is the same as C4Ever’s “new address” on Orchard Road.
C4Ever’s website lists H&A Principal John Armstrong as the company’s legal counsel. Mr. Armstrong also sits on the Board of C4Ever.
To Read The Rest Of This Article By Brian Hews on Los Cerritos News / Hews Media Group
Published: July 10, 2018
Founder & Interim Editor of L.A. Cannabis News