Debra Wong Yang
United States Attorney
Central District of California
United States Courthouse
312 North Spring Street
Los Angeles, California 90012
July 28, 2005
Thom Mrozek (213) 894-6947
Los Angeles, CA - Albert T. Robles, the former treasurer of South Gate, California was convicted today on 30 felony counts related to a scheme in which he extorted city contractors in exchange for using his influence to steer projects to those paying the bribes.
A federal jury in Los Angeles found that Robles, 40, was guilty of 16 counts of "honest services" mail fraud, five counts of wire fraud, four counts of money laundering and five counts of bribery.
The evidence presented during a 2½-week trial showed that the citizens of South Gate were defrauded out of their right to Robles' "honest services" in a scheme that cost the city millions of dollars and led to payments of more than $1.4 million to Robles, his family and his friends. The jury found that Robles was involved in schemes to fraudulently award three contracts: a $24 million project to build senior housing, a $4 million sewer rehabilitation contract and a $48 million trash-hauling contract.
In addition to Robles, the jury this morning convicted George Garrido, 53, who received a lucrative consulting contract with a trash hauler in exchange for the city awarding the hauler a 10-year contract. Garrido was found guilty of five counts of mail fraud.
Previously in this case, Edward T. Espinoza, 50, of Summit, New Jersey, a financial consultant who Robles used to funnel city money to himself, his family and friends; and Michael Klistoff, 42, of Seal Beach, California, an official of Klistoff & Sons and All City Services, both waste-hauling companies, pleaded guilty to mail fraud charges for scheming with Robles and Garrido to deprive South Gate citizens of Robles' honest services.
Robles induced several businesses hoping to receive city contracts and other benefits to hire Espinoza, who funneled money he received to Robles' family and friends. As part of this scheme, Espinoza created a shell corporation, called EM Ventures, to receive city monies and to make payments to Robles' family and friends. The companies induced by Robles to hire Espinoza were the "Southland Companies," a collection of companies that had development projects in South Gate, including three senior housing projects; and Psomas, a consulting firm that was hired to manage a sewer rehabilitation project in South Gate. None of the companies were accused of wrongdoing.
As a result of this part of the scheme, a total of $2,156,606 was paid to Espinoza. In turn, Espinoza, through EM Ventures, paid $1.4 million for the benefit of Robles, his family and his friends. The payments from Espinoza to Robles included $165,000 that went toward the purchase of a beachfront condominium in Baja California and a $55,000 payment for a "platinum" membership for Robles in a self-help motivational organization.
The second part of the scheme involved the award of South Gate's $48 million refuse and recycling contract to Klistoff & Sons in exchange for more than $30,000 in gifts to Robles and campaign contributions to Robles' committee, Citizens for Good Government. In exchange for Robles steering the contract to Klistoff, Garrido received a $3.5 million consulting contract from Klistoff & Sons.
Robles and Garrido are scheduled to be sentenced by United States District Judge Stephen V. Wilson on October 24. The mail and wire fraud charges each carry a maximum potential sentence of 20 years in federal prison. The bribery and money laundering charges each carry a maximum potential sentence of up to 10 years in prison.
Espinoza and Klistoff are scheduled to be scheduled by Judge Wilson on October 31.
This case is the result of an investigation by the Federal Bureau of Investigation and IRS-Criminal Investigation Division.
Release No. 05-110
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