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Press Release

New Charges, Plea Deals in San Francisco City Hall Corruption Investigation

For Immediate Release
U.S. Attorney's Office, Northern District of California
Two Contractors Charged with Bribery, Two More to Plead Guilty, Including One Who Will Cooperate with Authorities

SAN FRANCISCO – Charges were filed today in a criminal complaint alleging that Alan Varela and Bill Gilmartin, the president and vice president, respectively, of a Bay Area civil engineering and construction firm, bribed Mohammed Nuru, formerly San Francisco’s Director of Public Works, announced United States Attorney David L. Anderson, and Siddhartha Patel, Assistant Special Agent in Charge of the Federal Bureau of Investigation.  Additional facts regarding the investigation and charges can be found here:

According to an affidavit filed in connection with the complaint, Varela and Gilmartin provided gifts and benefits to Nuru since at least as early as 2013, including, among other things, $20,000 in meals and a tractor worth $40,000 for Nuru to use at his personal vacation home.  In exchange for these benefits, Nuru allegedly provided Varela and Gilmartin with a steady stream of illegal inside information about a lucrative San Francisco public contract to build and operate an asphalt recycling plant that Varela and Gilmartin sought.

Additional documents filed today in court indicate that two other contractors previously charged in the ongoing public corruption probe intend to plead guilty. In one case, a filed plea agreement indicates that Balmore Hernandez, the CEO of a local construction company, will plead guilty and has agreed to cooperate in the government’s investigation.  In the other case, local contractor Florence Kong will also plead guilty, and will admit that she bribed Nuru with, among other things, a Rolex watch worth more than $35,000, in return for which Nuru corruptly helped Kong obtain San Francisco public contracts, including work at her recycling facility.  Kong will also admit lying to the FBI about her interactions with Nuru.  Kong’s guilty plea is not a cooperation plea.

Varela and Gilmartin are the seventh and eighth defendants to be charged as part of the graft probe.  Hernandez and Kong are the third and fourth defendants to plead guilty.  Charges were previously filed against Nuru and local restaurateur Nick Bovis on January 28, 2020.  In June of this year, charges were filed against Hernandez and Kong, as well as against Sandra Zuniga, the Mayor’s Fix-It Director.  Charges were also filed in June against Walter Wong, a local contractor and permit expediter.  Hernandez joins Wong and Bovis in agreeing to cooperate with the government’s investigation.

“Public works contracts in San Francisco are supposed to be awarded on a merit system in San Francisco for the benefit of the residents and taxpayers of San Francisco,” said U.S. Attorney Anderson.  “The complaint filed today alleges that this merit system was undermined with insider information and favorable treatment.  Instead of awarding public works contracts on the basis of merit, the defendants allegedly sought to secure significant profits on the basis of bribes and backroom deals.”

“While our investigation is ongoing, I hope the resolutions in the Hernandez and Kong cases will help restore confidence in our city governments for Bay Area residents,” said assistant SAC Patel.  “San Francisco City Hall can and will function without the influence of the corruption we have seen unravel in this case.”

Varela and Gilmartin face a maximum statutory penalty of up to 10 years in prison, as well as fines that could go as high as $250,000 or twice the gross gain or loss from the alleged bribery scheme.  In addition, the court may order additional terms of supervised release and restitution.  However, any sentence following conviction would be imposed by the court only after consideration of the U.S. Sentencing Guidelines and the federal statute governing the imposition of a sentence, 18 U.S.C. § 3553

The prosecution is being handled by the Office of the U.S. Attorney, Northern District of California’s new Corporate Fraud Strike Force and is the result of an investigation by the FBI.


Updated September 17, 2020

Public Corruption