Former CEO And COO Of JHL Biotech Sentenced For Conspiring To Steal Trade Secrets And Commit Wire Fraud Exceeding $101 Million
SAN FRANCISCO - Paul Fredrick Giusti, the former Group Government & Community Relations Manager for Recology’s San Francisco Group, has been charged in a federal criminal complaint with bribery and money laundering, announced United States Attorney David L. Anderson, IRS Criminal Investigation Special Agent in Charge Kareem Carter, and Federal Bureau of Investigation Special Agent in Charge Craig D. Fair.
The complaint alleges that Giusti, 64, of San Francisco, engaged in a long-term scheme to defraud the public of its rights to honest services and laundered money in the process. The complaint alleges that Giusti was a central actor in Recology providing Mohammed Nuru, then San Francisco’s Director of Public Works, with a continuous stream of money and benefits, ultimately worth over $1 million, to influence Nuru to act in Recology’s favor. According to the complaint, among other payments, Giusti agreed to give $20,000 to Nuru to secure his support for Recology’s efforts to implement a price increase on the “tipping fees” it charged the City to dump materials at a Recology facility. As part of the scheme, Giusti concealed the bribe as a “holiday donation” from Recology to the Lefty O’Doul’s Foundation for Kids, a non-profit organization for underprivileged children in San Francisco. Nick Bovis, the head of the Foundation, used the money to pay for an annual holiday party organized by Nuru for select DPW employees and other invited guests. The payment was one of several over the years intended to influence Nuru with respect to official actions important to Recology.
“Today's complaint alleges that Paul Giusti bribed Mohammed Nuru with more than $1 million of party funds and other benefits,” said U.S. Attorney David L. Anderson. “These bribes were laundered through non-profit organizations to disguise their source and to create the false appearance of a legitimate charitable intent. In return for these bribes, Nuru helped Recology obtain garbage fee increases approved by the City but paid by an unsuspecting public. As our investigation continues, each charge sheds new light on the ways and means of City Hall corruption.”
“Following the money is key in a case like this,” said Kareem Carter, Special Agent in Charge IRS Criminal Investigation. “The defendant used non-profit organizations to layer complex financial transactions in an attempt to conceal the payments to a city official. IRS CI will continue to work with our law enforcement partners to ensure that any individual or company involved in this scheme shall be held accountable for their actions and not go unpunished.”
“The FBI takes seriously any actions of individuals who seek to improperly influence public officials at the expense of the rate-paying public, and will hold accountable those who attempt to gain an unfair advantage in the public contracting process,” said Craig D. Fair, FBI Special Agent in Charge.
According to the complaint, Giusti disguised several Recology payments as charitable donations. Part of the alleged scheme involved Giusti arranging for Recology to “donate” to the Lefty O’Doul’s Foundation for Kids from 2016 to 2019, money which was used at Nuru’s direction to pay for DPW holiday parties. Another part of the scheme involved Giusti, also at Nuru’s direction, arranging for Recology to provide approximately $1 million in regular payments over several years to a local non-profit organization. This non-profit immediately funneled the payments to a second non-profit organization, and those funds were then controlled and used by Nuru. In yet another part of the scheme, Giusti arranged a job for Nuru’s son at Recology and, once that benefit was discovered, terminated him and promptly secured for him a Recology-funded internship at yet another non-profit, paid for by a grant for a summer youth internship program. Finally, the complaint alleges Giusti arranged for Recology to secretly pay for the funeral of a DPW employee by having a non-profit pay the mortuary bill and creating a fake donation invoice. The complaint outlines that Giusti timed several “donations” and other benefits to coordinate with key decision points in Recology’s requests for assistance and approvals from DPW, particularly Recology’s successful 2017 application to increase rates to San Francisco residents for garbage service.
The charges contained in the criminal complaint are mere allegations. As in any criminal case, the defendant is presumed innocent unless and until proven guilty in a court of law.
Giusti is charged with one count of bribery, in violation of 18 U.S.C. § 666(a)(2), and one count of laundering the proceeds of honest services fraud, in violation of 18 U.S.C. § 1956(a)(1)(B)(i). If convicted of bribery, he faces a maximum penalty of 10 years in prison and a fine of $250,000. If convicted of concealment money laundering, he faces a maximum penalty of 20 years in prison, a fine of $500,000 or twice the value of the property involved in the transaction, or both. 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 imposition of a sentence, 18 U.S.C. § 3553.
Giusti is expected to be scheduled to make his initial appearance in federal court in San Francisco on November 23, 2020 before U.S. Magistrate Judge Jacqueline Scott Corley.
The case is being prosecuted by the Corporate Fraud Strike Force of the U.S. Attorney’s Office. The case is being investigated by IRS Criminal Investigation and the FBI.