Young Guilty on Five Counts of Mail Fraud

Former Norwalk Assemblyman Bruce E. Young, once one of the most powerful members of the California Legislature, was found guilty by a federal jury Tuesday of five counts of mail fraud for concealing outside earnings while a legislator and laundering campaign funds to other politicians.

However, Young was acquitted of 23 other counts charging that he illegally received consulting payments from political corruption figure W. Patrick Moriarty and a Los Angeles cable television company while championing legislation benefiting their interests.

Lawyers’ Response

The split verdict in the complex federal fraud case against Young, the first legislative figure in California to be convicted in a political corruption scandal in more than 30 years, was reached Tuesday afternoon after eight hours of jury deliberations that started Monday.

Young’s lawyers, George Walker and Alan Dressler, immediately denounced the verdict as “internally inconsistent,� saying they plan to appeal the decision and to ask U.S. District Judge Dickran Tevrizian for a new trial before Young’s scheduled sentencing on March 17.

“I don’t think there’s any question the verdict was inconsistent,� Walker said. “I will tell you this: It strikes fear in the hearts of all those legislators back in Sacramento. This will cause a major tightening of legislators’ private business activities. All the legislators with outside employment are going to have to look hard and heavy at this case.�

Chief Assistant U.S. Atty. Richard E. Drooyan, who prosecuted the case, said he was “very pleased� with the verdict and added that the government is continuing its investigation of other California political figures linked to Moriarty, the former Orange County fireworks manufacturer now serving a seven-year prison term on corruption charges.

Young, 40, is the 11th defendant to be convicted in 12 government prosecutions resulting from the ongoing Moriarty probe, and he is the highest-ranking former elected official to be found guilty of corruption in connection with Moriarty’s widespread efforts to influence state politics.

Once the assistant majority leader of the Assembly, Young was chairman of the powerful Assembly Transportation Committee and enjoyed a reputation as one of the more successful political fund-raisers in the Legislature. Citing personal reasons, he decided not to seek relection in 1984 after his name was linked to the Moriarty case.

As he entered Tevrizian’s courtroom to await announcement of the jury’s decision, Young appeared more solemn than at any point during the monthlong trial. With him was his wife, Karen, who sat quietly, eyes shut and hands folded prayerfully as the jurors filed into the jury box.

Young, a Democrat who served in the Assembly from 1976 to 1984, had earlier vowed to hold a news conference after the verdict to denounce the government’s failure to prosecute any Republican legislators in connection with the Moriarty probe, but after the verdict, agitated at the results, he declined to comment.

“I think it sucks, that’s what I think,� his wife said.

Possible Sentence

The maximum possible sentence Young could receive on the five mail fraud counts is 25 years in prison. Actual sentences in the Moriarty cases so far, however, have ranged from three months to seven years.

Tevrizian thanked the jurors for the verdict and called the jury the most “conscientious� group he had seen in a dozen years as a state and federal judge.

“This was a trial that had the Legislature up and down the state looking over their shoulder,� the judge said. “I think justice was done in this case.�

Outside the courtroom, as Young and his wife hastily slipped away from reporters, U.S. Atty. Robert C. Bonner joined Drooyan and Chief Assistant Orange County Dist. Atty. Michael R. Capizzi, a special federal prosecutor in the Moriarty investigation, in hailing the verdict as a victory for the government.

“I don’t view it as any setback that the jury acquitted him on some of the counts,� Bonner said. “They convicted on enough counts to give us an appropriate range in terms of sentencing, and the conviction assists the ongoing Moriarty investigation simply because it puts the Young case behind us.�

Basis of Indictment

The first two counts in the 28-count mail fraud indictment against Young handed down last August charged him with failing to report outside income in 1981 and 1982 in annual statements of economic interest required by California law.

Young, who operated a consulting firm called Young Thinking Inc., while serving in the Legislature, also was accused of 16 mail fraud counts for failing to report his use of a leased Ford Bronco provided by Moriarty while crusading for legislation that would have legalized Moriarty’s “safe-and-sane� Red Devil fireworks throughout the state.

He was also accused of taking $10,000 in laundered funds from a Canadian cable television firm, Rogers Cable Systems, and another $19,000 in monthly payments from a Los Angeles cable company, Falcon Communications, while supporting legislation to deregulate the cable television industry in California. Checks from Falcon Communications were the basis for seven of the counts.

The last three counts in the mail fraud indictment were the campaign money-laundering charges, accusing Young of slipping laundered campaign funds from Moriarty to Democratic Assembly candidates in 1982 without telling them the true source of the money.

After their verdict, members of the jury said Tuesday that they had little difficulty in deciding that Young was guilty of the first two counts in the indictment because of his failure to report income from Moriarty and the cable companies on proper state forms.

Role in Laundering

They said it also was clear that Young had played a pivotal role in laundering campaign funds from Moriarty to the campaigns of Young and Assembly members Charles Calderon and Maxine Waters, both Los Angeles Democrats, in 1982.

The jurors added, however, that they believed Young’s consulting contracts with one of Moriarty’s real estate ventures and with Falcon Communications were legitimate business arrangements. Thus, they said, they decided to acquit on all 23 counts relating to the use of the Bronco and the monthly checks Young received from Falcon.

“We felt he clearly had failed to report income,� said jury foreman William Segal, 66, a West Los Angeles real estate broker. “But on the Bronco and Falcon charges, there basically was evidence indicating that Mr. Young had contracts to justify getting his payments.�

Both Segal and Oliver McFadden, 69, of Hollywood, a retired advertising executive, said jury members expressed some sympathy for Young during deliberations, taking the view that members of the Legislature are probably underpaid and should not be put in the position of having to rely on any outside income.

“They should do something to not put these guys in the position of having to start up a consulting company in the first place,� McFadden said.

Confrontation in Court

Young’s trial was highlighted by a courtroom confrontation between Moriarty and Young, who once enjoyed what they have described as a “father-and-son� relationship. Both took the witness stand--Moriarty as the government’s key witness and Young in his own defense.

Although jurors were instructed by Tevrizian to pay special attention to the believability of Moriarty, who is seeking a reduction in his sentence by cooperating with the government, Segal and McFadden said jurors spent little time debating his credibility.

They did note that Young, who compared Sacramento political life to military combat during three rambling days of defense testimony, was less than a totally credible witness in his own behalf.

“If we had found him completely truthful, I don’t think we’d have found him guilty on any counts,� said Segal.

Reaction to Young’s conviction on the five mail fraud counts was initially muted in Sacramento. Assembly Speaker Willie Brown (D-San Francisco), who once predicted that no members of the Legislature would be convicted in the Moriarty case, had no comment.

Expression of Regret

Sen. William Campbell (R-Hacienda Heights), who introduced fireworks legislation in the Senate in 1981 at Moriarty’s urging and who testified in the Young trial, called the outcome a disappointment.

“I regret that it happened,� Campbell said. “If we were able to point out one thing in the trial, it was that the bill in question was a meritorious piece of legislation in the best interest of the people of the state of California.�

Senate President Pro Tem David A. Roberti (D-Los Angeles), who also testified in the trial, said the verdict should not be construed as an indictment of other legislators.

“We are a cross-section of the people of California,� he said. “It is an indictment of Mr. Young and a conviction of Mr. Young. I would presume if one member of the press was convicted of libel, the entire press is not subject to an indictment on how they do business.�

“I regret when anybody is convicted of a crime such as that,� Roberti added. “Nevertheless, the case was Mr. Young’s case, and he’s got to live with it. There are 120 legislators who do their jobs and do them admirably.�

One legislator who seized the occasion to criticize Young was Sen. H. L. Richardson (R-Glendora), who was accused by Young in the trial of having forced Moriarty to retain his direct mail company, Computer Caging Inc., in exchange for a favorable vote on the 1981 fireworks legislation.

‘Turn Over Every Rock’

“I think more is out there,� said Richardson, who denied Young’s charges about a Moriarty shakedown. “I hope they keep going until they turn over every rock and get it all exposed. Corruption--it should be exposed and kicked out.�

In a reference to Young’s current career as a Sacramento lobbyist, Richardson added: “He won’t be lobbying for awhile. If he does he’ll be doing it from Leavenworth or Lompoc.�

While Young is the highest elected public official to be convicted so far in the Moriarty investigation, the probe also has resulted in the convictions of five city councilmen from Commerce, Carson and Long Beach.

Of the 12 defendants prosecuted so far, the only one who was not convicted was former Bank of Irvine Vice President Nelson Hallidy. Money laundering charges against Hallidy were dropped in 1985 after two successive jury trials ended in deadlocks favoring acquittal.

Contributing to this story were Times staff writers John Kendall in Los Angeles and Jerry Gillam in Sacramento.