Liquor box with $100 bills: First trial in Huizar case opens

Former Los Angeles City Councilman Jose Huizar

June 15, 2022 5 AM PT

It was one of the more evocative scenes described by prosecutors as part of their City Hall corruption investigation: A political aide arrives at the home of a Los Angeles city councilman and presents him with a liquor box filled with cash.

George Esparza told prosecutors that in 2017, he took the Don Julio tequila box packed with $100 bills to the Boyle Heights residence of his boss, then-Councilman Jose Huizar. Esparza said the councilman initially told him to hide the cash and later hounded him for the money.

Now, the Bel-Air businessman accused of providing that cash is facing his day in court, in the first of three trials that make up the sprawling bribery and racketeering case against Huizar.

Lawyers for both sides delivered opening statements Tuesday in the case against Dae Yong Lee, a real estate developer accused of paying $500,000 to ensure that Huizar would clear the way for a 20-story residential tower planned by his limited liability company, 940 Hill.

Lee, also known as David Lee, has pleaded not guilty to bribery, wire fraud and one count of obstruction of justice. He is the majority owner of 940 Hill, which is also a defendant in the case.

Assistant U.S. Atty. Cassie Palmer told the jury that Lee provided the money to “grease the wheels” of city government. At the time, Lee had been facing a challenge to his project from a union group, which threatened to cause major delays and cost tens of millions of dollars, she said.

“The defendants took a path that was cheaper, that was faster, that was guaranteed,” she said.

Ariel Neuman, the attorney for Lee, told jurors that his client is a victim, someone who believed the $500,000 he had provided was going to a consultant performing legitimate consulting work. In their zeal to tackle public corruption, federal prosecutors “swept up someone who had no idea” that Huizar, Esparza and the others were engaged in a criminal enterprise, he said.

Prosecutors are going to present an “ugly, ugly story” about corruption, Neuman said. “None of it has anything to do with Mr. Lee.”

The trial of another developer in the case, Shenzhen New World I, is scheduled for October. Huizar’s trial is set for February.

Prosecutors say Huizar was in charge of a massive scheme in which he and others received lucrative favors from developers in exchange for sign-offs on their downtown high-rise projects. Huizar has pleaded not guilty to racketeering, bribery and other charges.

Lee’s company proposed its residential high-rise seven years ago, filing an application to build more than 200 apartments at Olympic Boulevard and Hill Street, in the South Park section of downtown. The planning department provided its initial approval of the project in 2016.

Weeks later, Creed LA, a group representing construction trade unions, filed an appeal of that decision, raising the possibility that the project would require a vote of the City Council.

Lee then turned to consultant Justin Kim for help in getting rid of the union challenge. Kim, a real estate appraiser, was a fundraiser for Huizar who knew City Hall — and had served at one point on the city’s powerful planning commission.

Prosecutors said Kim, while working for Lee, served as a go-between for Lee and the council office, arranging multiple “money drops.” Kim picked up cash from Lee and handed a portion of it over to Esparza, who was supposed to get it to Huizar, prosecutors said.

Creed LA — which represents plumbers, electrical workers and other construction trades — dropped its challenge of the 940 Hill project in March 2017.

Kim and Esparza pleaded guilty to corruption charges in 2020, admitting they were participants in a bribery scheme centered on Lee’s project.

In his plea agreement, Kim said he kept a $100,000 payment that was intended for Huizar in July 2017.

Neuman, the lawyer for Lee, told jurors that his client believed Kim was simply negotiating a resolution to the challenge filed by Creed LA, also known as the Coalition for Responsible Equitable Economic Development. Prosecutors have pinned their case on Kim — “a liar and a thief” who has repeatedly changed his story, Neuman said.

“This case is about a man, my client, who made the mistake of trusting the wrong person,” he said.

Images of a portion of a conversation between Justin Kim, George Esparza and David Lee.

Neuman said he intends for the defense to call as a witness Jeff Modrzejewski, Creed LA’s executive director. The defense also plans to call City Hall lobbyist Chris Modrzejewski, brother of Jeff Modrzejewski.

Chris Modrzejewski intends to assert his 5th Amendment right to remain silent, according to a recent filing in the case. A representative of Chris Modrzejewski declined to comment when reached by The Times.

On Tuesday, prosecutors began questioning FBI Special Agent Andrew Civetti, who has been deeply involved in the case and described his work extracting information from cellphones belonging to Esparza, Huizar’s special assistant. They also showed jurors photos of the liquor box and stacks of $100 bills taken by Esparza.

Prosecutors said Esparza kept extensive notes on the bribe money he was transporting.

At one point, he took a photograph of a napkin on which he wrote the words “Giving cash to CM Huizar 2/10/2017,” according to one recent filing.

Esparza was “a particularly meticulous record keeper,” Palmer said.