DA lied to charge former Industry city manager after statute of limitations expired, lawyers say – Pasadena Star News

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Prosecutors lied about the timing of their investigation of former Bell and Industry City manager Paul Philips so they could charge him with embezzling public funds after the statute of limitations expired, his lawyers now allege.

The Los Angeles County District Attorney’s Office concealed the existence of a complaint filed by a citizen in December 2016 that Philips attorneys allege that a four-year deadline for indicting Philips ended in December 2020, according to a new case asking for the charges to be dismissed.

The courts have lost jurisdiction to prosecute Philips at this point, said Steve Cooley, a former LA County prosecutor serving as co-counsel on Philips’ legal team. In an interview, Cooley described his former agency’s case as “fatally flawed”.

“They falsely accused an innocent person and for some reason they inexplicably chose a date that was not consistent with the facts they were aware of,” Cooley said. “It is wrong, or totally incompetent.”

Paul Philips, former director general of the Cité de l’Industrie (archive photo)

The Los Angeles County District Attorney’s Office indicted Philips in August, alongside developer William Barkett, attorney Anthony Bouza and former State Senator Frank Hill, over their respective roles in the potentially fraudulent treatment of $ 20 million paid by industry for the development of a farm solar project on Tres Hermanos Ranch, a 2,500-acre strip of ranch land straddling the borders of Diamond Bar and Chino Hills. The project never saw the light of day and how the funds were spent is now in question.

Prosecutors allege that Barkett, in particular, altered and siphoned off $ 8.3 million from funds for his personal benefit. Philips’ accusation appears to stem from his role in disbursing the funds, but prosecutors have yet to detail how he allegedly broke the law.

Philips pleaded not guilty when arraigned in September. Bell, where he worked as a city manager at the time, prematurely terminated his five-year contract following his arrest.

Quarrel over the date

In the criminal complaint, prosecutors said they only discovered the alleged crimes on October 12, 2017, following separate investigations by Industry City Prosecutor James Casso and DA investigator. Mary Cenovich. On the same date, the city industry council ratified a one-year lease agreement authorizing payments to the solar developer for the first time in public. The industry had previously lent $ 14 million in secret to developers without disclosing it in open session.

Philips’ other lawyers, James Murphy and Joseph Weimortz, said the citizen’s complaint a year earlier alleged “municipal malfeasance in the city of industry” involving Hill and Philips. The statute of limitations for embezzlement of public funds is four years in California, and the period began after investigators received the complaint, Murphy and Weimortz argued in their case.

“The reason for this omission is clear, the people realized they had a statute of limitations problem and improperly alleged a toll date in order to bypass the clear jurisdictional issue,” they wrote.

A spokesperson for the prosecutor’s office declined to comment. Reached by phone, Casso, the municipal lawyer for Industry, also declined to comment.

The case is due to be heard on October 20 at a preliminary hearing for Philips.

A former energy consultant filed a complaint

A copy of the citizen’s complaint was not immediately available from Philips lawyers or prosecutors. The complaint was filed by Richard Mrlik and allegedly accused Philips of lying to the town’s lawyer, according to a summary included in the petition. Mrlik could not be reached.

Mrlik’s company, Intertie, served as an energy consultant to the industry for nearly a decade until a tumultuous election in 2015 toppled most of the existing board members and led to his replacement. . In 2013, Mrlik wrote a note warning the city against entering into a 65-year lease with Barkett to develop an earlier iteration of the solar project.

Mrlik felt the deal was one-sided in Barkett’s favor and that it “would load the city with an unacceptably high level of risk,” according to the memo. Its report alleged that Barkett had inflated the ROI to double the going rate of other similar projects and warned that the developer’s “significant management fees” were adding to the city’s risk.

The industry rejected Barkett’s proposal in 2013, in part because of Mrlik’s memo, but the 2015 election shifted power to a new roster of officials with a different perspective on the project.

Hill, the former state legislator, had gained considerable influence with the fledgling council and again pitched the idea to more favorable results. City officials now allege that Hill played both sides, receiving an advisory fee from a city contractor to oversee the project, while also owning a stake in the development company.

Secret negotiations

The new city council, which hired Philips to run the city’s day-to-day operations, began negotiating in secret with Barkett and approved the first lease in a closed-door meeting in May 2016. It took nearly a year for the public to become aware of the development, which sparked lawsuits and a setback from Diamond Bar and Chino Hills.

Investigations by the Southern California News Group revealed discrepancies in Barkett’s claims to the city for reimbursement, including payments without vouchers, amended invoices, and records showing a mix of company and government funds. city. Instead of scrutinizing the deal further, Industry restructured its multi-million dollar advances into a “loan” that would only have to be repaid if the project were to go ahead.

The city council, which until then had supported the project, deteriorated at the end of 2017 and began to wonder about the destination of the money. This ultimately led to the ousting of Philips, Bouza, and essentially anyone with ties to the project or Hill. The industry filed a civil lawsuit against Barkett and Hill, and their companies, in 2019 in an attempt to recoup the $ 20 million investment. Tres Hermanos is now owned by a conservation authority.

The Southern California News Group later found out that Barkett owed Bouza $ 1.5 million, the lawyer who negotiated the terms of the lease on Industry’s behalf.

Bouza, who would never have disclosed the conflict to the city, is accused of embezzlement and several counts of conflict of interest. In a civil case, the town’s lawyer alleged that Barkett orchestrated the hiring of Bouza to limit oversight of the project.

Hill and Barkett were scheduled to appear for arraignment on October 27. Bouza’s indictment is delayed until December.

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