Prosecutors lied about the timing of their investigation of former Bell and Industry City Manager Paul Philips so they so they could charge him with misappropriation of public funds after the statute of limitations had already expired, his attorneys now allege.
The Los Angeles County District Attorney’s Office hid the existence of a citizen’s complaint submitted in December 2016 that Philips’ attorneys allege started a four-year deadline to charge Philips that ended in December 2020, according a new filing motioning for the charges to be dismissed.
The courts lost jurisdiction to prosecute Philips at that point, said Steve Cooley, a former L.A. County district attorney serving as co-counsel on Philips’ legal team. In an interview, Cooley described his former agency’s case as “fatally defective.”
“They falsely accused an innocent person and, for whatever reason, they inexplicably picked a date that was inconsistent with the facts known to them,” Cooley said. “That is reprehensible, or wholly incompetent.”
The Los Angeles County District Attorney’s Office charged Philips in August, alongside developer William Barkett, attorney Anthony Bouza and former state Sen. Frank Hill, for their respective roles in the potentially fraudulent handling of $20 million paid by Industry toward the development of a proposed solar farm on Tres Hermanos Ranch, a swath of 2,500 acres of ranch land straddling the borders of Diamond Bar and Chino Hills. The project never broke ground and how the funds were spent is now in question.
Prosecutors allege Barkett, in particular, altered and siphoned $8.3 million of the funds for his personal benefit. Philips’ charge appears to stem from his role in the disbursement of the funds, but prosecutors have yet to detail how he is alleged to have broken the law.
Philips pleaded not guilty during his arraignment in September. Bell, where he was working as city manager at the time, ended his five-year contract early, as a result of his arrest.
Squabble over date
In the criminal complaint, the prosecutors stated they did not discover the alleged crimes until Oct. 12, 2017, following the completion of separate investigations by Industry City Attorney James Casso and D.A. investigator Mary Cenovich. On that same date, the Industry City Council ratified a year-old lease agreement authorizing the payments to the solar developer for the first time in public. Industry had already loaned $14 million in secret to the developers without disclosing it in open session.
Philips’ other attorneys, James Murphy and Joseph Weimortz, stated the citizen’s complaint a year earlier alleged “municipal malfeasance in the City of Industry” involving Hill and Philips. The statute of limitations on misappropriation of public funds is four years in California and the timer started once investigators received the complaint, Murphy and Weimortz argued in their filing.
“The reason for this omission is clear — the People realized they had a statute of limitations problem and improperly alleged a tolling date in order to sidestep the clear jurisdictional issue,” they wrote.
A spokesperson for the D.A.’s Office declined to comment. Reached by phone, Casso, Industry’s city attorney, also declined to comment.
The matter is set to be heard Oct. 20 during a preliminary hearing for Philips.
Former energy consultant filed complaint
A copy of the citizen’s complaint was not immediately available from either Philips’ attorneys or the prosecutors. The complaint was submitted by Richard Mrlik and reportedly accused Philips of lying to the city’s attorney, according to a summary included in the motion. Mrlik could not be reached.
Mrlik’s company, Intertie, served as an energy consultant for Industry for nearly a decade until a tumultuous election in 2015 ousted most of the sitting council and led to his replacement. In 2013, Mrlik wrote a memo cautioning 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 would “burden the city with an unacceptably high level of risk,” according to the memo. His report alleged Barkett inflated the return on investment by as much as double the going rate of other similar projects and warned that the developer’s “sizable management fee” added to the city’s risk.
Industry rejected Barkett’s proposal in 2013, in part because of Mrlik’s memo, but the election in 2015 shifted power to a new slate of officials with a different perspective on the project.
Hill, the former state legislator, had built up considerable influence with the fledgling council and pitched the idea again to more favorable results. City officials now allege Hill played both sides, collecting a consulting fee from a city contractor tasked with overseeing the project, while also having an ownership stake in the development company.
The new City Council, which hired Philips to lead the city’s day-to-day operations, began negotiating with Barkett in secret and approved the first lease during a closed session meeting in May 2016. It took almost another year for the public to become aware of the development, which sparked lawsuits and pushback from Diamond Bar and Chino Hills.
Investigations by the Southern California News Group uncovered discrepancies in Barkett’s requests for reimbursement from the city, including payments without supporting documents, altered invoices and ledgers that showed intermingling of company and city funds. Instead of scrutinizing the deal more, Industry restructured its multimillion-dollar advances into a “loan” that would need to be repaid only if the project broke ground.
The City Council, which up to that point had supported the project, soured on it in late 2017 and began asking questions about where the money was going. This eventually led to the ouster of Philips, Bouza, and essentially anyone else who had ties to the project or Hill. Industry filed a civil lawsuit against Barkett and Hill, and their companies, in 2019 in an attempt to claw back the $20 million investment. Tres Hermanos is now owned by a conservation authority.
The Southern California News Group later discovered that Barkett owed $1.5 million to Bouza, the attorney who negotiated the lease’s terms on Industry’s behalf.
Bouza, who is alleged to have never disclosed the conflict to the city, is charged with misappropriation and multiple counts of conflict of interest. In a civil case, the city’s attorney alleged Barkett orchestrated the hiring of Bouza to limit oversight on the project.
Hill and Barkett was scheduled to appear for arraignment Oct. 27. Bouza’s arraignment is delayed until December.
Source : https://www.ocregister.com/2021/10/15/da-lied-to-charge-former-industry-city-manager-after-statute-of-limitations-expired-attorneys-allege/1312