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New motions alleges mail fraud, breach of contract, negligence and several other charges.
By Brian Hews and Brian Hews
New motions to add additional parties and allegations to the lawsuit filed against Greuel Campaign Director John Shallman was filed on Tuesday by the campaign attorneys of Los Angeles City Attorney Carmen Trutanich alleging that Shallman and several of his associates engaged in promissory fraud, unfair business practices negligence and swindling when Trutanich was a candidate for District Attorney back in June of 2012, Los Cerritos Community Newspaper has learned exclusively.
The 200 plus page motion was filed on Tuesday morning in Los Angeles Superior Court by Trutanich attorney’s Steven T. Lowe and Kris LeFan with the West Los Angeles law firm of Lowe Law.
The motions allege that Shallman “grossly mismanaged and squandered campaign funds, and otherwise engaged in questionable and unethical practices.
One of the instances cited in the motions alleges that Shallman hired Patricia Duchene of RED Mailing to print and mail campaign advertisements to 254,000 voters, charging $146,160.72. The suit contends that if Shallman had done the mailings “in house” the cost would have been significantly less. The checks written to Duchene by Shallman total $164,344.21, while the Duchene invoice is for only $146,160.72.
In addition to RED, the attorneys have documentation that shows checks written by Shallman to vendors for payment of services with Shallman asking for reimbursement later. Some of those reimbursements did not match the original check. “Usually you submit a check request to the campaign, and the campaign writes the check,” said one local CPA, “this is not good business practice and lends itself to abuse.”
Shallman is the chief political consultant to current Los Angeles City Controller Wendy Greuel who is embroiled in a heated four-way race for Mayor of Los Angeles with former Federal Prosecutor Kevin James and Los Angeles City Council Members Jan Perry and Eric Garcetti.
Also targeted in the new motions is Shallman Communications, his wife Lani Shallman who oversees West Coast Public Affairs, television advertising firm Buying Time LLC, Tom Berman, David Jacobson, Jennifer Rivera along with Patricia Duchene.
The motions will be heard in Department 32 in Los Angeles Superior Court on Tuesday March 5, which ironically is the day voters in Los Angeles will head to the polls.
Trutanich finished third in a heated primary for Los Angeles County District Attorney against eventual winner Jackie Lacey and runner up Prosecutor Alan Jackson. The original lawsuit alleges that the Trutanich campaign paid at least $884,000 to Shallman, his wife Lani, and the other defendants to provide “consulting and related services.”
Lowe and LeFan also contend in the motions that Shallman paid an additional $100,000 directly to “third party vendors” and also claimed they failed to substantiate multiple expenses in the amount of $166,460.51.
Although the Trutanich campaign had raised $1,800,000, nearly three times more than Lacey or Jackson, Trutanich ultimately failed to qualify for the General Election due in a large part to the negligence and missteps of Shallman, his wife Lani, Jacobson, and the other defendants, the law suit claims.
“Despite repeated demands, the Defendants have failed and refused and continue to fail and refuse to provide readily available documentation to substantiate campaign expenses and many expenses appear substantially inflated including those of Putnam, Buying Time and Duchene,” the law suit states.
When Los Cerritos Community Newspaper contacted Lowe about the specifics of the case he responded: “Sorry, I can’t comment. It’s not Lowe Law policy to litigate matters in the press. The filed documents speak for themselves. All I can say is we believe in our judicial system and are confident a just result will be achieved. We’re grateful for the interest and appreciate your understanding.”
LeFan also told LCCN that, “Mr. Lowe as well as Mr. Trutanich have given me specific orders to seek the truth. I’m not allowed to engage in any legal wrangling, posturing or publication of hyperbole or even innuendo. Lowe Law will leave it to the Shallman camp if they want to try and use the press as a sword. I’ll save my comments for the jury. If you want anything more, I simply direct you to the documents filed with the court as they indicate obvious misappropriation and mismanagement of campaign funds and are a matter of public record, anyway.”
LCCN attempted to contact all defendants and Ms. Greuel, none of the phone calls was returned.
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