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By Brian Hews
A Hews Media Group-Community News investigation has found that Central Basin Municipal Water District (CB) General Manager Kevin Hunt was named in a 2006 civil complaint accused of scheming with convicted felon Albert T. (“Big Al”) Robles in illegally altering a contract so Hunt’s company Psomas Engineering could win a lucrative $2.3 million project from the city of South Gate and Robles could get massive kickbacks to funnel to himself and relatives.
In a settlement agreement forged just months later in 2007, and obtained exclusively by HMG-CN, Psomas paid an eye-popping $875,000 to settle with South Gate.
Psomas General Counsel Debra Lambeck, when contacted by HMG-CN, was not pleased that HMG-CN had a copy of the settlement agreement saying, “how did you get that, that’s really odd that you have that.”
The civil case was filed in October 2006 by the Los Angeles based law firm of Adorno, Yoss, Alvarado, and Smith, after Robles and his accomplices were found guilty by federal prosecutors in July 2005, each sentenced to ten years in prison.
The revelation could lead to the removal of the controversial GM who has recently engineered a takeover of the CB Board using questionable appointees, while allying himself with embattled Director Leticia Vasquez and President Bob Apodaca, who cost CB $670,000 to settle a sexual harassment complaint.
The 20-page complaint cited several violations of federal and state contract law including fraud and deceit, breach of fiduciary duty, breach of contract, and unjust enrichment.
The complaint blasted Hunt and Psomas saying they, “entered into a scam to deprive Southgate of honest services, made false statements and representations to Southgate intended to deceive the city, bribed a public official and otherwise engaged in fraud, deceit, and other illegal activities.”
There were four main parts of the scheme, all designed to get Robles his kickbacks, with Hunt his willing accomplice.
Hunt, according to the complaint, was responsible for:
1. Illegally altering the initial contract with Southgate
2. Misleading City officials during a special presentation
3. Executing illegal subcontracts
4. Checks made out to Robles’ cronies for later kickbacks.
1) The Beginning-Illegally Altering the Contract-
The scheme started in 2001 when Robles first enlisted Edward Espinosa and Angel Gonzalez to be the front men for his kickback plans.
Gonzalez, owner of Pyramid Press, was the longtime East Los Angeles political operative and convicted felon who plead down to a misdemeanor in 2001.
Gonzalez was involved with Ric Mayer, who was convicted on seven counts of felony electoral fraud in 2001 for lying about his place of residence to qualify for the South Gate ballot.
Espinoza was a New Jersey based financial consultant who marketed himself as a “political consultant and lobbyist.”
Robles, Espinoza, and Gonzalez created two shadow companies to receive money and funnel kickbacks to Robles; Espinoza’s was called EM Ventures, while Gonzalez’ was called Zoom Media.
Both listed themselves as “consultants” of their respective companies.
With the sham companies set-up, Robles ordered South Gate officials to publish a Request for Proposal for “Sewer Repair Program Management, Design and Construction Services.”
Hunt, who was a “Principal” of Psomas at the time and possessed complete negotiating and signing powers for the company, submitted his first bid for the project.
It is unknown if any other bids were submitted, but after Hunt submitted Psomas’ bid, Robles immediately began interacting with Hunt.
The complaint stated, “Hunt subsequently met on several occasions with Robles and Espinoza.”
Robles “directed Hunt to add two ‘options’ to the first original bid related to the procurement of federal and state grants and loans, as well as a community outreach provision.”
Espinoza would be tied to the grants option monies while Gonzalez would be the recipient of the community outreach monies.
Robles subsequently told Hunt that if “you wanted the sewer contract you must include Espinoza and Gonzalez as consultants.”
Hunt consented, without registering a formal objection, and included Espinoza and Gonzalez in Psomas sewer contract.
At this point Hunt became a willing partner in Robles’ scheme.
It was later proved that monies from the contract would be funneled to Espinoza’s company EM Ventures, and Gonzalez company, Zoom Media, ultimately meant for kickbacks to Robles, while also paying for a massive direct mail campaign, directed by Gonzalez and Pyramid Press, to fight a recall movement against Robles.
2) Lied to City Officials During Presentation-
In December 2001, Hunt made a “special presentation” of his first original bid to the South Gate Utility Authority (SGUA) during a special meeting.
Prior to that meeting, Hunt was told by Robles not to mention to the members of the SGUA during the presentation that Espinoza and Gonzalez were included as consultants in the contract.
According to the complaint, Hunt once again capitulated to Robles’ demands and purposely omitted Espinoza and Gonzalez from the entire presentation.
The next day Robles approved the $2.3 million contract.
3) Executed Bogus Subcontracts-
Hunt then submitted to Espinoza and Gonzalez “standard form subcontracts” used by Psomas in all their deals.
Espinoza and Gonzalez “became very angry” and refused to sign the Psomas subcontracts insisting that Hunt use their personal subcontracts.
Hunt asked Robles to intervene but Robles told Hunt to sign the contracts prepared by Espinoza and Gonzalez.
Hunt signed the subcontracts “in violation of Psomas’ own internal policy.”
Immediately after that, Hunt met with Robles to finalize the negotiations, with Robles asking Hunt to have Psomas ask the SGUA for the entire $2.3 million up front.
Hunt balked, but then told Robles, “I will ask for 20% up front.”
4) Kickbacks Begin-
The complaint stated that between 2002-’03 monies began flowing from SGUA, to Psomas, to Espinoza and Gonzalez, and finally to Robles.
Espinoza and EM Ventures received $235,000 from Psomas “which money Psomas received from the city.”
Espinoza paid Robles $140,000 of that money.
Later Gonzalez and Zoom Media received $260,000 from Psomas “which money Psomas received from the city.”
A large part of that money was used to fight the recall election against Robles and three other City Council members.
Indictments and Convictions-
The kickback scheme did not last long; in November 2004 Espinoza and Robles were indicted for violations of various federal laws, including mail and wire fraud, money laundering, and theft and bribery concerning programs receiving federal funds.
In April 2005 Espinoza pled guilty to mail fraud, wire fraud, money laundering, and in aiding in assisting in the preparation of false tax returns.
In July 2005 Robles was convicted and found guilty of 30 counts of bribery, money laundering and depriving the electorate of his honest services.
According to the criminal trial transcripts obtained by HMG-CN, Hunt implicitly admitted guilt saying, “ that he would testify that Robles asked Psomas to hire Espinoza and Gonzalez as a condition of being awarded the city contract and to use the money received from the city to pay Espinoza and Gonzalez for “little or no work.”
Later, Southgate filed the civil action against Psomas, implicating they were a co-conspirator with Espinoza, Gonzalez, and Robles.
The complaint against Psomas, and by extension Hunt, settled just months later, with Psomas paying the city of South Gate $875,000.
HMG-CN called Psomas and talked to General Counsel Debra Lambeck about Southgate, Hunt, the civil complaint (obtained by HMG-CN) and the criminal trial.
Lambeck stated, “there was only a criminal trial and that was against Robles.”
HMG-CN then informed Lambeck it had possession of the fully executed settlement agreement, where Psomas paid the SGUA $875,000.
An angry Lambeck snapped back, “that’s odd that you have that, how did you get that?”
HMG-CN received all documents in the mail, unsolicited.
“Is that normally how you get documents? “That’s really strange, regardless,” Lambeck said, “I was only here a week during that time.”
When informed that her signature was on the document, she became angrier asking, “Do you have the press release that was included as Exhibit A of the settlement agreement?”
“The press release indicates that Psomas did nothing wrong, and the City was happy with their services,” snapped Lambeck.
She would not answer why Psomas paid SGUA $875,000, and Lambeck would not answer any questions about Hunt.
When contacted by HMG-CN Hunt, who was given all documents related to the case, denied involvement saying, “I am not aware of nor was I involved in the civil suit. I did not alter contracts nor mislead City officials.”
Yet documents included with the complaint contained Hunt’s signature.
Hunt concluded his brief comment, implying involvement as described in the civil complaint saying, “I testified for the prosecution in the Albert Robles criminal trial, working with the FBI.”
Assemblywoman Cristina Garcia told HMG-CN, “I remain committed to my community and welcome effective transparency in all government business conducted on behalf of its citizens, should further actions be required of my position to ensure transparency and efficiency in the community I represent, I will not hesitate.”
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