L.A. city building inspectors arrested on suspicion of accepting bribes


L.A. city building inspectors arrested on suspicion of accepting bribes
FBI agents arrest Hugo Joel Gonzalez and Raoul Joseph Germain on suspicion of accepting thousands of dollars in bribes in exchange for approving and fast-tracking construction projects. The investigation began with a tip from a confidential informant last summer.
By Abby Sewell and David Zahniser, Los Angeles Times

April 9, 2011
Two Los Angeles city building inspectors were arrested Friday on suspicion of accepting thousands of dollars in bribes in exchange for approving and fast-tracking construction projects by signing off on inspections that in some cases never took place.

FBI agents arrested Hugo Joel Gonzalez, 49, of Eagle Rock and Raoul Joseph Germain, 59, of Altadena after an investigation that began with a tip from a confidential informant last summer.

The informant, a work site manager for a large residential property developer, was a participant in the sting operation, working with an undercover agent who posed as a contractor named "Manny Gonzalez."

Hugo Gonzalez accepted $9,000 in bribes from the undercover agent and informant, while Germain took $6,000 from the agent during the investigation, according to affidavits filed with the criminal complaints.

The case has the potential to reach far beyond the two arrests, the affidavits suggest. The informant spoke of paying as many as 40 monetary bribes to building inspectors and called the problem "systemic" at the city agency.

In some cases, the informant said, building inspectors accepted materials and labor for their personal homes. In one instance, the unnamed informant paid for an inspector's vacation, according to the affidavit.

The informant "never refused to pay a bribe in connection with any such property," because the payments were the only way to avoid delays and, with some inspectors, the "only way to pass inspections required in connection with residential construction projects," according to the affidavit.

The city workers inspected homes and duplexes in South Los Angeles

Attorneys for both defendants declined to comment. Assistant U.S. Atty. Joseph Akrotirianakis declined to say whether officials expect to make additional arrests as a result of the investigation.

Gonzalez and Germain were placed on paid administrative leave effective Feb. 28, roughly a month after the Department of Building and Safety received its own anonymous tip, city officials said. The department referred the matter to the LAPD and City Atty. Carmen Trutanich, said Robert "Bud" Ovrom, general manager of the Department of Building and Safety.

"We appreciate the involvement of the FBI, but we were already far down the road on this investigation before we learned of the FBI's involvement," Ovrom said.

Germain joined the department in 2005 and earns just over $90,000 per year. Gonzalez was hired in 2006 and earns nearly $88,000 annually. Both men were assigned to South Los Angeles and were responsible for evaluating elements of construction projects considered critical to the safety of a building's inhabitants, including the foundation, electrical wiring and fire alarms.

In some cases, according to the court documents, they signed off on permits without setting foot on the work site.

Council members said Friday they want to know if the city department has a deeper problem. Councilwoman Jan Perry, whose district includes part of South Los Angeles, called the allegations "deplorable" and said the residents deserve housing that meets the highest safety standards.

A spokesman for the Los Angeles Department of Building and Safety said his agency has determined that the homes at the center of the investigation meet safety standards.

If convicted, the two men face a maximum sentence of 10 years in prison and a fine of $250,000. Germain was released on a $100,000 bond on the condition that he resolve an outstanding warrant on a traffic ticket. Gonzalez, deemed a flight risk by the judge because of his frequent travel to Mexico, remains jailed.

According to the affidavit, Gonzalez told the informant to wire him money because he was in Colima, Mexico. During one recorded meeting with the informant, Gonzalez complained about a woman employed by the same contractor the informant worked for and said, "I'm telling you, I'll kill her and go back to Mexico."

In another recorded exchange, Germain advised the FBI's undercover agent — still posing as a subcontractor — to hide the fact that no inspections had been performed, going so far as to hand him a written cover story, according to the affidavit. Germain also said he was immune from disciplinary action from the Building and Safety Department because he already worked in the most undesirable part of the city.



Copyright © 2011, Los Angeles Times
Original Post
Monday, March 28, 2011Restaurant Owner Arrested For Bribing Health Inspector
Jacob Isakov, 26-year-old owner of Gan Eden restaurant at 74 West 47th Street, was arrested and charged with bribery last month when he attempted to bribe a Department of Health and Mental Hygiene Inspector according to the Department of Investigation. They alleged an investigator posing as a DOHMH inspector informed Isakov about violations at Gan Eden Restaurant, to which Isakov responded by trying to give him $100 to "look the other way."

The restaurant currently has an A rating with the DOHMH which was handed out in February 2010 and Midtown Lunch is a fan.
More arrests see link
City expands probe into corruption allegations at building agency
A federal grand jury has sent the Department of Building and Safety three subpoenas, including one seeking personnel records of at least 11 current and former employees. Last month, 2 inspectors were arrested on suspicion of accepting bribes.

By David Zahniser and Abby Sewell, Los Angeles Times
May 7, 2011
Los Angeles officials have significantly expanded their internal investigation into corruption allegations at the city's building department, driven by fears of a much wider pattern of wrongdoing.

In the month since two inspectors were arrested on suspicion of accepting bribes, the Department of Building and Safety has received three subpoenas from a federal grand jury, including one seeking personnel records for at least 11 current and former employees.

Two department employees have been placed on leave over the last week, pending an investigation, officials confirm. Department managers would not say whether that move was connected to the probe. In addition, the city's lawyers revealed that the department is the target of a lawsuit filed by a USC fraternity that claims it faced retaliation after refusing to pay bribes.

"Our investigation has expanded citywide," said William Carter, chief deputy for City Atty. Carmen Trutanich. "We're looking at all aspects of the inspection program."

Carter said city officials originally thought the matter was limited to the two men arrested last month: inspectors Raoul Germain, 60, of Altadena and Hugo Gonzalez, 49, of Eagle Rock. Germain pleaded guilty on Thursday to accepting $6,000 in bribes between November and January.

Both men were put on leave in February after the department received an anonymous tip and were fired this week, city officials said.

Between August and January, Germain and Gonzalez were secretly recorded during an FBI sting operation that involved an undercover agent who posed as a contractor working in South Los Angeles.

A confidential informant told the FBI that bribes are a "systemic" problem at the department, and described giving not just cash but free labor, materials, and in one case, a vacation, according to court affidavits. Meanwhile, Gonzalez offered his own suggestion that other employees were involved, the affidavit said.

In one recorded exchange, Gonzalez told the undercover agent that he normally demanded $2,000 to sign off on a building permit. But because the construction project under discussion was on 97th Street, and outside of his territory, Gonzalez said he would need $2,500 so he could pay a "tribute" to the building inspector responsible for that address.

"We have been working like that for a long time," the affidavit quotes Gonzalez as saying.

Gonzalez has pleaded not guilty but is considering changing that plea to guilty, said Jack Alex, his attorney. Gonzalez remains in custody and is considered by the presiding judge to be a flight risk because he owns a home and land in Mexico, Alex said.

Germain's attorney, Steven M. Cron, said he did not expect that his client would help with the investigation of other suspects. Since the arrests, two Building and Safety officials — general manager Robert "Bud" Ovrom and department spokesman David Lara — have been called to testify before the grand jury. Federal prosecutors instructed Ovrom to turn over records on any disciplinary action or internal investigation involving Gonzalez, Germain and at least eight other current or former department employees

In his monthly newsletter to the public, Ovrom apologized to residents, the City Council and Mayor Antonio Villaraigosa for what he described as "alleged outrageous violations of the public trust." And in an interview, Ovrom said his internal investigation has gone beyond South Los Angeles, where Germain and Gonzalez worked.

"I have been asked if [corruption] is systemic in the organization. I don't believe it is," he said. "But I do believe it is more than two employees. We definitely have more people under investigation." The city employs roughly 315 inspectors.

Neither Carter nor Ovrom would provide the names of individuals mentioned in the subpoena, other than Germain and Gonzalez. They also would not identify the two employees placed on leave. Prosecutors with the U.S. attorney's office declined to comment on the scale of their investigation.

The ongoing probe leaves open the possibility of lawsuits over the inspections handled by Germain and Gonzalez, who are accused of signing off on electrical work, foundations and fire systems — sometimes without showing up at the job sites. If more inspectors are implicated, more structures become vulnerable to challenge.

One lawsuit has already been filed by the Alpha Nu Assn. of Theta Xi, a USC fraternity on 28th Street. In documents filed in March, the group alleged that inspector Martin Hurtado held up approvals "any way he could" after his request for a "bribe" was rebuffed.

According to the suit, the Greek organization failed its plumbing inspection 20 times, each time with the same inspector.

"He requested unnecessary blueprints. He required the plumber to redo work that had been done correctly the first time. He would instruct the plumber to perform…tasks, then instruct the plumber to return the premises to the state they were before the task," the lawsuit states.

Hurtado could not be reached for comment. He has not been identified in affidavits or mentioned as a target of any federal investigation. Lara said his agency had not reached any conclusions about the lawsuit.

"We're rolling that into the ongoing investigation," he said.


Not all inspectors fall into the same category, and it would be unfair to tarnish all of them with the same characterization. But to those of us with dirty hands, or in the forensic field, none of this will come as a surprise.

I come across building after building where I can only shake my head and ask 'how this could happen' (a rhetorical question at best, since it is obvious the work in question was never inspected by the jurisdiction or anyone else).

BUT Owners don't sue the city or its personnel (because they know it's a long haul and unlikely to result in any recovery). So even egregious cases go undiscussed, with blame going to everyone but the inspectors that let the work slide.

Contractors (after being sued for the defective work) don't blow the whistle because they also know the outcome won't be a good one. They will probably end up having to do future jobs under the same inspector(s) or their compatriots - who all have long memories when it comes to contractors that stand up for themselves (read that "don't kiss ass").

At the heart of the problem: immunity for officials; underfunding (lack of time to do the job properly, leading to shortcuts); lack of training and/or properly qualified inspectors and managers; lack of managerial oversight; fear of inspectors' powers in the field; simple greed and/or laziness; etc. etc. etc. - the menu goes on.

Looking at history - the reason building inspectors were given authority was because the public came to distrust builders and the architects/engineers that were either not properly overseeing the work or were not experienced enough to understand if what was being constructed was correct or not.

Over time, AE's also seemed happy to abdicate their role (which had significant risk attached to it) in favor of others. In good times, when fees were coming in the door and there was plenty of design work around, letting field authority become the responsibility of others seen as a good risk avoidance practice. One reason for this was that AE's were increasingly desk-trained but had no callouses. They really did not understand how to put a building together - down to the nuts, bolts and thousands of other minutiae - so certainly were not 'smart enough' to play the role of inspector.

I have long thought we need to turn back to a system where AE's are better trained in hands-on aspects of the building industry, and then given the authority AND responsibility/liability that goes along with ensuring the job is done right.

In a sense this is happening in larger projects, where Owners are engaging field-hardened PM's/CM's or going the design/build route, where the 'managers' are held responsible for the competent completion of the product - and both the AE's and the building inspectors become irrelevant.

I'd be curious to hear from the inspectors and BO's on this site to obtain their input on the problem and potential approaches to a 'better way' to achieve superior results.

I once worked on the weekends for an Architect that bought corners lots and put up strip centers. His plans were always out there and hard to put things together. After about the 5th center we did for him we asked him to come and put together something he had drawn for us to construct and would not work (worked on paper not in the field). We bought him nail bags, a cord and power saw, hammer, speed square and a big Nail puller. After a day and a half of trying to get his design to work, he went back to his office redesign the beam connections and told his office person to place an ad for another Architect and mostly stayed in the field with us. We found having him in the field working beside us his building became so easy and a pleasure to put together.
Engineers, Architects and Inspectors need that field learning also as does the trade people today. Inspections are needed who ever does them, I have some property in another state and the inspector comes out at final and asks if the contractor used what was submitted and approved on the plan.
The septic system I paid dearly for started backing up only after 4 years of service, after uncovering the leach line I found I had a system that would handle maybe a two seater out house.
Your sunday commentary is very similar to my experience and I hold the same opinion on the issues.

Your commentary is nearly the same experience as mine except I took in a cereal box cardboard model of a victorian house roof to the design architect so he could work out the geometry.

I grew up in a general contracting and custom plumbing family business. Grandpa's California Contractor's License number was two digits. As soon as my parents would allow I went into the trades and worked with my uncles doing the custom plumbing, Grandpa passed on just before I started "real" work. I remember a phone call my Uncle asked me to make one afternoon to the City for requesting an inspection. His list of questions included "who is the inspector for this job"; poignantly I remember the reply "Jim, tell your Uncle Fred that he is the first inspector". There is a lot of message in that reply.

We need to get back to the trades and contractors taking responsibility for doing the work in code compliance in addition to the design professionals. Also, pride in your work goes a long way toward the tradesperson being code savvy and performing work at a higher skill level.

Adding to hil's observation about the history and impetus for permits and inspections. The inspectors were usually well trained trades people and could "peer" review the work they inspected. Currently inspectors are not as much trades people and they are trained in inspection only at an early stage in their career. This is one more piece in the mix.

So much for ruminations, I will chime in later with some opinions for better compliance.
Second L.A. building inspector to plead guilty to taking bribes

May 20, 2011 | 3:32pm
A second Los Angeles city building inspector has agreed to plead guilty to charges that he solicited and accepted thousands of dollars in bribes for signing off on permits for properties he had never inspected.

Hugo Joel Gonzalez, 49, of Eagle Rock signed a plea agreement Friday in which he admitted to taking $9,000 in bribes last year from an FBI informant who worked for a major residential developer and an undercover agent posing as a contractor.

In exchange for the money, Gonzalez signed off on permits for multiple properties in South Los Angeles that he had not inspected, according to court documents. In some cases, he went as far as having another inspector removed from a property so he could sign off on the inspections and take the bribe payments.

At one of those properties, Gonzalez said he would need $2,000 for himself plus a $500 "tribute" for the inspector normally responsible for that address, documents filed by the FBI state.

Gonzalez was arrested last month along with a second inspector, Raoul Germain, 60, of Altadena. Germain pleaded guilty May 5 to the same charge. Both inspectors have been fired.
Since their arrests, at least two more inspectors have been placed on leave by the Department of Building and Safety, which has received three subpoenas from a federal grand jury, including one seeking personnel records for at least 11 current and former employees

Gonzalez has remained in custody since his arrest. A judge deemed him to be a flight risk because he owns property in Mexico and had previously said he could flee there after committing a crime.

In one exchange with the FBI informant, according to an FBI affidavit filed in the case, Gonzalez said he was in Colima, Mexico, and would need money wired into his Wells Fargo account.

In another recorded exchange, Gonzalez complained about an employee of a real estate developer, saying he wanted to kill her and flee to Mexico.

When the undercover agent told Gonzalez he couldn’t do that, Gonzalez responded by saying that law enforcement would never find him.

"I’m telling you, man, I would ... kill her if I was in like my five minutes of craziness," the affidavit quotes Gonzalez as saying.

He will officially change his plea Monday before a judge.

The maximum sentence for the federal charge of accepting bribes is 10 years in prison, but in exchange for his guilty plea, prosecutors will recommend a lower sentence.

Gonzalez's attorney could not be immediately reached for comment.
FBI seeks wider probe of Los Angeles building department, confidential memo says
In a confidential memo to Mayor Antonio Villaraigosa, the department manager says federal agents are including supervisors in a bribery probe. The memo was sent by mistake to hundreds of other people
By David Zahniser, Los Angeles Times

May 31, 2011
The FBI probe into corruption at the Los Angeles Department of Building and Safety has expanded beyond rank-and-file inspectors to include the supervisors who policed their work, according to the agency's top executive.

In a confidential May 10 memo to Mayor Antonio Villaraigosa, General Manager Robert "Bud" Ovrom said FBI agents want to take their bribery investigation "as wide and as high as they can." Because supervisors are included in the probe, city officials expect to determine if "illegal collaboration or poor supervisory skills" contributed to the misconduct, he wrote.

Two field inspectors have pleaded guilty to charges that they accepted bribes in exchange for building approvals. The city's failure to detect those activities may have been, at least in part, the product of staffing cuts at his agency, Ovrom said in his memo, a copy of which was obtained by The Times.

With high-level managers leaving as part of the city's early retirement program, the department was "not always providing adequate training" to their replacements, he wrote. "It is bad enough that these incidents happened," Ovrom said. "It is perhaps even worse that our supervisors never caught this blatant illegal activity."

The nine-page memo offers fresh details on the federal and city investigations and a rare insight into a city agency trying to manage a fast-growing scandal. The report was supposed to be confidential but was sent accidentally by Ovrom to hundreds of Building and Safety employees, The Times learned. The department declined to comment on the investigation.

The inspectors who pleaded guilty, Raoul Germain and Hugo Gonzalez, were assigned to territory in South Los Angeles. Two others were placed on administrative leave as a result of the city's investigation, according to Ovrom's memo: Frank Rojas, a plan check engineer in the department's West Los Angeles office, and Samuel In, a code enforcement officer in the agency's Koreatown office.

In, who worked for the city for 37 years, filed for retirement May 6, two days after he was placed on leave, Ovrom informed the mayor. The department planned to keep secret the reasons In was placed on leave, the memo said. "As far as we are concerned, he has retired and that is all we will ever tell the media," Ovrom told Villaraigosa.

The Times attempted to reach In last week, but his voice mail was full. At In's Glendale residence, his wife said her husband was out of town and she did not know when he would return. He told the paper four weeks ago that he was retiring and had not been placed on administrative leave. Rojas could not be reached for comment.

In addition to the four employees who were either arrested or placed on leave, the department is looking at 10 more Building and Safety workers, Ovrom wrote. The federal grand jury has already instructed the department to turn over personnel records for 12 current and former employees, including Germain and Gonzalez.

According to an FBI affidavit filed in April, an informant told investigators that bribes were "systemic" at Building and Safety and described giving cash, building materials and even a vacation in exchange for city approvals. FBI agents launched a wiretap operation in August, sending an undercover agent to job sites to pose as "Manny Gonzalez," a construction contractor needing sign-offs from city inspectors.

In January, with the undercover sting operation in its sixth month, Building and Safety received an anonymous complaint about bribes at 52 construction sites, all of them in South Los Angeles.

The city's internal investigation began after the anonymous letter was received. It could expand, Ovrom wrote, to private contractors and land use consultants who have "an unusually high working relationship" with certain Building and Safety employees. "It takes two to tango," he wrote.

Ovrom also complained that since the FBI investigation was disclosed, the department had been "unsuccessful at staying in front of this story."

Building and Safety lost many of its top supervisors in the wake of the city's early retirement program, which slashed payroll costs by allowing 2,400 city employees to leave their jobs early with full pension benefits, 116 of them in Building and Safety.

"To the extent the problem is the result of poor supervisory skills, several factors probably contributed to that breakdown," Ovrom wrote. "Perhaps the most glaring is that during the last three years the department's workforce has been reduced by 150 positions."

Deputy Mayor Sarah Sheahan said in a statement that "more money is not the panacea" for the department. Villaraigosa has already called on Ovrom to make a series of changes, including the resurrection of an internal investigations unit.

"If Mr. Ovrom has an issue with supervisors, we expect him to solve it," Sheahan said. "The mayor expects every general manager to run a tight ship."

The culture of bribery in LA and other cities has an underlying foundation that has not yet been brought up in these articles (and others I've seen).

The inspection system as a whole has evolved to be problematic for contractors, because of the unique circumstances 'enjoyed' by field inspectors, and the high costs of any delay or sign-off issue on a job site.

Contractors are uncomfortable confronting inspectors even when they know the inspectors are wrong, are improperly interpreting or applying codes, or simply being difficult (because the have a 'thing' for the contractor).

Inspectors know they can demand pretty much whatever they want because any challenge to their 'authority' in the field means delays/disruptions and increased costs to the contractor. Contractors roll over at times when they feel they will be able to pass increased costs to the Owner under the label of changes by the AJH inconsistent with the plans and not under the control of the contractor.

BUT, when the contractor is in a situation where he cannot pass on increased costs, or will experience delays that he cannot recoup, it's easier to play the inspector's game. Not all contractors are willing to play. But there are enough out there that paying for signatures even when there has been no inspection is legend (not just in LA).

The other 'group' playing this game are the contractors that are incompetent, and simply pay inspectors to look the other way. Those of us in the forensic field far too often roll our eyes and ask, tongue-in-cheek, "how did this ever pass inspection?". Of course we already know the reason - it didn't pass inspection at all, it just got an initial on a field card.

You ask, what about the risks? Many contractors are content to install work they know is improper, hoping they will never be caught. The inspectors figure the contractors will not blow the whistle. Inspectors assume contractors also know they will need to deal with the same players on future jobs, and no contractor wants to be on the 'bad side' of an inspector.

That is not to say all inspectors are players. A few bad apples... you know the rest.


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