CommentsTHE VIEW FROM HERE - While the city of Los Angeles has long been a criminal enterprise, an intriguing question is whether Eric Garcetti is the actual LA Don or is there some power behind the throne?
A full list of Garcetti’s “crimes” is too long for one CityWatch article to enumerate. The quotation marks around “crimes” denote that no one has ever prosecuted Garcetti. Thus, he has never been convicted, but on the other hand, he has never been exonerated.
The Cesspool on Vine – Prototype for LA Frauds
The FBI cannot deny knowing the operant facts and having the key documents in the corruption surrounding 1601 N. Vine, Steve Ullman, the CRA, Hal Katersky and Eric Garcetti. Not only Yours Truly but others provided the FBI with the facts and documents.
Criminal fraud covers a variety of behaviors, one of which is when one makes a representation about the value of real estate while withholding contrary documents. In May 2006, the CRA and Garcetti received copies of two appraisals for the lot on the N/W corner of Vine and Selma. The May 23, 2006 appraisal commissioned by the CRA placed the value at Four Million Seventy Thousand Dollars ($4,070,000), but the developer’s May 25, 2006 appraisal placed the value at Five Million Four Hundred Fifty Thousand Dollars ($5,450,000,00). That was almost $1.4 M more than the CRA appraisal. Due to prior fraudulent appraisals submitted to the CRA, the CRA was not to rely on developer-seller appraisals. Because the property owner, Steve Ullman, had an unsavory history with the CRA, Ullman was persona non grata. Thus, Hal Katersky was misrepresented as the developer-seller to the CRA. Later the CRA admitted in an email that it knew that Steve Ullman was the actual owner.
Garcetti’s Fraud Was Simple
Councilmember presented only the $5.4 M seller/developer appraisal to the city council while concealing the CRA’s own $4 M appraisal. As a result, the city paid $1.4 M too high for the property. Thus, Garcetti’s buddy reaped an extra $1.4 M. Garcetti was the person in control who arranged for the extra $1.4 M; that’s control fraud. In retrospect, $1.4 M is small potatoes. (Almost $½ Billion disappeared in the Hollywood-Highland Project in Garcetti’s CD13.) Later, the CRA sold the Vine property back to the seller-developer for only Eight Hundred Twenty Five Thousand Dollars ($825,000.00). In the intervening years, Ullman-Katersky did not have to pay the mortgage or the taxes since the property was theoretically owned by the city’s CRA. This is another aspect of control fraud; as the person controlling the scam, Garcetti, caused the city to lose the tax revenue.
CRA’s Background Buying Property from Steve Ullman
In 1997 Steve Ullman owned a parking lot 1751 Argyle Street (Capitol Records) which he wanted to sell for $1.3 M or more.
“On November 24, 1997, the CRA entered into a Purchase and Sale Agreement with [Steve] Ullman Investments for a purchase price of $1,489,785 for the subject property. The only appraisal performed to date valued the subject property at $795,000.” October 30, 2000 memo from City Controller Rick Tuttle
Because Garcetti, who in 2001 became councilmember for CD13 where both the Ullman properties were located, is an extremely hands on guy, (just ask Rick Jacobs), he had to know about the Ullman 1997-1997 deal, which explains why Hal Katersky’s name, rather the “Steve Ullman,” was on the 2006 paperwork for 1601 N. Vine. The statute of limitations on real estate fraud had not run by 2010 as fraudulent scam extended over several years. As originally contemplated, the CRA sale of the property back to Ullman-Katersky in 2011 for only $825,000.00 was another step in the on-going fraud.
The Cesspool is Prototype for Future Frauds
The Garcetti-Ullman-Katersky saga is relevant as it is the pattern for the incessant real estate frauds which have plagued Los Angeles and turned Los Angeles into the nation’s most corrupt city. The city’s crimogenic nature has become so serious that it is driving people and businesses out of Los Angeles. Had law enforcement done its job back in 2000 with the Ullman Capitol Records parking lot sale, the corruption would have been stopped by 2000. Had the FBI acted in 2010-2011 with the dual appraisals for 1601 N Vine, corruptionism would not be our way of life.
Don’t be fooled by all the Faux FBI Investigations
When one looks at the FBI investigations, they appear tailored to protect Garcetti. January 28, 2019, CityWatch, Is the FBI-Huizar Probe a Sham to Protect Eric Garcetti? The most obvious aspect of the criminal enterprise is the criminal vote trading system at city hall where each councilmember has agreed to vote Yes for whatever project another councilmembers places on the city council agenda. By its nature the system trading agreement is reciprocal so that each Councilmember’s Yes Vote is given in return for all his/her projects will likewise receive all Yes Votes. Penal Code, § 86 unequivocally criminalizes the City Council’s vote trading system. The great benefit to the criminal element is that a developer only has to bribe one councilmember to be guaranteed unanimous approval.
In December 2016 when Judge Richard Fruin decided that the city council’s actions were de facto non-justiciable, he never said that the city council was not a criminal enterprise. He merely ruled it was above the law. While Los Angeles is a crimogenic city protected by a corrupt state judiciary, the state court’s decision is not binding on the Feds. January 17, 2019, CityWatch, Pay for Play, Vote Trading: Did Garcetti Want the Huizars Gone? The mere fact that twenty years ago the US Department of Justice placed the LAPD under a Consent Decree monitored by a federal judge shows that the Feds can act if they wish.
The Big Picture – Control Fraud
“Control Fraud” explains LA’s massive on-going fraud. “Control Fraud” is a simple term for a complex criminal operation. Best explained by William K, Black, federal regulator during the massive savings and loans frauds of the 1980's and author of the book, “The Best Way to Rob a Bank is to Own One,” control fraud means that whoever controls an organization commits the fraud. Whether it is a Wall Street corporation, a charity or a government entity, the person in charge commits the fraud by stealing from his own organization. The public generally thinks of fraud as embezzlement by low level employees, but with control fraud, the persons in control at the top are the looters.
The Cesspool on Vine and virtually every project in Los Angeles have been additional instances of Control Fraud, i.e., the developer frauds were controlled by City Hall. Hence, whoever controlled City Hall was the Big Cheese parceling out pieces of cheese to the other councilmembers and the developers. Garcetti began his control fraud career as councilmember for Hollywood’s CD 13 (2001-2013). Then, he became City Council President (2006-2012) where he could enforce the illegal vote trading system, and finally he become Mayor in 2013, while his Mini-Me, Mitchie O’Farrell, took over CD 13.
A thousand pages would not be sufficient to describe all the corruption which has permeated Los Angeles since Garcetti first became councilmember in 2001. As the above discussion of Steven Ullman and the appraisal frauds surrounding the Capitol Records parking lot fraud in 1997-1998 show, the city was already subject to fraud, but it was the traditional type where one individual rips off a larger organization. One could opine that the difference between the 1997-1998 Capitol Records appraisal and the 2006 Cesspool on Vine appraisals is that the second was run by the person in control of CD 13, i.e. Eric Garcetti. In 1998, the City Controller audited the CRA -- Steve Ullman deal. When it came to the Cesspool, City Hall orchestrated the fraud and then ran the cover-up. Hal Katersky was interposed as the owner-developer when in fact it was still Garcetti’s buddy Steve Ullman. In 2010 and 2011 after the dual appraisals were exposed and copies provided the FBI, CRA’s Tom Beezy disappeared. Mr. Beezy was pertinent since CRA records show that he had copies of both appraisals. Who caused him to be silent? Garcetti claimed not to know where CRA John Perfitt went even though he was a few miles down I-5 working for the City of Downey as director of economic development. Garcetti claimed that his own staffer, Allison Becker who had worked on the project while with Garcetti and later at the CRA, could not be found. The FBI accepted all these lies at face value. The 2011 Garcetti cover was laughable with the claim that there had been a 2006 reconciliation report which showed that the $5.4 appraisal was accurate. No one ever saw the reconciliation report. And if it had existed, which it never did, Garcetti still had a duty to disclose it to the city council in 2006
Ambassador to India?
This article has concentrated on the Cesspool on Vine because it exemplifies Los Angeles’ crimogenic nature under the sway of Eric Garcetti. The US Senate will have far more data on Garcetti’s behavior such as his fraudulent report to reduce the budget and size of the fire department and the June 2013 Civil Grand Jury Report which provided a solid foundation for a criminal Grand Jury investigation including the downsizing of the proposed 2 acre Hollywood Regional fire station to ½ acre as Garcetti wanted the proposed location, the Florentine Gardens, for a CRA development.
Whom is the FBI protecting -- Don Garcetti or is Garcetti a puppet for more powerful interests? Whichever is the case, is it wise to appoint as ambassador someone who is so liable to blackmail? If I know about crimogenic Los Angeles, surely Putin knows even more. Can the US global politics be so unimportant that the Senate would allow such a vulnerable person become ambassador to the largest democracy in the world who is a key player vis a vis China?
(Richard Lee Abrams has been an attorney, a Realtor and community relations consultant as well as a CityWatch contributor. The views expressed herein are his own and do not necessarily reflect the views of CityWatch. You may email him at [email protected])
