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Date: 12-15-2022
Case Style:
United States of America v. Arman Gabaee
Case Number: 2:18-cr-00331
Judge: George H. Wu
Court: United States District Court for the Central District of California (Los Angeles County)
Plaintiff's Attorney: United States Attorney’s Office
Defendant's Attorney:
Arman Gabaee, 61, a.k.a. “Arman Gabay,” of Beverly Hills, was accused of offering to by a million-dollar home for a Los Angeles County public official for the official's assistance in securing a $45 million county lease for the developer..
Gabaee was a co-founder and co-managing partner of the Charles Company, a Hollywood-based commercial and residential real estate development firm. The then-county employee whom Gabaee bribed was Thomas J. Shepos, 72, of Palmdale. Shepos was a high-level official in Los Angeles County’s Real Estate Division involved in awarding contracts to real estate developers.
In the years leading up to his million-dollar bribe offer, from approximately 2010 to April 2017, Gabaee paid Shepos bribes and kickbacks of approximately $1,000 every month in exchange for county leases, preferential contract terms, non-public information and other benefits. Shepos began cooperating with the FBI in December 2016. From then until April 2017, Gabaee paid Shepos $6,000 in cash bribes during recorded meetings in cars, restaurants and men’s restrooms, prosecutors said.
After years of paying cash bribes, Gabaee in 2016 “sought to further exploit the corrupt arrangement, this time soliciting Shepos’s help obtaining a $45 million county lease for his Hawthorne Mall property – a lease he believed would increase the value of his property ten-fold,” prosecutors said in sentencing papers. In recordings, Gabaee offered to buy Shepos a million-dollar home in exchange for his assistance securing a 10-year, $45 million county lease for office space in the Hawthorne Mall, which Gabaee owned and was redeveloping. Gabaee admitted in his plea agreement to placing two offers on a Northern California home, first for $1,035,000 and later for $1,065,000, as a bribe for Shepos in exchange for the $45 million lease.
Wiretap calls showed that with a long-term, reliable tenant like the county anchoring the mall, Gabaee believed he could get bank loans to redevelop the property, attract other tenants, and ultimately increase the mall’s assessed value from $17 million to $500 million. With the county lease, Gabaee was considering selling the mall to capitalize on its increased value, wiretap calls showed.
“This defendant gamed the system during a seven-year bribery spree designed to expand his real estate empire,” said United States Attorney Martin Estrada. “The scheme culminated in a massive million-dollar bribe that was motivated by Mr. Gabaee’s immense greed. By facilitating this pay-to-play system, Mr. Gabaee undermined confidence in the integrity and fairness of our public institutions.”
Shepos pleaded guilty in November 2018 to one count of making false statements to federal investigators who were investigating his financial relationship with Gabaee and one count of subscribing to a false tax return related to payments he received from Gabaee. Shepos is scheduled to be sentenced on January 19, 2023.
The FBI investigated this matter.
Assistant United States Attorneys Lindsey Greer Dotson and Thomas F. Rybarczyk of the Public Corruption and Civil Rights Section prosecuted this case.
18:666(a)(2)
(a) Whoever, if the circumstance described in subsection (b) of this section exists—
(1) being an agent of an organization, or of a State, local, or Indian tribal government, or any agency thereof—
(A) embezzles, steals, obtains by fraud, or otherwise without authority knowingly converts to the use of any person other than the rightful owner or intentionally misapplies, property that—
(i) is valued at $5,000 or more, and
(ii) is owned by, or is under the care, custody, or control of such organization, government, or agency; or
(B) corruptly solicits or demands for the benefit of any person, or accepts or agrees to accept, anything of value from any person, intending to be influenced or rewarded in connection with any business, transaction, or series of transactions of such organization, government, or agency involving any thing of value of $5,000 or more; or
(2) corruptly gives, offers, or agrees to give anything of value to any person, with intent to influence or reward an agent of an organization or of a State, local or Indian tribal government, or any agency thereof, in connection with any business, transaction, or series of transactions of such organization, government, or agency involving anything of value of $5,000 or more;
shall be fined under this title, imprisoned not more than 10 years, or both.
Outcome: Defendant was committed to the custody of the Bureau of Prisons to be imprisoned for a term of FORTY-EIGHT (48) MONTHS. Special assessment of $100. Total fine of $1,149,000. Upon release from imprisonment, the defendant shall be placed on supervised release for a term of 2 years under the terms and conditions of the United States Probation and Pretrial Services Office and Second Amended General Order 20-04.
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