South Bay Developer Pleads Not Guilty To Laundering Campaign Cash

PALOS VERDES, CA – A real estate developer from Palos Verdes Estates – whose $72 million apartment complex in the Harbor Gateway area was approved three years ago by the Los Angeles City Council – pleaded not guilty Monday to using straw donors to channel tens of thousands of dollars to more than a six local politicians' campaigns.

Samuel Leung, 67, is charged with one felony count each of conspiracy to commit campaign money laundering and offering to bribe a legislative body member. He faces up to four years and eight months in prison if convicted as charged.

Leung has remained free on his own recognizance, thanks to Los Angeles Superior Court Judge Teresa Sullivan, despite objections from the prosecution. The defendant is scheduled to return to court on Aug. 2 to get a date for a preliminary hearing that will determine whether there is sufficient evidence to proceed to trial. The preliminary hearing is expected to take as long as four weeks, according to the attorneys involved.

Leung's secretary, Sofia David, 58, is charged with a felony count of conspiracy to commit money laundering, which carries a maximum penalty of three years behind bars. A warrant was issued for her arrest in February and she did not appear in court Monday morning.

The felony complaint alleges that Leung and David "caused multiple individuals working for Leung along with Leung's business partners, Leung's relatives, and relatives of Leung's employees and business partners, to make campaign contributions to Los Angeles area politicians with the power and ability to change zoning rules, specifically an industrially-zoned property located at 1311 W. Sepulveda Blvd., Los Angeles, which Leung wished to develop into an apartment complex."

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The complaint alleges that the contributions included payments to candidates for office, re-election campaigns and payments to political action committees and office holder accounts, including the campaigns of then-Los Angeles City Councilwoman Janice Hahn, who is now a county supervisor, City Council members Joe Buscaino, Mitch Englander, Jose Huizar, Gil Cedillo and Nury Martinez, and an independent political action committee that supported Mayor Eric Garcetti.

The complaint also alleges that Leung and David "caused multiple campaign contributors in Los Angeles County to be unlawfully reimbursed for their campaign contributions," and that Leung used pseudonyms and aliases, as well as a co-worker's identity without her knowledge or permission, to make campaign contributions between 2009 and 2015 to current and prospective Los Angeles-area politicians "who had the power to vote on zoning rules affecting property he owned."

The prosecution alleges that tens of thousands of dollars were contributed by more than two-dozen people and companies connected to Leung over a seven-year period beginning in 2009.

State law bars contributions to a political campaign using someone else's name.

Leung's 352-unit Sea Breeze project was eventually approved by the Los Angeles City Council in February 2015. Garcetti and the City Council overruled planning commission officials in changing zoning rules to allow the project to move forward.

An investigation by the Los Angeles Times identified some of the donors as being working-class residents without the obvious financial means to pay $500 or more to a political campaign. Leung told the newspaper that he did not reimburse any campaign contributions and declined to comment further.

The state's Fair Political Practices Commission opened an investigation into the campaign contributions after receiving a complaint letter in October 2016.

Leung has been ordered to surrender his passport and not to travel outside the seven counties of Southern California, and defense attorney Daniel Nixon told the judge that his client has complied with that order.

City News Service and Patch staffer Emily Holland contributed to this post; Image via Shutterstock