Contractors sentenced to prison for defrauding L.A. housing agency

Two brothers who participated in a scheme to defraud the Los Angeles housing authority of money earmarked for disabled, low-income residents were sentenced Monday to one year and nine months in prison.

Bennett A. Taracena, 31, and Diego L. Taracena, 36, each pleaded guilty to a single count of conspiracy stemming from a bribery case involving their brother, a construction supervisor at the housing authority from 2003 to 2007.

Federal prosecutors said Victor Taracena, 41, steered nearly $527,000 in construction contracts to four sham companies controlled by his brothers. The contracts included construction of wheelchair ramps and the installation of bathroom railings in housing projects.

The work was never performed, Assistant U.S. Atty. Bayron Gilchrist said. “There were a number of people that needed things that they did not get because of the defendants’ actions,” he told the judge.

Lawyers for the two Taracenas portrayed the scheme as one that was spearheaded by the oldest brother, who has been charged with bribery and is a fugitive. Both defendants told the judge they were sorry and said they wanted an opportunity to regain the public’s trust.

“I do understand that it is a lot of money,” said Bennett Taracena, a former warehouse manager and high school teacher. “But I am a good person and I have a lot to offer this world.”

The Times first detailed the scheme in 2007, reporting that Taracena oversaw the award of more than 150 contracts to companies his brothers created. The article found that seven other contracts worth $289,000 were awarded to politically connected firms that had ties to current or former Los Angeles City Council members from the Eastside.

Some of the losing bids in the contracting process came from firms whose principals said they had never actually bid on the projects and may have had their stationery used improperly.

Prosecutors alleged that the companies set up by the two Taracena brothers received checks from the housing authority, then kicked back roughly $100,000 to Victor Taracena. He wired at least $41,000 of that to a bank account in Guatemala, with at least $8,000 earmarked for the purchase of property there, according to a grand jury indictment.

Gilchrist had sought a sentence of 33 months for each defendant. But U.S. District Judge Percy Anderson imposed a lighter sentence after noting that both men had no criminal history and had been gainfully employed. “I think it’s highly unlikely you’ll find your way back here in front of me,” he told Bennett Taracena.

The two Taracenas were also ordered to pay nearly $527,000 in restitution to the housing authority. The agency had sued the three brothers and received a $605,000 civil judgment in 2010. So far, none of that money has been paid, Gilchrist said.

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-- David Zahniser at Los Angeles City Hall