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Pot dispensary corruption probe spreads to Santa Fe Springs

June 28, 2012 |  6:25 pm

Photo: Joseph Serrano Sr. Credit: Ruben Vives / Los Angeles Times
A federal corruption probe involving alleged bribes paid to officials by medical marijuana dispensaries spread to a second city on Thursday as officials announced charges against a Santa Fe Springs councilman.

Joseph Serrano Sr. agreed to plead guilty to one federal count of felony bribery in connection with allegations that he repeatedly shook down a dispensary operator who was working as an FBI informant.
According to the plea agreement released Thursday, Serrano took a total of $11,500 in payments in 2010 and 2011 in exchange for promises that he would work to stave off attempts by the city to shut down dispensaries.

The revelation came less than a week after three current and former city officials in nearby Cudahy were arrested on strikingly similar accusations. Council members David Silva and Osvaldo Conde and former head of code enforcement Angel Perales are accused of taking $17,000 in bribes from a dispensary owner, also working as an FBI informant, in exchange for their help in opening a new clinic in Cudahy.

DOCUMENT: Read the plea agreement

Those arrests appear to be part of a larger investigation that includes allegations of election fraud in Cudahy, along with mentions of further corruption involving a towing company and a sheriff’s deputy.

“Certainly our efforts to continue to investigate bribe taking are not over,” said Assistant U.S. Attorney Margaret L. Carter, who declined to comment on whether more arrests are expected.

The unnamed informant in the Cudahy case was described as the operator of a dispensary in another city in southeastern Los Angeles County, where he had “paid more than $10,000 in bribes to [an] official over the course of several months” and received a cease-and-desist letter from the city.

The circumstances match those described in the Santa Fe Springs case, but officials would not say whether the informant in the two cases was the same.

Serrano’s plea agreement showed the brazen extent to which he negotiated the cash bribes even after he had been interviewed by FBI agents probing corruption allegations.

At times, his appeals for payment took a desperate tone. At one point, Serrano asked the dispensary owner if they could set up a monthly payment plan of at least $1,600 -– the amount of Serrano's mortgage.

The relationship between the two began in 2010, as the city was considering a ban on dispensaries. Serrano promised to feed the dispensary owner information and use his influence to help his shop stay open. According to the plea agreement, Serrano claimed to have control of the vote of one of the other council members.

The bribe payments began with a check for $1,500 that Serrano said he needed for a relative's medical bills. The payment was made to look like a loan. Shortly after, according to the document, the dispensary owner became an FBI informant. Over the next six months, in recorded meetings, the informant paid Serrano $10,000 in cash.

During that period, Serrano was interviewed twice by FBI agents who asked him about his interactions with dispensary operators. On May 2, according to the plea agreement, Serrano assured agents that he had never received any gifts or payments from marijuana clinic owners, except for gift cards from one clinic's landlord, which he said he had donated to charity.

The next day, Serrano met with the informant in a car outside a Sizzler restaurant in La Mirada and took a $1,700 cash payment.

Despite the bribes, the city moved to shut down all marijuana clinics in town, sending out orders for them to shut down by Sept. 26, 2011.

Serrano’s attorney, Dominic Cantalupo, declined to comment.

Santa Fe Springs officials condemned Serrano, but asserted that the corruption was isolated.

“The government of Santa Fe Springs is clean and transparent,” Mayor Bill Rounds said. “We play by the rules. We take seriously our moral and ethical responsibilities and the trust that has been conferred on us by the community. Councilmember Serrano's alleged actions do not at all represent the city or any other city officials, elected or otherwise."


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Photo: Joseph Serrano Sr. Credit: Ruben Vives / Los Angeles Times