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Inexplicable tax breaks for the wealthy: Investigation grows

August 3, 2012 |  8:16 am
Probe expands into the County Assessor

Former county property appraiser Scott Schenter, a subject of a corruption probe centered on Los Angeles County Assessor John Noguez, is suspected of engineering improper tax breaks for nearly a decade, according to documents obtained by The Times and interviews with former coworkers.

For months prosecutors have been investigating allegations that Schenter lowered tax bills for wealthy Westside property owners in a bid to drum up campaign cash for Noguez. Now that corruption probe has expanded to include tax reductions allegedly made by the appraiser long before Noguez was elected assessor in November 2010.

Retired assessor's office supervisor Dale Edgington said he warned several of his superiors in 2009 that Schenter was inexplicably lowering the assessed values — and by extension, property tax bills — on dozens of properties in Marina del Rey, Torrance and Redondo Beach. There is no indication the department took any action against Schenter based on those allegations.

One of the properties Edgington said he raised concerns about was the Jamaica Bay Inn, a waterfront hotel in Marina del Rey. Records show that it was assessed at $2.8 million in 2004. Then, as real estate prices were rising in the county, Schenter reduced the property's assessed value to $1.9 million in 2005 and $1.5 million in 2006, county tax bills show.

Schenter is the only person arrested so far as part of a wide-ranging corruption investigation focused on Noguez. Schenter faces up to 30 years in prison on fraud charges stemming from secret, improper tax breaks prosecutors say he granted wealthy property owners in Beverly Hills, Pacific Palisades and other Westside communities.

In an interview with The Times shortly before his arrest, Schenter said Noguez had promised him a promotion and then exerted pressure on him to raise campaign contributions. Schenter said he unilaterally reduced the value of some properties in an effort to generate donations to help Noguez retire debt from his campaign, which raised and spent more than $1 million while his closest competitor raised less than $50,000.

Noguez, who is on an indefinite paid leave of absence, has denied any wrongdoing. He has, however, acknowledged asking Schenter to help raise money and "check the status" of some of the properties whose assessed values the appraiser later reduced. Noguez denied offering Schenter a promotion.

Schenter, who spent more than a month in jail before prosecutors agreed to lower his bail from $1.5 million to $100,000, is now cooperating with the investigation and is likely to be one of the prosecution's star witnesses if charges are brought against others.

Schenter came under scrutiny shortly after an internal transfer in 2007. The employee who replaced him noticed suspicious values on properties his predecessor had handled, according to Edgington, who had been Schenter's boss in the mid-2000s. The replacement, Jason Scholz, recently appeared before a grand jury hearing evidence in the corruption probe. Edgington said he has been interviewed by prosecutors.

Schenter was suspended for a month in 2009 after a family member offered to buy a property he was responsible for appraising, sources said, a violation of the department's code of ethics.

There's no evidence that anyone made an effort to stop him from secretly altering property values until early last year, when a supervisor in Culver City caught him allegedly lowering assessed values improperly for Westside owners. Schenter resigned in lieu of termination in January 2011.


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Photo: Former county property appraiser Scott Schenter is suspected of engineering improper tax breaks for nearly a decade at the Los Angeles County Assessor's office. Credit: Al Seib / Los Angeles Times