Affidavits Reveal Details of Alatorre Inquiry

Former Los Angeles City Councilman Richard Alatorre allegedly extorted tens of thousands of dollars from the owner of an 1,100-unit apartment complex who feared Alatorre would report building code violations, according to federal court records unsealed Wednesday.

Alatorre pleaded guilty this week to felony tax evasion, admitting that he accepted $42,000 in unreported income from people seeking his influence as a councilman and member of the Metropolitan Transportation Authority board.

But the unsealed court documents offer the first details of a four-year federal corruption probe. Although Alatorre agreed to plead guilty, the investigation is continuing.

FBI affidavits in support of search warrants issued last year show the scope of the corruption investigation and how it entangled a number of business and political players.

Investigators now are focusing on “third party” individuals suspected of offering bribes and other forms of influence, according to sources.

A spokesman for the U.S. attorney’s office said Wednesday that he could not comment on which, if any, of the Alatorre associates named in the affidavits are under investigation.

Among those mentioned in court papers are attorney Neil Papiano, who represents interests in Hollywood and at City Hall; prominent restaurateur Andy Camacho; a firm that has operated the city-owned Greek Theatre; Samuel S. Mevorach, a developer and former owner of one of the largest apartment complexes in the city; and Frank Alderete, former president of the Los Angeles County Board of Education.

Papiano said Wednesday that he did nothing wrong. Alderete, Camacho, and James M. Nederlander--president of J. Ned Inc., which has operated the Greek Theatre--and other company officials did not return phone calls seeking comment. An attorney representing Alatorre and his wife, Angie, said neither he nor the couple wished to comment.

The investigation began with allegations that Alatorre used his role as an MTA board member to steer business from contractors to his wife’s event-planning firm and to two charities that he helped form.

The FBI and the Internal Revenue Service joined the probe in 1997 after The Times documented questionable financial dealings between Alatorre and Mevorach. The councilman had been strapped for cash to buy a home in Eagle Rock. Mevorach needed Alatorre’s help to complete the $91-million sale of his sprawling Boyle Heights apartment complex, a transaction that required city approval and financing.

Mevorach provided a key break in the investigation under an immunity deal, the affidavits show. He described the alleged extortion scheme that also involved Alderete, Alatorre’s childhood friend, who was appointed to the county education board in 1985 and served until 1996.

Mevorach told investigators that Alatorre solicited either directly or through Alderete about $45,000 in cash and checks from mid-1995 to late 1997. He said he provided the money to stop the lawmaker from killing the sale of his lead-contaminated complex.

“Mevorach stated that he feared Richard Alatorre and Frank Alderete might report him to various government agencies for building code violations,” according to the affidavits.

Alderete, now a business administration instructor at East Los Angeles College, allegedly delivered most of the payments to Alatorre. The first alleged payment came in December 1995, when Mevorach gave Alatorre a wrapped Christmas box crammed with 2,000 one-dollar bills, according to court records. Mevorach said Alderete later would call, saying the councilman needed more money, according to court records.

Mevorach said he would meet the two men at the Pacific Dining Car restaurant near downtown, as well as at Carrows and Coco’s coffee shops, where he would hand the money to Alderete, rather than to Alatorre. But, “on one occasion, in front of Mevorach, Alderete hid the cash envelope in a newspaper and handed it to Richard Alatorre,” an affidavit states.

When investigators confronted Alderete, he admitted one transaction--handing $7,000 in an envelope to Alatorre on a Highland Park street corner in June 1996, court records say.

Alatorre and Alderete also exerted “great pressure” on Mevorach in 1996, according to court records, to help Alatorre sell a condominium whose value plunged in the real estate slump of the early 1990s. Alatorre needed money to buy a larger, hillside home in Eagle Rock.

Mevorach first arranged a sham lease for the condominium that helped the Alatorres get a home loan, court records show, and the councilman later closed escrow with a suspicious infusion of cash.

To explain some of that cash, Camacho wrote a letter to the bank saying he had hired Alatorre’s sons as consultants, paying them $18,000, according to court records. “Camacho admitted that the information contained in the letter to [the] bank was false,” an affidavit says.

Camacho, who owns city concessions on Olvera Street, told investigators that Alatorre asked him to write the letter.

Investigators looked into possible obstruction of justice by Papiano and Angie Alatorre. She allegedly provided false information about her earnings as a consultant to J. Ned, according to court records.

Authorities had subpoenaed J. Ned records to determine what Angie Alatorre did to earn $147,000 paid to her between late 1993 and the middle of 1998. Two J. Ned executives told investigators that Angie Alatorre had only worked one summer, in 1994, giving away unsold tickets to inner-city children.

After the J. Ned subpoena was issued, Angie Alatorre provided records concerning her work to Papiano, the firm’s attorney. Papiano turned over the records to J. Ned, which gave them to IRS agents, according to the records.

“The documents Angie Alatorre gave to Papiano . . . contain false information,” an affidavit says.

Papiano, one of those summoned before a federal grand jury, said Wednesday that he assumed Angie Alatorre’s records were accurate. “I just asked her to give me what was in response to the subpoena,” he said.

As part of her husband’s plea deal, federal investigators agreed not to seek prosecution of Angie Alatorre.