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Mail fraud charge used to convict two other officials

Embattled Supervisor Ed Jew faces felony mail fraud charges in connection with an alleged scheme to extort up to $80,000 in cash from local businessmen who sought Jew's help in resolving permit problems. In the past year, federal prosecutors have successfully convicted two former Colma City councilmen on the same charge. Jew faces up to 2 years in federal prison and $250,000 in fines if convicted.
Photo(s) by Luke Thomas

By Julia Cheever

September 23, 2007

A federal criminal charge leveled against San Francisco Supervisor Ed Jew -- a mail fraud charge incorporating a public corruption allegation -- was successfully used by U.S. prosecutors in the past year to convict two former Colma city councilmen.

The crime, sometimes known as honest services mail fraud, is defined in federal law as using the U.S. mail to further a scheme to deprive the public of its right to honest services.

The use of mail provides the federal element needed to make the offense a U.S. crime even if a defendant in public service is a local and not a federal official.

Jew, 47, elected last year to represent the city's Sunset District, was accused of mail fraud in a federal criminal complaint Thursday for allegedly soliciting $40,000 in cash from tapioca drink shop operators seeking city permits.

Former Colma City Councilmen Phillip Lum and Ronald Maldonado were accused of a similar mail fraud crime in separate federal indictments in 2006 and 2007 for accepting airline tickets to the Philippines from a card room owner who benefited from their votes.

Lum pled guilty to two counts in federal court in San Francisco in April and Maldonado pled guilty to one count in July.

Lum was a council member from 1986 to 2006 and also served several terms as mayor. Maldonado was on the council from 2000 to 2004.

Lum was sentenced July 12 to one and one-half years in prison by U.S. District Judge Jeffrey White, who said, "This is a very serious matter. It is a violation of the public trust. People who do these things have to realize they're going to jail."

Maldonado was given a penalty of six months of home detention on July 14 by U.S. District Judge Charles Breyer of San Francisco, who said Maldonado's medical problems justified a non-prison sentence.

The original mail fraud statute outlawing the use of mail to perpetuate a scheme was passed by Congress in 1872 and was aimed at operations such as mail-order sales of counterfeit money.

Illinois Congressman John Farnsworth, a sponsor of the 1872 law, told his colleagues it was needed to "prevent the frauds which are mostly gotten up in large cities ... by thieves, forgers and rapscallions generally for the purpose of deceiving and fleecing the innocent people of the country."

In the 1970s, federal prosecutors began using the law to convict public officials of corruption. When the Supreme Court ruled in 1987 that the law could be used only to protect tangible property rights, Congress responded in 1988 by passing a new provision specifically extending the law to public corruption.

The provision states that for purposes of the law, "the term 'scheme or artifice to defraud' includes a scheme or artifice to deprive another of the intangible right of honest services."

In the Colma case, the two former councilmen admitted to using the mail to send in-state public disclosure forms that failed to report the airline ticket gifts and to doing so in connection with a scheme to defraud the people of Colma of their honest services.

Jew is accused in the Sept. 20 federal complaint of using the mail in furtherance of a scheme by giving the city Planning Department the go-ahead to mail a notice of violation to the landlord and an employee of a Sunset District tapioca drink shop in April.

Jew at the time was allegedly pressuring local operators of beverage shops in the Taiwan based Quickly chain to pay to have a consultant help with permit paperwork while Jew allegedly would help "from the inside," according to an affidavit included with the complaint.

The affidavit by FBI agent Christopher McDonough alleges that Jew agreed to accept a total of $80,000 from eight owners or would-be owners of Quickly drink shops in the city and received $40,000 at a meeting with Quickly representatives at his Chinatown flower store on May 7.

The affidavit says that Jew told FBI agents in a May 18 interview that he gave half the money to an unnamed consultant and intended to give most of the remaining $20,000 to charity. Agents found $10,000 of the money in marked bills in a May 18 search of a house occupied by Jew in Burlingame, according to the affidavit.

Jew pled not guilty before U.S. Magistrate Elizabeth Laporte in San Francisco on Friday and is currently free on $1 million bail. He is scheduled to have a preliminary hearing Oct. 11.

The mail fraud charge carries a maximum penalty of 20 years in prison upon conviction, but the actual penalty, if Jew were convicted, would be determined after consideration of federal sentencing guidelines.

Jew also faces separate state court charges of allegedly lying about his residence during his candidacy and is due to go on trial on those charges in San Francisco Superior Court on Oct. 26.

Editor's Note: For a chronology of Supervisor Ed Jew's legal troubles, click here.

Copyright © 2007 by Bay City News, Inc. -- Republication, Rebroadcast or any other Reuse without the express written consent of Bay City News, Inc. is prohibited.





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