Verdict clears Fallay of minor corruption charges
Jury "hopelessly deadlocked" on remaining
Former San Francisco Department of Building Inspection manager
Augustine Fallay was today cleared of four of thirty-three counts
of bribery, perjury and insurance fraud charges. The jury remained
deadlocked on 29 charges, forcing a mistrial.
May 15, 2007
Jurors in the criminal trial of former Department of Building
Inspector, Augustine Fallay, returned a verdict of not guilty
today on four of thirty-three counts of bribery, perjury, and
Fallay, 49, was cleared of three minor counts of bribery stemming
from meals paid for by former real estate developer and "loan
specialist" Tony Fu, and one count of insurance fraud.
Fallay was arrested in August 2005 and faced more than 20 years
in prison if convicted. Prosecutors charged that Fallay solicited
and accepted bribes over 12 years, including a $50,000 loan, payments
of cash and services for home improvements and meals.
His attorney, Randy Knox, argued his client was set up by Fu,
an unscrupulous loan broker who blackmailed Fallay after the building
inspection manager refused to grant him favors.
Following the 9-week trial that included testimony from as many
as fourty witnesses, jurors were "hopelessly deadlocked"
during deliberations on the remaining 29 counts, which included
two serious charges of bribery related to the $50,000 loan Fallay
Assistant District Attorney spokesperson June Cravett, speaking
to reporters immediately following the verdict said: "The
office at this point will take a look at the evidence, take a
look at the jury's comments, and we have to evaluate what to do
in terms of further proceedings in the matter."
Assistant District Attorney spokesperson June Cravett
"To not have a resolution at the end of the day, and certainly
from the prosecution's point, a conviction on all of the important
counts, certainly is a disappointment," Cravett added.
But, according to juror Bill Wise, Fu's credibility "was
the weak point for the prosecution."
"I think the jury in general did not deem him credible,"
Fu was the prosecution's star witness. Assistant District Attorney
Mark Katz argued in his closing statement that despite Fu's lack
of credibility, Fallay was "Fu's lifeline at DBI" and
referred to the $50,000 loan as a "sweetheart loan."
Assistant District Attorney Marc Katz
Wise told reporters that at the beginning of the trial he believed
the $50,000 loan to Fallay from Fu's former business partner,
Demas Yan, was a bribe. But Wise said he changed his mind when
he heard FBI recordings of Fallay telling Fu that he intended
to pay back the loan following the assignment of the loan to Fu's
former wife, Crystal Lei.
"On the main charge of bribery, there was a preponderance
for not guilty," Wise said.
Commenting on Fallay's reaction to the verdict, Knox said: "He's
relieved, but he fully expected to be vindicated at the end of
the day. And he was on those four counts, but those four counts
are four of thirty-three counts."
Defense Attorney Randall Knox
Although a decision by prosecutors has not yet been made to retry
the case, lawyers on both sides are anticipating a retrial.
A setting hearing is scheduled before Judge Earnest Goldsmith
in two weeks.
Tamara Barak contributed to this report.