State Sen. Leland Yee arrested on corruption charges in FBI sting

SAN FRANCISCO — State Sen. Leland Yee, a prominent figure in California’s Democratic legislative majority, was arrested in a federal corruption investigation Wednesday along with an ostentatious gangster known as “Shrimp Boy” — who insisted that he had gone straight — and two dozen of their alleged associates.

An affidavit filed in federal court in San Francisco by FBI Special Agent Emmanuel V. Pascua said there was probable cause to believe that Yee had conducted wire fraud and had engaged in a conspiracy to deal firearms without a license and illegally import firearms.

Yee, 65, was taken into custody in San Francisco on Wednesday and was seen being loaded into an unmarked law enforcement vehicle under an umbrella, his wrists handcuffed behind his back. He was set to be released on $500,000 bond after surrendering his passport.

The affidavit paints a portrait of Yee that is by turns seedy and bumbling, and one deeply at odds with the high-minded image he had long cultivated. Yee, a candidate for secretary of state, is accused of being willing to take varied and numerous steps to solicit campaign donations and sidestep legal donation limits.

For instance, he is accused of seeking an official state Senate proclamation in the spring of 2013 praising the Ghee Kung Tong Freemason lodge in San Francisco. Yee sought the proclamation, according to the court complaint, in exchange for a $6,800 donation to one of his campaigns — a donation that was paid by an undercover FBI agent.

The organized crime figure known as Shrimp Boy, whose name is Raymond Chow, identifies himself as the “dragon head” of that Freemason organization on his Facebook page. The indictment says that Chow, 54, whose criminal history includes racketeering and robbery, has a position of “supreme authority” in the Triad, an international organized crime group.

Yee is also accused of brokering an introduction between a prospective campaign donor and state legislators who had influence over medical marijuana legislation. It allegedly came in exchange for cash campaign donations that far exceeded legal limits — and were paid by the FBI.

The affidavit says that in August 2013, a prominent California political consultant who had been working to raise money for Yee’s campaigns told a prospective donor — an undercover federal agent — that Yee “had a contact who deals in arms trafficking.”

In exchange for campaign contributions, according to the affidavit, Yee would “facilitate a meeting with the arms dealer” so that the donor could buy a large number of weapons. The firearms would be imported through a port in Newark, N.J. At one meeting, the affidavit said, Yee and the prospective donor discussed “details of the specific types of weapons.”

All told, 26 people were identified as having violated federal statutes in the complaint. It was unclear how many were in custody. They were accused of participating in a free-ranging criminal ring that dabbled in a spectrum of activity, from illegal marijuana “grows” to a scheme to transport stolen liquor to China.

The federal complaint reads like a bad crime novel with off-the-books firearms deals made in parking lots and confessions whispered in a booth at a karaoke bar. Chow is described as a “judge” in his organization — if one member of the group kills another, it’s up to Chow to determine whether the killing was justified.

The sweeping sting unfolded in the fog and rain Wednesday morning as hundreds of local and federal law enforcement agents descended simultaneously on numerous locations — a Freemasons temple in San Francisco’s Chinatown, where they appear to have used a circular saw to slice open a safe, and a home on Hyde Street, where they kicked in the door and left splinters on the stoop.

The targets also included the Sacramento office and the three-story San Francisco home of Yee, 65, a father of four, the first Chinese American elected to the state Senate and a leading candidate in the race to become California’s top elections official.

The arrest could mark the abrupt end of Yee’s prestigious and sometimes divisive political career, which has stretched for nearly three decades, from his days as a reformist school board member in San Francisco to a stint on the county Board of Supervisors, then to the state Assembly, where he became the first Asian American to serve as speaker pro tem.

Also charged was Keith Jackson, 49, a prominent political consultant who has worked to raise money for Yee’s political campaigns. Jackson owns and operates Jackson Consultancy, a San Francisco firm, and “has a longtime relationship with Senator Yee,” according to the affidavit.

It was Jackson, according to the complaint, who brokered some of the introductions between Yee and prospective donors who turned out to be undercover FBI agents. It was Jackson, the complaint said, who first advised the undercover agents that Yee had a contact who was an arms dealer.

Sam Singer, the founder of Singer Associates, a San Francisco firm, said Jackson freelanced for different companies in the city. He was known for his solid connections in the African American community, Singer said.

According to the indictment, Jackson had no known criminal convictions.

Jackson also represented a developer seeking to build thousands of homes on the site of a former naval base in the Hunters Point neighborhood of San Francisco.

“Everyone in San Francisco who knows Keith Jackson was shocked to read the charges,” Singer said in an interview. “He always came across as a peace-loving, hardworking guy.”

Yee, who has represented San Mateo County and part of San Francisco in the state Senate since 2006, is prohibited by term-limit rules from running for a third term.

The investigation further erodes the possibility that Democrats could restore their hard-fought, short-lived “supermajority” in Sacramento, a powerful two-thirds legislative majority. The supermajority was lost in recent weeks as two of Yee’s Democratic colleagues in the Senate — Ron Calderon of Montebello and Roderick Wright of Inglewood — took leaves after separate corruption and fraud investigations.

Democrat Derek Cressman, one of Yee’s opponents in the secretary of state race, called his arrest a “wake-up call.”

“We are clearly beyond the point of looking at one bad apple and instead looking at a corrupt institution in the California Senate,” Cressman said. “The constant begging for campaign cash clearly has a corrosive effect on a person’s soul and the only solution is to get big money out of our politics once and for all.”

State Senate Republican leader Robert Huff of Diamond Bar said he was “deeply troubled” by Yee’s arrest.

“Once again, the Senate has been tarnished by another FBI raid of a senator’s Capitol office,” Huff said.

To those who have long kept an eye on the criminal underworld of the San Francisco area, it came as little surprise that the most colorful figure in the indictment was Chow, who has been in and out of prison for his roles in the Chinatown underworld since the mid-1970s.

The FBI had been monitoring Chow closely with wiretaps, and in 1992, he and 19 associates were charged with racketeering.

Chow faced 48 counts, including murder for hire, heroin trafficking, conspiracy, violent racketeering, debt-collecting and importing firearms.

He was convicted on gun charges and sentenced to more than 23 years in prison.

Chow was released in 2003.

Chow has since promoted himself as a legitimate businessman.

He spoke to students about the perils of gangs, became active in community politics and talked openly with reporters about his past.

But law enforcement monitored him closely and concluded that he was still associated with Asian gangs.

scott.gold@latimes.com

joe.mozingo@latimes.com

maura.dolan@latimes.com

Gold and Mozingo reported from Los Angeles. Dolan reported from San Francisco.

Times staff writers Chris Megerian, Paige St. John and Melanie Mason in Sacramento and Richard Winton and Matt Stevens in Los Angeles contributed to this report.