Moriarty Associate Keith Is Re-Indicted

Richard Raymond Keith, a key figure in the ongoing racketeering investigation of Orange County businessman W. Patrick Moriarty, was reindicted Thursday on tax evasion and other charges after he backed out of a plea-bargaining agreement with federal prosecutors.

Keith had earlier agreed to cooperate with the government in its multi-pronged investigation of Moriarty, who is under indictment on charges of racketeering in connection with the award of a card parlor license in the City of Commerce.

New Allegations

The government probe is also focusing on Moriarty’s contributions to state officeholders and legislators at the time he was pushing for passage of a law that would have exempted so-called safe-and-sane fireworks from local bans.

Keith, 47, of Cathedral City, was named in a new, expanded indictment that charged him with 13 counts of evading taxes, making a false declaration of bankruptcy and making false statements to a federally insured bank.

The new indictment alleges that, among other illegal acts, Keith failed to pay some $520,000 in federal taxes owed between 1979 and 1982.

Keith, a business associate of Moriarty, had been scheduled to appear in U.S. District Court in Los Angeles on Thursday and was expected to plead guilty on five counts of tax evasion and bankruptcy fraud and to cooperate in the Moriarty investigation.

But Keith told reporters Wednesday that he changed his mind about pleading guilty because information he had given investigators during about 60 hours of interviews had been leaked to the news media and to other targets in the investigation.

D.A. Office Blamed He blamed the leaks on investigators at the Orange County district attorney’s office, which began the Moriarty probe in 1983 and last year was joined by the U.S. attorney’s office in Los Angeles.

Keith said he would resume his cooperation with the U.S. attorney’s office and the FBI only if the district attorney in Orange County is dropped from the investigation. Otherwise, Keith said, a special prosecutor should be appointed to handle the Moriarty investigation.

Orange County Dist. Atty. Cecil Hicks, responding to Keith’s statements, said, “I don’t know what is troubling Mr. Keith. No information was leaked by my office, I am absolutely satisfied of that.”

“Defendants don’t get their choice of prosecutors,” Hicks added. “You don’t get to pick the lawyer for the other side. This case originated with us and it would be my expectation we would continue with it.”

Assistant U.S. Atty. Richard Drooyan on Thursday declined to comment on Keith’s statement or on his change of mind.

Asked how Keith’s action would affect the Moriarty case, Drooyan replied, “I don’t expect this to have any effect.”

Other Indictments The same grand jury that originally indicted Keith last December indicted Moriarty and Las Vegas gambler Frank Sansone a month earlier on charges of racketeering, mail fraud and operating an illegal gambling enterprise.

Other Pleaded Guilty Also indicted in November in connection with the same investigation of the licensing of a City of Commerce poker parlor were a Commerce councilman, a former mayor, a former councilman and a city executive.

They pleaded guilty and may be called to testify in the Moriarty trial.