Ex-Task Force Member’s Ties to Slumlord Probed

A high-ranking health inspector who was a member of Los Angeles’ slum housing task force in the mid-1980s owned a slum building at the time and also acted as a paid front man for a major city slumlord, according to city officials and court records.

The inspector, Francisco Gutierrez, is now under investigation by the Los Angeles County Department of Health Services to determine whether he violated ethics codes or leaked information to slumlords while serving on the task force from 1984 to 1986, The Times learned.

Gutierrez, a 17-year veteran of the department, is now a district chief who supervises a dozen health inspectors. He also holds the appointed position of chairman of the Carson Planning Commission.

“While this investigation is ongoing, it is in my best interests not to talk about it,” Gutierrez said last week in a brief statement. He denied responsibility for any code violations in a building he had owned and added: “I am confident once all the facts are in I will be exonerated.”

A health department spokeswoman declined to comment on the internal investigation but said the findings are currently under review by department officials.

A source close to the investigation said the inquiry focuses on Gutierrez’s relationship with a major slumlord named Joe Fitzpatrick who was being investigated by the task force during the mid-1980s while Gutierrez was on the task force. Fitzpatrick was later convicted of code violations at three of his buildings in 1986.

One of Fitzpatrick’s companies was named MLUS (an anagram of SLUM). Another was headed byTeluce Black, who Fitzpatrick claimed was his Salvadoran gardener and associates charged was his dog. A black Labrador named Toulousse was licensed to his address. Fitzpatrick declared bankruptcy and left town last year.

Fitzpatrick, who is reportedly living in Las Vegas, could not be reached for comment.

In a civil court proceeding here on another matter, Fitzpatrick acknowledged last year that he was convicted of a Boston bank robbery in 1965 and said that he routinely used “straws” or “shell” companies to “cloud title” to buildings he controlled in Los Angeles.

He testified that he paid Gutierrez about $1,230 for serving as his “straw” buyer at a March 29, 1985, foreclosure sale for a Los Angeles apartment building.

Testimony by Gutierrez

Deputy City Atty. Stephanie Sautner, who heads the city’s interagency slum task force, said she attended the trial in preparation for a landmark civil racketeering suit that the city attorney and two tenant law firms filed in March against 142 defendants including Fitzpatrick. The suit accuses dozens of investors and lenders of civil racketeering and fraud in connection with their investments in Los Angeles slums.

“I was monitoring the trial and Frank (Gutierrez) came in,” Sautner said. “That’s when I learned that he knew these people who were our defendants. I watched him testify that he had allowed buildings to be placed in his name as a favor to Joe Fitzpatrick.”

According to Sautner, who said she took notes, Gutierrez testified: “I let him (Fitzpatrick) use my name on the property. . . . I did things for Joe.”

No transcript is available of Gutierrez’s testimony. However, Gutierrez did not deny Sautner’s account when a reporter read it to him. Asked about his relationship with Fitzpatrick, Gutierrez said, “I don’t really have too much to say about what I know about that.”

Gutierrez is not the only member of the interagency slum task force who became financially involved with Fitzpatrick. William Wakeland, a city fire inspector who worked on the task force with Gutierrez, said he unwittingly became a straw buyer for Fitzpatrick after retiring from public service.

Wakeland is now cooperating with his former colleagues on the city attorney’s task force as they begin to prosecute the civil racketeering suit, Sautner said. Among the documents Wakeland provided to the city attorney and The Times was a letter purportedly signed by Fitzpatrick in which he acknowledged falsifying a deed.

Sautner said she believes that Wakeland was victimized by Fitzpatrick.

‘He Never Said Anything’

“Gutierrez is a totally different story,” she said. “Frank sat at a table with us week after week as we tried to get behind the sham owners, including members of the canine persuasion. And he never said anything, never told us he knew . . . these people.”

Throughout 1984 and 1985, Gutierrez was the principal health inspector on the task force, an interagency committee set up under the Los Angeles city attorney’s office to target and prosecute the city’s worst slumlords.

While on the task force, he had access to inspection schedules, projected filing dates of criminal complaints and prosecution strategies, Sautner said.

“We suspected somebody was leaking information because our inspectors would show up at a building, particularly a Fitzpatrick building, and there would be somebody there to block our access,” she said. “Whether (Gutierrez) was the one or not, we don’t know.”

Unknown to his fellow task force members, Gutierrez was acquainted not only with Fitzpatrick but also with William Leyton, a task force target who had previously been convicted of slum code violations. He was under investigation for probation violations while Gutierrez was on the task force, Sautner said.

Gutierrez, Leyton and Fitzpatrick had all worked together in the late 1970s at a Los Angeles real estate firm specializing in apartment sales. Gutierrez, then a health inspector, was moonlighting as a real estate salesman.

In 1980, records show, Gutierrez became co-owner of an apartment building at 2240 S. Wall St. His co-owner was a Los Angeles county coroner’s office employee who no longer works there. He could not be reached for comment.

‘No Violations’

“When I owned 2240 S. Wall, there were no violations on the property,” Gutierrez said in a statement to The Times this week. “The record shows that when I did own it, I . . . rehabilitated each unit.”

Not true, said Ron Black, senior investigator at the Los Angeles Department of Building and Safety.

Flipping through dozens of inspectors’ reports, Black said the building was substandard the entire time Gutierrez owned it. In February, 1985, he said, the department photographed the building’s code violations to seek a court order vacating the building. A few days later, however, Gutierrez transferred his share of the building to his co-owner.

For reasons that are not clear, Gutierrez reacquired title to the building for six days in April, 1986, and took out a $213,000 loan on it. By then, the building was so deteriorated, Black said, “it actually would have been safer for someone to live on the street.”

Many units had no heat or hot water. Walls were collapsing. Roaches roamed the walls. Fire exits were blocked. Units had been illegally subdivided into warren-like compartments. One “apartment” was a closed-off hallway where a mother and two children lived without running water or a bathroom, Black said. It rented for $250 a month.

Gutierrez was charged with 20 counts of criminal building code violations. But charges were dismissed because officials later learned that he had sold the building the day before the inspection. The new owner was the Great Plains Partnership, which Fitzpatrick testified was headed by two of his “straws.”

Gutierrez was quietly removed from the task force at Sautner’s request, however. He returned to normal duties and received a promotion from senior sanitarian to chief sanitarian, a county health department official said.

Meanwhile, Wakeland, Gutierrez’s former colleague on the task force, had retired in 1985 and set up a consulting firm specializing in repairing old buildings. The company installed fire sprinklers in three of Fitzpatrick’s buildings, including the Chicago Hotel in downtown Los Angeles.

Confidential Documents

“One day I saw Joe and he was waving around (slum task force) agendas as if to say, ‘Look what I’ve got,’ ” Wakeland said. “Those were very confidential documents. . . . Someone had been leaking them.”

Wakeland said he was drawn into a business relationship with Fitzpatrick in 1986. Fitzpatrick, he said, was in bankruptcy and was unable to pay an $11,000 bill for refurbishing work, so he instead deeded the Chicago Hotel to Wakeland.

Fitzpatrick promised, he said, that they would sell the hotel within a year and Wakeland would be paid off and even make a profit. In the meantime, Fitzpatrick helped Wakeland get a loan for about $450,000 to pay off existing debts on the building.

“It’s hard for me to believe I went for it,” Wakeland said. “But I did. It didn’t happen all at once. It took place over time and just kept getting more involved.”

Wakeland said he found in reviewing Fitzpatrick’s federal bankruptcy file that he was merely one of a series of people who had held title to the Chicago Hotel.

One of the other title holders was Frank Gutierrez, who was by then off the task force. “Joe had set up all these transfers to control the building even while it was in bankruptcy court,” Wakeland said. “And me? Joe was just using me like another of his straws.”

Refused to Sign

“I want out,” Wakeland said he told Fitzpatrick.

In response to his demand, Wakeland said, Fitzpatrick drew up incorporation and sale documents for a partnership to take over the Chicago Hotel. The general partner was, according to Wakeland, a fictitious person named “Yuri Routt.”

Wakeland said he refused to sign the documents. A few weeks later, however, Wakeland said he found that his signature was forged on documents deeding the property to another Fitzpatrick company.

Finally, he said, he negotiated a settlement with Fitzpatrick relieving him of responsibility for the building while settling for about half of his original $11,000 bill.

The secretary of state’s office is investigating whether the Chicago Hotel deed was falsified, officials said. Fitzpatrick has since signed a statement saying he falsified the notary stamp on the deed.