2 Santa Ana Councilmen Indicted in Extortion Case


A federal grand jury Tuesday indicted Santa Ana Councilman Ted R. Moreno on charges that he masterminded an elaborate political extortion and money-laundering scheme that shook down two businessmen for thousands of dollars in campaign donations.

The 24-count indictment also names as defendants Councilman Tony Espinoza and two 1996 Moreno-backed council candidates, Hector Olivares and Roman Palacios.

At a news conference announcing the indictments, U.S. Atty. Nora Manella called the alleged vote-selling scheme a “time-honored tradition of corrupt politicians.”


“The message to businessmen was clear,” Manella said. “Don’t worry about us voting our consciences. . . . We’re willing to support any businessmen who will pay us.”

Moreno denied the charges Tuesday afternoon.

“I never extorted anybody. I never threatened anybody. I never harassed anybody. I never made any promises in return for campaign contributions,” he said. “I love Santa Ana. This is the only home in my memory. . . . All I ever wanted to do was help the people of this city.”

All four men are charged with conspiracy to extort about $31,000 from a service station owner who wanted a beer and wine permit for his mini-mart.

Olivares also is accused of one count of conspiracy to launder money and 12 counts of laundering money, mainly from a landowner who allegedly turned over $10,000 in cash and gold coins.

Moreno is named in all 24 counts, which include an extortion charge and nine counts of a rarely used law that makes it a crime to defraud the public by mailing or filing false and misleading campaign expense reports and documents, including mailers.

The men were not arrested but are scheduled to be arraigned Monday in federal court in Santa Ana.


Mark Rosen, the attorney for Olivares, denied the charges against his client.

“I don’t think Hector extorted any money from anybody or laundered any money,” Rosen said. “He ran a straightforward campaign, and he didn’t promise his vote to anybody. I mean the guy didn’t even get into office and they’re ganging up on him.”

Ed Asberger, the attorney for Espinoza, said he had not seen the indictment and declined to comment. Neither Palacios nor his lawyer could be reached for comment.

The grand jury accusations rocked the city, where a Latino majority has been split over the politics of mainstream Mayor Miguel Pulido and Moreno, who is running against him.

The indictment paints Latinos as a negative, rather than positive, influence in the community, said Santa Ana accountant Bob Lopez.

“The names really don’t matter,” he said. “We struggle so hard to prove ourselves and then we get some negative thing hitting the newspaper and some people say, ‘Ah. See what [Latinos] do when they get elected.’ ”

Moreno and his supporters said they believe that the investigation and the indictment are an attempt to maintain the status quo in Santa Ana.


“This is a political animal fight,” said Margerite Rodriguez, a longtime supporter.

Manella denied that the investigation was politically motivated. “I have not the slightest knowledge--or interest--in the local politics of Santa Ana,” she said.

According to the indictment, a businessman--Vaskin “Victor” Koshkerian--sought a conditional use permit from April 1996 to April 1997 to sell beer and wine at his Grand Avenue Chevron station.

The indictment charges that Moreno initiated a meeting with Koshkerian and that the four politicians promised to support his application for a permit.

The indictment also accuses Moreno of seeking $15,000 from Jack Blackburn, the head of a nonprofit corporation called the Cooper Fellowship, who was seeking to sell a 15-acre North Bristol Street lot.

In May 1996, the indictment says, Blackburn wanted to sell the parcel to the Santa Ana Unified School District board or, failing that, have the property’s zoning changed from agricultural to residential to make it more valuable.

Moreno allegedly collected $10,000 from Blackburn--half in the form of 14 South African Krugerrands valued at a total of $5,320 and the rest in cash.


After receiving the cash from Blackburn and Koshkerian, the indictment says, Moreno and Olivares schemed to launder the money in several ways.

Times staff writer David Reyes contributed to this story.