Moreno, Co-Defendants Deny New Charge

Santa Ana City Councilman Ted R. Moreno and two others pleaded not guilty Tuesday to a new charge of lying to the FBI while they were under investigation for extortion and money laundering.

In a brief arraignment on a second federal indictment, Moreno and his co-defendants--Councilman Tony Espinoza and former council candidate Hector Olivares--also pleaded not guilty to the same conspiracy, extortion and money laundering charges they had faced in the original indictment.

The new indictment takes the place of the first one, which was returned Aug. 25. U.S. Magistrate Judge Elgin Edwards in Santa Ana released them on the same bonds they posted in August: Moreno at $100,000, Olivares at $25,000 and Espinoza at $5,000.

Moreno is accused of leading an effort to extort money from two businessmen for his and his colleagues’ 1996 political campaigns in exchange for support on requests the businessmen had before the city. He is charged with 25 of the 27 counts in the indictment.

The goal of the scheme was to finance a Moreno-backed slate to gain majority control of the City Council, according to the indictment.

The false-statement charges allege that when interviewed by FBI agents in April 1997, Moreno denied taking any cash from one of the businessmen. It also alleges that Espinoza and Olivares, in separate interviews, said they were not aware that Moreno had accepted the cash. All knew that their statements were false, the indictment alleges.

“They were approached by the FBI, they chose to speak to the FBI and they lied to the FBI,” Assistant U.S. Atty. John Hueston said after the arraignment.

Moreno and Espinoza declined to comment Tuesday. Though Espinoza has not spoken publicly yet about the two charges he faces, Moreno has vigorously maintained his innocence, saying previously that the investigation was politically motivated.

Attorney Mark Rosen, who represents Olivares, said after the arraignment that the charge of lying to the FBI was leveled against the defendants for disagreeing with the government’s version of events. The case, he said, is the result of the government’s zeal, not wrongdoing.

“My client is innocent,” Rosen said, and “it sure looks to me” as if Moreno and Espinoza were unfairly targeted.

The trial date is set for Oct. 27, but Hueston said the government believes it will be moved to May 18.