Contractor Charged With Extortion Attempt, Death Threat

A San Marino contractor is in custody, facing charges he sought to extort millions of dollars from a former business associate he believed cut him out of lucrative construction deals, including a section of the Red Line subway tunnel.

Authorities allege that contractor John A. Artukovich threatened to kill his former business partner, Michael L. Shank, 63, unless Shank paid him $8 million. He allegedly told Shank that an extremist paramilitary organization had been commissioned to kill him, sources said.

Artukovich, 70, pleaded not guilty at an Oct. 20 arraignment. He is being held on $1-million bail pending a preliminary hearing Friday on two felony counts of attempted extortion and one felony count of making terrorist threats.

Joseph Angelo, an attorney for Artukovich, said his client is an innocent, highly respected businessman whose Azusa-based company has completed countless public works projects.

Artukovich allegedly told Shank--who lives in Denver--he wasn’t going to survive unless he paid the money, sources said.

“Mr. Shank took the threat very seriously,” said Shank’s attorney, Michael Baker. “He is very happy the district attorney’s office got involved and Mr. Artukovich is behind bars.”

Artukovich calculated the amount, authorities say, based on $1 million for each project Shank has completed since the two men ended their business relationship 10 years ago.

Shank’s firm joined with a Japanese construction giant to build the subway tunnel between Pershing Square and MacArthur Park, a $54-million deal that Artukovich believed he should have shared in, according to a 1995 lawsuit he filed against Shank and Ohbayashi Gumi.

The three firms had worked together in the 1980s on a $50-million Phoenix drainage tunnel for the local freeway system. Before that, Artukovich and Shank had worked on four joint ventures since 1978.

“He was very upset about not being part of the subway project,” Baker said.

Their joint venture, Baker said, was limited to the Arizona project.

Authorities allege that Artukovich abandoned the lawsuit in favor of strong-arm tactics, telling an accountant for Shank in West Los Angeles that Shank would be killed unless he paid him $8 million.

The accountant contacted Shank, and they notified the district attorney’s office.

Investigators told Shank to arrange a meeting with Artukovich, who is well over 6 feet tall and weighs 300 pounds. The San Marino contractor, authorities allege, repeated his threats in an Oct. 16 conversation at the Ontario International Airport.

During a 45-minute meeting between the two men, district attorney’s investigators electronically eavesdropped on the conversation through a microphone Shank was wearing, sources said. Moments later, investigators arrested Artukovich.

Angelo said the Oct. 16 meeting was an effort to settle the civil suit, which seeks a share of the equipment used in the Arizona project for Artukovich’s firm. The civil case was scheduled to begin trial last week in a San Francisco court but has been delayed, he said.

Artukovich’s arrest shocked his family and friends, Angelo said. The developer, his attorney said, “has no history of criminal conduct. The bail is a reaction to the death threat issue.”

The case may have its roots in a divorce proceeding more than a decade ago.

Court documents show that Artukovich may have missed out in the subway tunnel job in 1987 because his divorce caused problems with his company’s $10-million credit line and bonding capacity.

Artukovich’s company filed for Chapter 11 bankruptcy in 1995, and Shank’s Denver-based M.L. Shank Co. has emerged as one of the world’s elite tunnel engineering firms.

The Metropolitan Water District awarded Shank, in partnership with British construction giant Balfour Beatty, more than $300 million worth of contracts for work on the Inland Feeder--a massive network of tunnels and pipelines that will deliver water from Central California to a reservoir south of Hemet.