Moreno, Co-Defendants Deny Corruption Charges

Santa Ana City Councilman Ted R. Moreno, facing audio- and videotaped evidence of more than 100 conversations detailing an alleged extortion scheme, pleaded not guilty Monday to federal charges of masterminding an illegal operation to finance election campaigns.

Also pleading not guilty to public corruption charges were Councilman Tony Espinoza and onetime council candidate Hector Olivares.

The 24-count conspiracy, extortion and money-laundering indictment returned last Tuesday also could affect Moreno’s campaign for the mayor’s seat this fall. Though he has insisted he’s still in the race, his lawyer, Edward R. Munoz, said Monday that his client’s challenge is under reconsideration.

Describing Moreno as “disappointed, stressed and sleepless,” Munoz said: “He’s going to have to reassess that [candidacy].”

The three defendants were indicted along with another failed council candidate, Roman Palacios, who pleaded guilty Friday to one count of conspiracy to extort. He has been cooperating with authorities for the past few months and has agreed to testify against his colleagues.

In court Monday, the prosecution hammered hard on Moreno to win an increase in bail from $25,000 to $100,000.

Assistant U.S. Atty. John Hueston told the court that Moreno was the ringleader of an elaborate scheme to extort and launder more than $45,000 from two businessmen with matters before the city.

The grand jury charges allege that the money was used in the campaigns of Moreno and Moreno-backed candidates in an effort to win control of the seven-member council.

Hueston argued for increased bail on Moreno, saying the councilman is not trustworthy. Moreno allegedly lied to the FBI in April 1997, when he said he received only one check for $249 from one of the businessmen, the prosecutor said.

“The government has audiotapes of over 100 conversations and meetings that capture the defendants scheming to extort money, and videotapes of defendant Moreno taking cash on behalf of himself and other candidates not just once, but over and over again,” Hueston said.

Munoz countered that his client’s trustworthiness was proved by his appearance in court Monday. Moreno appeared voluntarily, his lawyer said, though he has been aware of the case against him for several weeks and has had the opportunity to flee.

“He has no extensive ties to family in other countries,” Munoz said. “The man has nowhere else to go. He’s a public figure. He’s in the newspapers constantly and, except when he goes into his residence, the man has no peace.”

Hueston also sought a heftier bail for Olivares, whose attorney, Jan Mark Dudman, argued as well that his client has ties to the community and is not a flight risk. Olivares is named in 14 conspiracy and money-laundering counts.

Though he raised Moreno’s bail, U.S. Magistrate Judge Elgin Edwards kept Olivares’ bail at $25,000. The judge set bail for Espinoza, named in only one conspiracy count, at $5,000.

Edwards also restricted their travel, telling all three men to avoid bus stations, railway stations and seaports. He also ordered Moreno to turn in his passport to the court clerk.

All three men and their wives were required to sign bonds for their release.

Hueston said Moreno faces up to 121 months in prison, Olivares up to 71 months and Espinoza up to 33 months. He scheduled trial for Oct. 27.

Munoz said he would wait to see the quality and content of the tapes before weighing their damage to his client.

The lawyer also questioned the reliability of one businessman involved in the extortion scheme.

“I understand he’s a pretty enterprising businessman,” Munoz said. “But he may have some chalk on his shoes--if he plays close the line.”

The indictment and the quick plea by Palacios rocked the Latino community, which constitutes more than half of Santa Ana’s population. Some believe that the charges are politically motivated because of Moreno’s current challenge to incumbent Mayor Miguel A. Pulido Jr.. Moreno has long been an outsider on the council.

U.S. Atty. Nora Manella, however, stressed last week that prosecutors were not interested in local politics. The investigation into the extortion scheme began because a victim complained that he was being solicited for bribes, she said.