Santa Ana Councilman Convicted in Graft Case

A federal jury Tuesday convicted Santa Ana Councilman Ted R. Moreno on 25 counts of extortion, money laundering and mail fraud stemming from an elaborate scheme to win majority control on the City Council.

The conviction caps a four-year FBI investigation in which Moreno accepted cash from a gas station owner with the promise of helping him secure a beer and wine license. Moreno used the money in an unsuccessful attempt to elect several political allies to the council.

Moreno, 32, the youngest person ever elected to the Santa Ana council and once a rising political figure, slumped in his chair and bowed his head just before U.S. marshals handcuffed him and escorted him to a federal detention center in Los Angeles.

U.S. District Judge Gary Taylor rejected Moreno’s pleas to remain free until his sentencing, after Santa Ana Police Chief Paul M. Walters told the court that fellow council members feared the conviction would push Moreno “beyond the edge psychologically.”

Walters testified that colleagues have become increasingly concerned about Moreno’s behavior in recent months, so much that they requested that an armed guard be stationed at the council chambers for protection if Moreno remained free on bail.

The jury deliberated nearly two days before returning guilty verdicts on all charges against Moreno, who was accused of pocketing at least $31,000 in illegal campaign contributions. Jurors left the Ronald Reagan Federal Courthouse under a U.S. marshal’s escort and refused to comment on the deliberations.

The three-week trial turned largely on the testimony of the gas station owner, an FBI informant who recorded himself on audio and videotape as he gave Moreno thick envelopes of money. In one grainy black and white tape, a jubilant Moreno high-fived the informant after receiving $2,500.

Prosecutors said that recording, which jurors asked to view during deliberations, was pivotal in proving that Moreno eagerly pursued the plan.

“That high-five captured the spirit of Moreno. He was glad to be there. It was part of business as usual,” said Assistant U.S. Atty. John Hueston.

Moreno, who faces up to nine years in prison, declined to comment. His attorney, Dean Stewart, said, “It’s a very sad day for Mr. Moreno and his family. He’s been a public servant since 1992, and he’s practically a lifelong Santa Ana resident. He was heard on one of the tapes talking about his love for the city--and I don’t think anybody disputes that.”

During the trial, the councilman defiantly took the witness stand, arguing that he was a victim of entrapment by overzealous FBI agents. Moreno said he only accepted the money because he was afraid the FBI informant would “destroy” him.

Supporters expressed anger at the verdict and said Santa Ana was losing an official who spoke for the city’s poor, many of them Latinos.

“I just think it’s a sad day for the Hispanic community,” said Mike Estrada. “Ted Moreno is a good man and a good voice for Santa Ana residents. We will miss him.”

Under state law, Moreno must now be stripped of his council membership. City officials suspended him Tuesday, cutting off his salary. He will be formally removed from office after the judge officially enters the conviction into the court record in December.

Moreno was indicted in 1998 along with three of his political allies after a two-year federal investigation uncovered the alleged plot to take political control of the city. Moreno’s allies, former Councilman Tony Espinoza and unsuccessful council candidates Roman Palacios and Hector Olivares, eventually pleaded guilty to lesser charges, leaving prosecutors to focus their case on Moreno, whom they called the scheme’s mastermind.

He was charged with shaking down businessmen for donations to his campaign and those of his allies running in the 1996 council election. Prosecutors say Moreno wanted to be head of a majority voting bloc.

The FBI investigation began after Moreno met Vaskin “Victor” Koshkerian. The Santa Ana gas station owner agreed to pay Moreno thousands of dollars in exchange for his support for the liquor license permit. Over six months Koshkerian made more than 77 audio and videotapes of their meetings.

Moreno often laughs and jokes with Koshkerian on the tapes, many of them recorded in expensive restaurants or Moreno’s home in Santa Ana. On one video, Moreno takes a bulging envelope from Koshkerian and correctly estimates the $2,500 total.

“My hand knows the weight,” Moreno quips.

Throughout the trial, Moreno said Koshkerian used a clever mix of flattery and threats to lure him into something he would not have done otherwise.

Prosecutors said Moreno was blinded by dreams of gaining control of the council at any cost, including peddling votes for cash. Expecting Moreno to argue entrapment, prosecutors said that they gave Moreno plenty of opportunities to refuse the money but that he never did.

Rather, they said, Moreno drove the deal, calling Koshkerian frequently and asking, even begging, for more money. “He wanted the deal just like he wanted the cash--because he wanted power,” said Assistant U.S. Atty. Jean Kawahara.

Moreno was also convicted of filing false campaign reports, lying to FBI agents and laundering more than $20,000 in cash and gold.

Prosecutors said their use of an FBI informant, whom they paid $53,000, was necessary to crack the case.

“Undercover operations are sometimes the only way to penetrate conspiracies of silence,” said U.S. Atty. Alejandro Mayorkas. “There was an agreement among these politicians to maintain silence.”

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Key Dates in Case

Nov. 3, 1992 -- Voters elect Ted R. Moreno to Santa Ana City Council

November 1994 -- Moreno allegedly begins vote peddling and money laundering

Nov. 5, 1996 -- Voters reelect Moreno to council

Aug. 25, 1998 -- Federal grand jury indicts Moreno on political extortion charges

Nov. 3, 1998 -- Moreno loses mayoral race to incumbent Miguel A. Pulido

July 14, 2000 -- City attorney rejects Moreno’s attempt to circumvent term limits by resigning from council

Aug. 23, 2000 -- Moreno testifies that FBI informant coerced him to accept bribe

Sept. 5, 2000 -- Jury finds Moreno guilty on all counts, city attorney suspends him from council

Researched by BRADY MacDONALD / Los Angeles Times