U.S. Arrests Ex-Lynwood Mayor

Former Lynwood Mayor Paul Richards was arrested by federal authorities Thursday and charged with steering a series of lucrative city contracts to a company he secretly owned.

Richards, 48, whose political machine dominated the city of 70,000 before his recall by voters last year, allegedly created the company through his sister. It obtained $273,000 in city funds through a single subcontract, according to a 59-page indictment unsealed Thursday.

Richards’ firm, Allied Government Services, would have been paid a $1-million commission from the city for brokering billboard deals had Richards not lost his City Council majority before the recall.

His recall came after a series of articles in The Times a year earlier disclosed many of the business dealings that formed the heart of the government’s indictment.

Richards, a lawyer who served seven years as Lynwood’s mayor during a 17-year stint on the City Council, was arrested without incident at his home early Thursday, federal agents said.

He faces up to 20 years in prison if he is convicted on charges of conspiracy to commit extortion, mail fraud, money laundering and depriving the public of honest services.

Assistant U.S. Atty. Daniel Shallman said the case against Richards involved “old-school political corruption.”

“He turned the people’s business into the Richards family business,” Shallman said. “We count on responsible citizens coming forward and aggressive reporting by the media.”

Also charged in the case were:

* Paula Cameo Harris, 55, of Altadena, Richards’ sister, who allegedly served as her brother’s front in Allied Government Services.

* Bevan A. Thomas, 55, of Anaheim, a friend and business associate who allegedly bribed Richards in return for city contracts worth hundreds of thousands of dollars per year.

* David N. Smith, 64, of Palmdale, a billboard lobbyist who allegedly bribed Richards with political contributions to obtain a deal for his client, Regency Outdoor Advertising.

Edward Robinson, a court-appointed lawyer representing Richards, declined to comment after all three defendants appeared before a federal magistrate judge Thursday afternoon. Smith’s attorney, David Conn, also declined to comment.

Eugene “Chip” Matthews, Thomas’ lawyer, said the charges against his client were groundless. “The case against my client is an unjustified attempt to pressure him to testify against Paul Richards and others in this case,” Matthews said.

The story of Richards’ allegedly corrupt dealings told in the indictment begins in late 1999, when the politician was at the height of his power.

He and the council majority he controlled voted to give his friend, Thomas, a no-bid contract worth up to $25,000 per month to spot public nuisances and clean them up.

A few months later, at Richards’ direction, the indictment alleges, Richards’ sister, Harris, took out the paperwork to form Allied Government Services. His nephew, Julio Naulls, described in the indictment as an “unindicted co-schemer,” was the firm’s vice president for public affairs.

Once the firm had been created, Richards directed Thomas to subcontract some of his nuisance abatement work to Allied, the indictment said.

In two years, Thomas’ company, which was in his wife’s name, collected $623,000 from Lynwood taxpayers for nuisance abatement and paid $379,000 of that to Allied, according to the indictment.

Allied paid Harris and Naulls $1,000 to $1,500 per week, while the nephew worked for Richards in political campaigns. The firm also paid part of Richards’ debt to a printing company for campaign materials, made unreported campaign contributions to Richards’ political allies and paid $4,000 for improvements to a house Richards owns in Cerritos, the indictment says.

Allied subcontracted out the abatement work it received from Thomas, paying still other subcontractors $106,000.

The nuisance abatement deal was originally to last for two years. But as it was about to expire in late 2001, Richards drafted a proposal that Thomas submitted to the city to extend it for 10 years, according to the indictment.

The proposal also called for Thomas, who had worked previously as a community affairs consultant for a private trash hauler, to be paid an additional $200,000 to $300,000 per year in a new role as trash consultant to the city, the indictment said. Thomas’ job would be to create and help guide a city sanitation department.

Richards cast the deciding vote in favor of the new 10-year deal, which was terminated after his recall. Shortly after Richards cast that vote, Thomas’s firm paid $10,000 to a local printer to help pay off a debt Richards owed for campaign mailers. The indictment called that payment a bribe.

As those events were unfolding, the indictment alleged, Richards extorted money from a bus company, Commuter Bus Lines, that had provided transportation services to residents for more than a decade.

While the firm was seeking a long-term contract extension in late 1999, Richards offered only short-term extensions until the company agreed to hire Allied as its consultant. Richards then drafted the contract between Allied and the bus operator on his home computer, the indictment charges.

To pay for Allied’s services, Lynwood granted Commuter Bus Lines a rate increase that cost city taxpayers nearly $10 more per hour in 2001, the indictment alleged. The bus company, in turn, paid Allied $62,500 “for little or no work of any value,” the indictment said.

That same year, Regency Outdoor Advertising approached Richards through its lobbyist to propose paying the city for the right to erect billboards along the Century Freeway, which bisects Lynwood.

Richards then allegedly drafted a pitch letter, signed by his nephew on Allied letterhead, that was addressed to the Lynwood city manager. The letter offered Allied’s services to negotiate deals with billboard companies. It did not mention that Richards was already in private negotiations with Regency.

Richards then voted with a City Council majority to authorize the city manager to give Allied 20% of whatever the city was paid, plus any attorney’s fees.

The ultimate deal, terminated after the recall, was similar to the one Regency originally proposed to Richards. Regency would pay the city $400,000 for each of its billboards. Allied stood to pocket close to $1 million for doing little or nothing.

As the Regency agreement took shape, Regency’s lobbyist, Smith, made nearly $40,000 in contributions to a dormant campaign committee run by Richards.

Smith was charged with bribery as well as perjury after telling a federal grand jury that the only reason he gave the money to Richards’ campaign committee was because “I liked him.”

Richards also allegedly used another campaign committee, Mid-Cities Community Support Group, to steer a $10,000 political contribution from Allied and a $5,000 donation from Thomas to then-Compton Mayor Omar Bradley and others who were Richards’ political allies in the neighboring city.

Those contributions were made just after Bradley and his council majority agreed to sell some of Compton’s best city-owned land to Richards for millions less than it was worth.

Under the terms of the deal, which The Times reported in 2002, Richards, who had no experience as a developer, would not have had to put up any of his own money. Instead, the city would have lent him $1.6 million, which would have covered the purchase price of the land and nearly half a million dollars in planning costs. He would have to repay only the loans -- without interest -- when he sold the 231 houses he planned to build.

That deal was put on hold when Bradley and his allies lost political power in Compton in a campaign charged with allegations of corruption in 2003.

Times staff writer David Rosenzweig contributed to this report.