10:00 PM PST on Thursday, November 26, 2009

The Press-Enterprise

Of the nine defendants named in the San Jacinto political corruption indictment, Byron Jerry Ellison Sr. appears to have the fewest ties to the city — a part-time resident whose home is in Garden Grove. He also has an address in Montana.

But according to affidavits and the 155-count indictment, Ellison, 70, is suspected in 139 counts — 43 felonies and 96 misdemeanors.

Arraignment was postponed to Dec. 4 for Ellison, a retired California Highway Patrol sergeant and onetime investigator for the California secretary of state’s voter fraud investigation unit.

Like Ellison, developer Stephen Holgate, 62, also named in the indictment, is a former Highway Patrol officer. Holgate faces 151 counts, including 53 felonies.

Ellison’s attorney, Christian Jensen, said he did not know whether the two men knew each other from their CHP days.

“Ellison appears to be an employee of Holgate,” senior Riverside County district attorney investigator Kim Robinson said in a search warrant affidavit filed during the 18-month investigation.

The indictment says defendants conspired to launder hundreds of thousands of dollars, conceal campaign contributions and offer bribes as part of a scheme to advance their political agendas.

Charges include money laundering, tax fraud, bribery, perjury and filing false government documents.

Ellison “was caught up in this thing, and when we see the evidence we will see his involvement was minimal and his involvement was lawful,” Jensen said.

Search warrants implicate Ellison in several transactions involving thousands of dollars, and the indictment names three separate $2,500 contributions from Ellison or his company, ELCO Property Management, which allegedly were laundered.

The indictment “seems to be throwing everybody in there and saying, ‘You figure this out,’ ” Jensen said by phone.

Ellison did not return phone messages placed Tuesday and Wednesday seeking comment.

Ellison received a bachelor’s degree in public administration from the University of Redlands in 1978. He prefers to be known by his middle name of Jerry. He spent 24 years in the CHP and took a medical retirement in 1995 with the rank of sergeant, according to Jensen.

Ellison retired from two years as a special investigator with the California secretary of state’s office in 2000, Jensen said.

The Case

An investigator said in court papers that Ellison, ELCO Property Management, or the San Jacinto Chamber of Commerce of which Ellison was chief financial officer, received money from developer Holgate as part of a money laundering operation.

The money from Holgate was turned into checks from Ellison, ELCO or the chamber to San Jacinto Unified School District board member Nancy Ayres, among others, according to search warrant affidavits.

Nancy Ayres and husband Jim Ayres, a San Jacinto City Councilman and unsuccessful Republican primary candidate in the 2006 election for the 65th Assembly District, are also named as defendants in the indictment.

“Over $150K has been given to the (Ayreses) in the form of cash and subsequently laundered through Jim Ayres’ 65th State Assembly Campaign bank account, or through the San Jacinto Chamber of Commerce,” Robinson wrote in one affidavit. “Holgate’s bank records have shown that he also utilized B.J. Ellison to assist in paying the (Ayreses) tens of thousands of dollars.”

Tracking the checks

In one instance, Holgate provided a $50,000 check on Dec. 31, 2007, to the San Jacinto Chamber of Commerce, with Ellison as CFO, Robinson wrote in his affidavit.

Robinson said he found that after the $50,000 check went from Holgate to the chamber, several checks from the chamber, signed by Ellison, went to Nancy Ayres.

It was not clear in the affidavit if all $50,000 went to Nancy Ayres; Robinson accounts for five checks worth $11,000.

Robinson later estimated that Ellison or ELCO paid a total of $36,000 over three years to Nancy Ayres. The payments were suspicious either because of their declared purpose, or because the money apparently originated with Holgate, but passed through Ellison before it was paid.

One $12,500 check from Ellison was sent to Nancy Ayres with “Daycare Contract” written in the memo line, Robinson wrote in an affidavit.

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