10:11 PM PDT on Thursday, June 23, 2011

The Press-Enterprise

Special Section: San Jacinto Corruption Probe

A 155-count San Jacinto corruption case against developers and now-former elected officials appeared headed for conclusion with the guilty pleas Thursday of one key defendant and more expected today from another.

The seven remaining accused are considering plea bargain offers, prosecutors said. Prosecutors charged the defendants with bribery, illegal campaign contributions and conspiracy to hide the crimes from January 2005 to late August 2008.

Former San Jacinto City Council member and 2006 state Assembly candidate Jim Ayres, 39, entered felony and misdemeanor pleas Thursday.

“Guilty, your Honor,” Ayres said as Riverside County Superior Court Judge Michele Levine went through the pleadings.

He admitted to felony conspiracy, bribery and conflict of interest charges, along with two misdemeanor illegal contribution charges, and a money laundering charge that was reduced to a misdemeanor.

Under the agreement he will not go to prison, but could face up to a year in jail in addition to probation. He agreed to pay a $5,000 fine and also faces possible state tax penalties. The other charges against him will be dismissed at sentencing.

His wife, Nancy Jo Ayres, a former member of the San Jacinto Unified School District board, was scheduled to enter her pleas today, because her attorney was not available Thursday, Levine was told.

Before Jim Ayres entered his pleas, Supervising Deputy District Attorney Deborah Lucky told Levine “the people have extended offers to the remainder of the defendants.”


Levine set a July 28 hearing date to check on developments in the plea bargains. Jim Ayres will be sentenced Aug. 12, and Levine said she would schedule Nancy Ayres’ sentencing for the same date.

Jim Ayres declined comment outside of court.
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San Jacinto corruption probe
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The indictment filed in late 2009 named Jim Ayres, Dale Stubblefield, John Mansperger and James Potts, all San Jacinto City Council members at the time, and school board member Nancy Jo Ayres. None of them currently holds office.

It also named developers and businessmen Stephen Holgate, Scott Douglass Shaull, Robert Edward Osborne and Byron Jerry Ellison.


The actions appeared to signal the final chapter of the corruption case.

The settlement offers were announced about one month after Levine dismissed or altered dozens of charges against the key defendants and severely trimmed counts against others named in the indictment. Prosecutors also moved to dismiss some charges.

The case was so sweeping that even with several counts tossed, some defendants still faced scores of charges.

The indictment was the culmination of an 18-month investigation, during which 32 search warrants were issued.

Prosecutors alleged the defendants were involved in an elaborate illegal campaign donation and money laundering scheme between the developers and local officials.

Much of the alleged illegal donations focused on Ayres’ failed 2006 state Assembly campaign, documents alleged.

Prosecutors had said the money given to campaigns was intended to curry favor with local officials, who made many of the decisions regarding how Holgate could develop land he owned in San Jacinto.

The indictment and other court papers alleged that Holgate engineered an elaborate house swap in which Shaull used money surreptitiously provided by Holgate to purchase the Ayres’ former home for $89,000 over market price.

Documents also claimed the Ayres then used the windfall from that sale to buy a $500,000 luxury home in an exclusive subdivision built by Holgate, the investigator said.


Former Hemet City Council member Robin Lowe was another unsuccessful candidate, along with Ayres, in the 2006 65th Assembly District Republican primary. She recalled the contributions poured into the district, which was then a hotbed of Inland area housing developments.

“There was too much money, too fast,” she said Thursday of the contributions. “It was coming from different directions that didn’t make any sense.”

The felony counts to which Ayres pleaded guilty on Thursday included the conspiracy count that originally named all defendants. Levine had dropped that charge against all except Jim Ayres, Holgate and Osborne. It alleged they worked together to cover up illegal campaign contributions.

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