Los Angeles Daily Journal

Tuesday, January 21, 2014
Federal investigators admit time has run out for filing charges in San Bernardino scandal
By Katie Lucia

RIVERSIDE – A high profile Inland Empire developer and others face state charges in what authorities have dubbed one of the biggest public corruption scandals in thestate. But it appears they won’t answer to the alleged crimes in federal court.

The federal investigation into the alleged bribery scheme in the so-called Colonies corruption case is closed, according to court documents filed by the U.S. attorney’s office this month.

The issue came to light as a result of motions filed by Jeffrey S. Burum, a defendant in the state case who was seeking the return of his property seized in a 2011 federal search. Burum, a developer, faces state charges in connection with an alleged bribery scheme to gain approval of a 2006 $102 million settlement between Burum’s company, Colonies Partners LP, and San Bernardino County.

In a response, federal prosecutors admitted the statute of limitations had run out on the federal crimes authorities were investigating and no charges have been filed against defendants. This is the first time authorities have admitted the federal investigation into Burum’s affairs was closed, according to Burum’s attorney, Arent Fox LLP partner Stephen G. Larson.

It’s not “standard practice” for the U.S. attorney’s office to make such a public admission, said Beong Soo-Kim, a former federal prosecutor and Los Angeles partner at Jones Day. Among the handful of rare situations is the Lance Armstrong case, in which U.S. Attorney Andre Birotte Jr. announced in 2012 that his office was dropping its investigation into the former Tour de France champion suspected of doping.

“Given that defense counsel filed this motion issue directly, it’s not that surprising that they felt that they needed to be candid with the court about their investigation,” he said.

While the judge has yet to rule on the motion, defendants are already celebrating.

“While nobody welcomes an intense federal investigation involving both federal search warrants and a federal grand jury, I am pleased that the United States Attorney and the FBI have both publicly confirmed that they concluded their investigation,” Burum said in a prepared statement.

State and federal authorities worked in a joint task force to investigate Burum and several former San Bernardino County officials for allegedly organizing bribes to push forward the $102 million settlement. Colonies’ underlying complaint against the county involved a dispute over flood control improvements on the developer’s Upland property.

San Bernardino County prosecutors filed charges in 2010 against Burum and the officials. The case has yet to go trial, though one defendant, Bill Postmus, former chairman of the Board of Supervisors, pleaded guilty to those and other corruption charges.

While a federal case won’t proceed on this matter, prosecutors still opposed returning Burum’s property. “In essence, [Burum] seeks an order effectively suppressing in his state criminal case the digital evidence seized pursuant to the
federal search warrants,” wrote Joseph B. Widman, an assistant U.S. attorney.

He argued that the question of whether to suppress the federal evidence should be left to a state judge. Widman referenced a decision by U.S. Magistrate Judge Oswald Parada in an earlier attempt by Burum to retrieve his property. In a hearing on the issue, Parada said, “If the federal government has evidence of criminal wrongdoing and provides that evidence to the prosecuting agency, … I think the judge handling the state case would have to make a determination as to whether that could or could not be used or what ramifications it would have.”

The Central District U.S. attorney’s office declined to comment.

In the defense motion, Burum also accuses federal authorities of handing over the evidence from the federal search without following proper procedures for reviewing the material. In response, Widman concedes that one of the special agents gave evidence to the district attorney’s office; however, there was no violation of any court order. The material remains under seal in the district attorney’s possession until a judge determines its status in the pending criminal case, Widman wrote.

In a brief filed Friday addressing the government’s response, Larson said federal authorities breached a court order by reviewing the digital information seized from Burum’s office and then submitting “false and misleading declarations to cover-up its violations.”

The government’s argument that the the court didn’t “specifically prohibit it from sharing the data with state prosecutors is a red herring,” Larson continued. “The issue here is the government’s blatant violations of the Court’s Order regarding the review of data for privilege and the warrants’ protocols for examining the seized data.”

U.S. District Judge S. James Otero said he will render a decision on the matter without a hearing, according to court papers.

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