A Beverly Hills real estate developer has agreed to plead guilty to bribing a former Los Angeles County real estate official in connection with a lucrative lease scheme, a charge that could bring a 10-year federal prison term.
The developer, Arman Gabaee, 61, also known as Arman Gabay, paid the county employee, Thomas M. Shepos, bribes and kickbacks of about $1,000 a month from around 2011 to 2017, according to the plea agreement signed Tuesday.
In exchange, the plea agreement states, Shepos gave non-public information to Gabaee and got him favorable terms on county deals. Shepos cooperated with the FBI and secretly recorded meetings at which Gabaee paid $6,000 in cash bribes, the document states.
Central to the case was the Hawthorne Mall, a property Gabaee owned and was redeveloping. His bribes were meant to induce the county to rent office space for the Department of Public Social Services on the site, a 10-year deal worth more than $45 million, prosecutors said.
Shepos was a senior official in the county’s real estate division whose job was to negotiate leases between property owners and the county. He had the power to green light deals, subject to final approval by the Board of Supervisors.
Under Gabaee’s influence, Shepos pressured a subordinate to make sure the Hawthorne Mall deal “looked good on paper,” the plea deal states.
To secure Shepos’ help in winning the Hawthorne Mall lease, the plea deal states, Gabaee not only paid him monthly bribes but tried to buy a home for Shepos’ use in Northern California wine country.
In April 2017, the plea deal states, Gabaee made offers on a $1-million home in Santa Rosa, but swiftly withdrew the offer after FBI agents confronted him.
As part of the plea agreement, Gabaee, co-founder of the Hollywood-based real estate firm Charles Co., will agree to pay a fine of $1.1 million. He is expected to formally enter the guilty plea on Monday before U.S. District Judge George H. Wu.
In a 2020 court filing meant to counter Gabaee’s claim that he had been entrapped, the U.S. attorney’s office revealed that a telephone wiretap suggested he had not just bribed Shepos but also had “corrupt dealings with other public officials.”
In 2017, the filing stated, Gabaee asked an unnamed high-level official at a public agency to assist a friend with a tax issue, prompting the official to reply: “We’ll help him out.”
According to the court filing, Gabaee then told his friend, “I took care of it for you,” explained that he helped the public official’s friends in “campaigns and things like that,” and added: “Tell no one. Don’t even trust your own shadow.”
In another intercepted 2017 conversation, federal authorities said, Gabaee told a lobbyist to pay off a second public official in a bid to obtain Section 108 funding for a development project in Calexico. “I need somebody who’s got huevos and power too,” Gabaee said, according to the filing.
The wiretaps suggested that Gabaee was “likely giving bribes and/or benefits” to a third public official, who prompted Gabaee to make a $10,000 contribution to an ally’s political campaign in exchange for help on the construction of Gabaee’s home.
That same year, the wiretap captured Gabaee telling a lobbyist that he would write a check to a fourth unnamed public official to “get on his good side” because he would need “help soon in Washington,” prosecutors wrote.
“Defendant is transactional,” prosecutors wrote. “When defendant gives donations or ‘takes care’ of a public official, he expects official acts in return.”
The U.S. attorney’s office has not identified the public officials in question, and declined to comment when asked if they were under investigation.
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Shepos, a Palmdale man who worked at the county CEO’s real estate division for nearly two decades, pleaded guilty in 2018 to making false statements to federal investigators and to signing a false tax return, both felonies.
In his plea agreement, Shepos acknowledged that he did not report $434,000 in bribes and kickbacks over seven years with the county’s real estate division. He said he received bribes not just for the Hawthorne lease but also from an electrical contractor — who would slip him envelopes with $50 and $100 bills — in exchange for help in winning country contracts for electrical work.
Shepos began accepting bribes after “a contentious divorce that left him hopelessly trapped in debt,” his attorney said. Shepos could face eight years in prison when he is sentenced in June.
The L.A. county CEO’s office said the plea deal marked a “milestone toward correcting a series of corrupt acts that led to a betrayal of the public’s trust.”
Since the corruption was revealed, the county said it has introduced measures to strengthen oversight of real estate transactions, including a new management team, annual audits of the real estate division, and a “special strike team” to evaluate policies.