In the latest twist in the political scandal involving suspended freshman Supervisor Ed Jew, a federal grand jury indicted the politician Tuesday on five felony charges of mail fraud, extortion and bribery in connection with an alleged scheme to solicit cash bribes from local businesses.
Jew is expected to be arraigned this morning in federal court on two counts of mail fraud, two counts of bribery and one count of extortion.
The latest documents allege that Jew involved himself in a lease dispute between two rival businesses and then used his political position to extort money from both businesses.
The indictment alleges that Jew hatched a scheme to solicit cash bribes totaling $80,000 from Quickly Tapioca drink shops, part of a worldwide chain, which were operating without proper city permits. In exchange for the money, Jew said he would ensure they obtain the necessary permits, the indictment said.
The indictment also alleges that Jew asked for and accepted a $4,000 cash payment from the owner of the Irving Street Wonderful Desserts & Café, a competing business, in exchange for help in obtaining a city permit.
The indictment builds upon a federal mail fraud charge filed against Jew on Sept. 20, which came about five months after the FBI, who were looking for evidence of bribery and had Jew under surveillance. On May 18, the FBI raided his City Hall office, his Chinatown flower shop, his declared residence in the Sunset and a home in Burlingame. The indictment alleges Jew accepted from Quickly owners, on May 7, $40,000 in cash as partial payment of a demanded amount of $80,000.
Jew’s attorney Steven Gruel said Jew “denies any and all charges and we will be in court [today] to plead not guilty to all counts.” He added that “an indictment is nothing more than one side of the story. It’s only the government’s side of the story.” Gruel said Jew will not resign.
The maximum penalty for extortion and mail fraud is 20 years in prison and 10 years in prison for bribery.
In addition to the federal case, Jew is the target of three other legal battles. The district attorney has charged Jew with nine felony counts — ranging from voter fraud to perjury — for allegedly lying about where he lived on election-related documents and when voting. Prosecutors say Jew was living in Burlingame.
City Attorney Dennis Herrera filed a civil lawsuit against Jew on Thursday to oust him from office for allegedly not living in the district he represents as required by the City Charter.
Jew is also undergoing city misconduct proceedings after Mayor Gavin Newsom suspended him from his District 4 board seat on Sept. 25 and filed official misconduct charges against him for violating city residency requirements.
Scheme came amid Irving Street business rivalry
Ed Jew got involved in a feud between warring businesses in the Sunset and extorted cash from both, according to a federal grand jury indictment.
A Quickly tapioca drink shop, part of a chain, moved to 2116 Irving St., next door to a similar business, Wonderful Foods/Wonderful Desserts and Café, at 2110 Irving St. The two stores battled — the Quickly company Web site posting a photograph of the two stores with the caption: “Quickly (LONG waiting line) vs. Wonderful Food (No Customer).”
After operating at the location since 1993, the owner of Wonderful Foods was told its lease would not be renewed and that the Quickly next door would occupy the space.
The Wonderful Food owner turned to Jew for help and the owner “used six intermediaries to contribute $3,000 to the ‘Ed Jew for Supervisor’ campaign,” the indictment said.
In March, Jew discussed with city planners the lease dispute and inquired about the permit status of the Quickly shop. Jew was told the Irving Quickly shop and other Quickly franchises were operating without the proper city permits.
Jew met with the owners of the Irving Street Quickly and asked them to “sublease” the 2110 Irving St. retail space back to Wonderful Foods, the indictment said. When they refused, Jew said they “would have to pay $20,000 in order to operate legally” and if they delayed, the price would increase to $50,000, the indictment said.
The lease dispute was never resolved, and Wonderful Food relocated to 2035 Irving St., but needed a city permit to operate. Jew told the Wonderful Food owner to hire a consultant and said it would cost $5,000, the indictment said. When the owner balked, Jew lowered it to $4,000. Jew then wrote letters to the Planning Commission in support of the permit issuance, which was granted.
Jew also went after the Quickly franchise, demanding $80,000 in cash for permit help.
The road to indictment
March 13-14: Jew receives $3,000 in campaign contributions through six intermediaries acting on behalf of the owner of Irving Street’s Wonderful Desserts and Café who sought Jew’s help on a lease dispute with a neighboring Irving Street Quickly store.
March 14: Jew meets with city planning officials and provides details about the Quickly tapioca chain. A top planning official sends Jew an e-mail saying the chain seems to be in “broad violation” of a formula-retail ordinance. Jew brings up the lease dispute between both drink shops with the officials.
March 15: A volunteer in Jew’s office speaks with the Irving Street Quickly owner, describes himself as someone with “friends in City Hall” and tells the owner the store is “operating illegally and would be shut down” if not brought into compliance.
March 16: Jew visits the Irving Street Quickly store.
March 17-18: Jew visits the store again. An assistant of the store owner contacts Jew and requests a meeting.
March 19: The store owner and assistant meet Jew in his office, where he shows them the Planning Department e-mail, saying it “indicates the shop was in trouble.” Jew tells the owner to pay $10,000 so city officials would “speak favorably on the store’s behalf” and another $10,000 to the “department.” Jew says the price would increase to $50,000 if the payment is delayed. Jew tells the owner to deliver the money to his flower shop in Chinatown by 9 a.m. the next day and says he will only accept cash.
March 21: The store owner visits Jew’s flower shop without the money. A consultant arrives, whom Jew claims the $20,000 is for. Jew says the owner “should pay the money as requested, then we’ll talk.”
March 26: The store owner and store landlord meet with Jew at City Hall, where Jew says all 12 Quickly stores are “in violation.” Jew asks that they gather Quickly owners for a meeting to negotiate a price “for helping with their impending violations.”
March 28: After lease dispute is not worked out, Wonderful Desserts & Café has moved to another location on Irving Street and needs a city permit to operate. Jew writes a letter to the Planning Department supporting issuance of permit.
April 26: Jew receives $4,000 in cash from owner of Wonderful Desserts and Café after having helped owner receive permit.
May 2: The FBI receives permission to eavesdrop on Jew and the consultant.
May 3: Jew and the consultant meet with the Irving Street store owner, the assistant and the distributor for Quickly in Chinatown, where Jew asks how many other store owners have been recruited. He says it would cost $10,000 per shop if the seven or eight other owners were recruited.
May 4: Jew meets the Quickly distributor and two informants posing as store owners at his flower shop, where they tell him eight store owners have agreed to pay $10,000 each. Jew tellsthem the consultant would take the money and help the store owners fill out appropriate permits.
May 7: The Irving Street store owner, assistant and two informants meet Jew in his flower shop, where they give him $40,000 in FBI-marked $100 bills. Jew counts the money, bill by bill.
May 18: The FBI interviews Jew at his flower shop, where he tells them the Irving Street store assistant and landlord came to him of their own volition. He tells the FBI “they asked for help,” but that he referred them to the consultant. Jew met with the store owners and accepted $40,000 on his behalf. He says he did not keep any money. After learning some of the conversations were recorded, Jew admits to keeping $20,000. The FBI searches Jew’s Burlingame residence and finds $10,000 of the marked $100 bills.
Sept. 20: Federal prosecutors charge Jew with mail fraud in connection with the bribery scheme.
Tuesday: Federal grand jury indicts Jew on two counts mail fraud, two counts bribery and one count extortion in connection with the bribery scheme.
Source: U.S. Attorney’s criminal complaint filed on Sept. 20 and federal grand jury indictment filed Tuesday