Jury fails to convict building official

A former San Francisco building inspection official charged with massive corruption was acquitted of four minor counts by a jury, which also deadlocked on 29 other charges of bribery and fraud.

The panel deliberated just 16 hours before announcing it was hopelessly deadlocked on all but four charges against Augustine Fallay, a former administrator in the San Francisco Department of Building Inspection’s “one-stop” permitting program.

During the nine-week trial, prosecutors tried to show that Fallay had solicited and accepted bribes, but one juror said Tuesday that the jury didn’t find the prosecution’s star witness to be believable. Juror Bill Wise said a “preponderance” of jurors favored a not-guilty verdict.

Fallay, 49, was arrested in August 2005. Prosecutors charged that he asked for and accepted cash, gifts, a loan and free work on his house in exchange for granting permits to contractors. He also faced insurance fraud charges for allegedly trying to increase payouts after a fire in his Oakland home.

The case against Fallay hinged largely on testimony from Tony Fu, a former contractor, loan officer and friend who arranged a $50,000 loan for Fallay. Fallay approved permits for Fu to tear down a Glen Park house and build condominiums on the site. Fallay maintained that the loan was not a bribe because he fully intended to pay it back.

Fu wore a wire and taped conversations with Fallay during an FBI probe into Fallay’s alleged corruption. Those tapes, which played a large role in the trial, “were believable,” Wise said, but he said Fallay elicited sympathy with jurors when he denied Fu’s ex-wife’s insistence that the loan be forgiven.

Assistant District Attorney Marc Katz said he was “terribly disappointed” with the verdict, but that the District Attorney’s Office will continue to pursue difficult and complex public corruption cases. “We can’t afford not to go after public corruption cases. Everyone in San Francisco is victimized by this,” he said.

Fallay’s attorney, Randy Knox, said, “I’ve got nothing but faith in the jury process.” During the trial, Knox moved to sever the bribery and fraud charges. In his opening statements, he called Fallay a “decent, honest, humble man,” who wasn’t perfect, but who hadn’t committed any crime.

Prosecutors did not indicate whether they will seek a new trial on some or all of the 29 charges about which the jury deadlocked. Fallay was acquitted of three bribery counts for accepting meals and one fraud count.

amartin@examiner.com

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