Trio plead not guilty to new charges in Industry corruption scandal – San Bernardino Sun

Three key figures in a failed $20 million solar proposal bankrolled by the City of Industry pleaded not guilty Monday, March 14, to corruption charges.

The Los Angeles County District Attorney’s Office has expanded the case against the three men since originally charging them in September.

At the hearing, developer William Barkett of La Jolla pleaded not guilty to 44 new counts of forgery. He was previously charged last year with embezzlement, grand theft, money laundering and misappropriation of public funds.

Former state Sen. Frank Hill pleaded not guilty to a new count of misappropriation of public funds. His previous charges related to conflicts of interest.

The third man, Anthony Bouza, an attorney who formerly worked on Industry’s behalf, pleaded not guilty to eight counts of conflict of interest and one count of misappropriation of public funds.

From 2016 to 2018, Industry loaned $20 million to Barkett’s company, San Gabriel Valley Water and Power, for work on a proposal for a 450-megawatt solar project on ranch land located in Diamond Bar and Chino Hills, near the intersection of Los Angeles, San Bernardino and Orange counties.The new forgery charges likely relate to an allegation that Barkett used altered invoices to inflate his costs before receiving reimbursement from the city.

Of the $20 million transferred to SGVWP by Industry, less than $7 million of the funds made it to subcontractors, according to prosecutors. Invoices featured inflated dollar figures, irregular fonts, inconsistent letterheads and other signs that suggested the documents had been altered, according to testimony.

A Southern California News Group investigation in 2020 found that the SGVWP had overbilled the city by at least $1 million through allegedly altered invoices from two of the subcontractors. Several business owners have come forward in the criminal and civil cases against SGVWP and alleged that the invoices provided to the city by SGVWP do not match what those companies actually charged the solar developer.

Barkett is alleged to have used more than $8 million of the public funds for “personal items,” according to the original criminal complaint against him. The personal items include $2 million for his daughter’s wedding in the French Riviera, mortgage payments, timeshare rentals and purchases at a Jaguar dealership, according to court records.

Hill, the former senator, worked as a consultant on the project through the Cordoba Corp., a company hired by Industry at Hill’s suggestion to serve as the project manager on the solar project. Though Cordoba and Hill were working on behalf of the city, Hill allegedly also had a stake in San Gabriel Valley Water and Power. He was paid nearly $700,000 by the city through Cordoba, according to prosecutors.

Similarly, Bouza, the attorney, was hired by Industry to serve as counsel for the Industry Public Utilities Commission and negotiated the lease agreement with San Gabriel Valley Water and Power. City officials would later learn that one of Bouza’s companies was owed $1.5 million by Barkett.

Prosecutors are pursuing their case against Barkett, Hill and Bouza separately from that of former Industry City Manager Paul Philips. A preliminary hearing for Philips to determine if his case can proceed has been ongoing since February and is expected to resume March 23.

Philips, who led the city during the period in question, has pleaded not guilty to a single count of misappropriation of public funds. So far, prosecutors have not directly detailed their allegations against Philips, instead largely focusing on the larger case. But their questioning of witnesses suggests they will argue that Philips failed to carry out the appropriate due diligence when overseeing the project on Industry’s behalf.

An investigator testified that Philips’ signed off on several requests for payment from SGVWP that were supported by obviously forged or altered invoices. Later, prosecutors went over the City Council’s warrant registers, a public accounting of payments that must be approved by the governing body. An analysis of those registers by the Southern California News Group showed that only about $11.5 million of the $20 million disbursed to SGVWP was properly approved in the registers.

A solar expert testified that he warned Philips and others that SGVWP’s proposal was unrealistic.

Philips has denied the allegations. His attorneys have argued that Philips was just one part of a review process involving other staff members and would not have conducted extensive audits of invoices before signing the checks.

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