Z&L Properties Inc., a California-based property developer, was recently fined $1 million in a federal case for honest services fraud conspiracy. The company admitted to bribing a San Francisco official which depicted a clear example of corruption within property development and city governance.
Brought to light by the Department of Justice, Z&L Properties, a branch of Chinese company R&F Properties Co. Ltd., was ordered to pay the fine as part of a sentence. The company gave bribes to a San Francisco Department of Public Works official, seeking preferential treatment for a construction project.
ICMYI: Z&L Properties, Inc., a Bay Area subsidiary of a Chinese property development co., was sentenced to a $1 million fine for its role in bribing former San Francisco Dept. of Public Works Director Mohammed Nuru ⬇️https://t.co/gT1Xg9jj0h pic.twitter.com/Kq8vjY8HXF
— U.S. Attorney NorCal (@USAO_NDCA) October 16, 2023
Among the charges was the approval or payment of bribes to Mohammed Nuru, the former San Francisco Department of Public Works Director. Including providing him with all expenses paid trip to China in 2018 along with another individual. The aim was for Nuru to act favorably on Z&L Properties' requests in order to complete the construction of a mixed-use property at 555 Fulton Street in San Francisco.
On July 18, Z&L Properties was charged by Information and pleaded guilty on August 17, for engaging in the criminal scheme to bribe officials. In addition to the $1 million fine, a three-year anti-corruption corporate compliance program was recommended by US District Judge the Hon. William H. Orrick.
Zhang Li, a 70-year-old from Guangzhou, China, the owner and controlling member of Z&L Properties, and R&F Properties' chairman, co-founder, and chief executive officer, also faces charges in the scheme. Zhang, after his arrest in London and extradition to the United States, entered into a deferred prosecution agreement with the United States, as reported by the Department of Justice.
This case is an offshoot of a broader federal probe focusing on public corruption in the City and County of San Francisco. In January 2020, Mohammed Nuru was charged with operating a long-standing honest services fraud scheme, pleading guilty to several charges on January 6, 2022. Nuru received a prison sentence of 84 months on August 25, 2022. Another suspect, Wing Lok "Walter" Wong, in June 2020 disclosed his guilt, promising cooperation with the government's anti-corruption investigations. His sentence hearing has been scheduled for January 18, 2024.
