SF Contractors in Public Works Corruption Case To Plead Guilty


Thursday the U.S. Attorney’s Office announced that several suspects in their probe into the San Francisco Department of Public Works (DPW) and it’s former director, Mohammed Nuru, will plead guilty. They also named two new suspects and leveled further allegations of bribery in their investigation.

Nuru resigned in February shortly after being arrested for bribery and corruption. He was allegedly involved in schemes to bribe a San Francisco Airport Commissioner and also received bribes from city contractors in the form of free and discounted construction on his private vacation home in Stanford, California.

Alan Varela and William Gilmartin III, president and vice president of civil engineering and construction firm PROVEN Management, are newly named suspects in the ongoing investigation. The pair, who has been gifting Nuru items and other benefits as early as 2013, allegedly exchanged $20,000 in meals and a tractor worth $40,000 for “a steady stream of illegal inside information about a lucrative San Francisco public contract to build and operate an asphalt recycling plant.” If convicted each stands to face up to 10 years in prison and up to $250,000 in fines or twice the gross gain or loss from the alleged bribery scheme.

“Public works contracts in San Francisco are supposed to be awarded on a merit system in San Francisco for the benefit of the residents and taxpayers of San Francisco,” said U.S. Attorney Anderson. “The complaint filed today alleges that this merit system was undermined with insider information and favorable treatment.  Instead of awarding public works contracts on the basis of merit, the defendants allegedly sought to secure significant profits on the basis of bribes and backroom deals.”

Florence Kong, owner of a San Francisco-based construction company Kwan Wo Ironworks and a recycling company called SFR Recovery Inc., was charged in June and is now set to plead guilty in relation to Nuru’s case for lying to FBI Investigators. Kong allegedly offered Nuru cash, a $36,000 Rolex watch, expensive meals, and the installation of a gate for his vacation home in exchange for DPW contracts. When confronted in the initial investigation she denied any such correspondence. However, intercepted calls by the FBI would reveal that Nuru was in fact helping Kong secure contracts from the city.

Balmore Hernandez was also accused of bribery in June and is now also set to plead guilty. The contractor allegedly used his relationship with Nuru to garner city contracts. Hernandez was a longtime employee of San Francisco’s Department of Public Works and is now Chief Executive Officer and Vice President of AzulWorks, Inc., a San Francisco-based construction engineering firm. Nuru would allot contracts to AzulWorks, Inc. in exchange for personal favors such as labor and materials (over $250,000) to help Nuru build his vacation home. Hernandez sought a long term supply contract and lease agreement with the city of San Francisco to operate an asphalt plant on land owned by the Port of San Francisco and to secure a bid for a $1.9 million project for which it had submitted an unqualified proposal.

Varela and Gilmartin mark the seventh and eighth people to be indicted in the probe and Hernandez and Kong are the third and fourth defendants to plead guilty. Hernandez joins other previously suspected contractors Wong and Bovis in agreeing to cooperate with the government’s investigation.

“While our investigation is ongoing, I hope the resolutions in the Hernandez and Kong cases will help restore confidence in our city governments for Bay Area residents,” said assistant investigator Sac Patel. “San Francisco City Hall can and will function without the influence of the corruption we have seen unravel in this case.”

 

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