Crime & Justice

Santa Fe Springs councilman took bribes from marijuana dispensary in exchange for insider city info

Another city official in the Southland faces federal bribery charges for taking bribe money in exchange for insider city information about marijuana regulations.
Another city official in the Southland faces federal bribery charges for taking bribe money in exchange for insider city information about marijuana regulations.
City of Sante Fe Springs

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In an emotional statement Thursday night, Santa Fe Springs Councilman Joseph Serrano, 62, resigned after admitting that took $11,500 in bribes from a marijuana dispensary operator in exchange for insider information about what the city would do about regulating dispensaries.

Los Cerritos Community Newspaper recorded video of Serrano’s resignation.

“I am saddened, embarrassed, regretful and angry at myself,” he said. Serrano, who has spent nine years on the city council, said he acted alone and that his other council members were not involved. His official resignation takes effect July 31.

Based on the plea agreement Serrano accepted, he first began asking for money in 2010 from an undisclosed marijuana dispensary operator. The operator and Serrano signed phony documents to make it look like the $1,500 payment was a loan. After that, the dispensary operator told the FBI what was going on, he turned into an informant and an investigation into Serrano began.

“Joseph Serrano kept coming back to him basically every month asking for bribe payments,” said Assistant U.S. Attorney Margaret Carter. Serrano even asked for money to pay his mortgage bills and a relative’s medical bills.

Santa Fe Springs doesn’t have an ordinance against, in support of or regulating medical marijuana dispensaries. The bribes took place at a time when the city was debating whether to restrict the number of dispensaries in the city, run a lottery system for licensing or ban them outright.

“I’m going to do everything I can to keep you where you’re at,” Serrano told the informant. “I’m going to put the pressure on the rest of the Council.” Serrano also said he could swing another council member’s vote. At that time, Serrano and another council member sat on a subcommittee debating dispensary regulation.

“It’s kind of perplexing,” said Santa Fe Springs city manager Thaddeus McCormack. He said Serrano acted alone.

“I’m not aware of any similar types of actions by other council members,” McCormack said. “There has been unanimous support toward eliminating these facilities as far back as July of last year.”

Robert Ortiz ran Whittier Hope Collective until he recently shut down his medical marijuana dispensary because of a letter from the federal Department of Justice. He said he shopped different cities, including Santa Fe Springs, to see about obtaining a license before opening his Whittier location in 2010.

“They didn’t necessarily seem like they were going to go into talks that would be less than professional,” Ortiz said. But he said he didn’t want to take chances in a city without a clear “yes or no” rule on dispensaries.

“It just seemed like they were opening the door to problems,” he said. “Let’s face it. There are a lot of people who are trying to take advantage of the medical marijuana industry.”

The mayor of Cudahy, a council member and a longtime city official were arrested and charged last week for soliciting and accepting $17,000 in bribes from a medical marijuana dispensary to open a shop in Cudahy. The operator was also an FBI informant.

Carter would not comment on whether the informant in the Cudahy bribery case was the same informant in the Santa Fe Springs bribery case, but a footnote on the Cudahy case affidavit is interesting.

The CI related that a high-ranking official in the city where the CI’s dispensary was located had solicited bribery payments from the CI, and that the CI had paid more than $10,000 in bribes to that official over the course of several months. After the CI reported the bribery scheme to the FBI and became an informant, the CI received a notice from the city requiring him to close his marijuana dispensary.

The investigation into Serrano’s bribes ended last September. That’s also the approximate deadline the city gave marijuana dispensaries still operating in Santa Fe Springs to shut down.

In his resignation speech Thursday, Serrano said people would inevitably try to draw connections between his bribery case and bribery charges against the Cudahy city officials.

Santa Fe Springs Mayor Bill Rounds released a statement that said, “I’m also saddened for the City because his indictment may be seen as another example of widespread political corruption in southeast Los Angeles County. Let me assure you, nothing could be further from the truth.”

Serrano faces a maximum 10-year prison sentence and a $250,000 fine. Serrano is due in federal district court July 12.

You can read the full plea agreement below:

Santa Fe Springs Bribery - Serrano Plea Agreement1