Los Angeles County Assessor John Noguez and a tax consultant pleaded not guilty Thursday to felony charges that include misappropriation of public funds and other counts.
The charges stem from an investigation into allegations that the assessor's office reduced property taxes and assessments in exchange for campaign contributions.
L.A. Superior Court Judge Shelly Torrealba ordered Noguez, 47, and Ramin Salari, 49, to remain jailed on nearly $1.4 million bail, pending a Monday bail review hearing.
At the afternoon hearing, the judge said, "I'm not prepared to change bail today." But she said she was open to considering lowering the bail at next week's hearing.
A third defendant, Mark McNeil, 54, was released Wednesday afternoon on $1.1 million bail and is due in court for arraignment Nov. 7. The three were arrested Wednesday morning.
One focus of the investigation is the relationship between the assessor's office and Santa Monica-based Douglas Emmett Inc., which owns property throughout L.A. County, including the following Beverly Hills locations: 8920, 8383, 9100 and 9601 Wilshire Blvd., 150 S. Rodeo Drive, 301 N. Canon Drive and 414 N. Camden Drive.
Douglas Emmett's chief executive Jordan Kaplan and his wife contributed $10,000 to Noguez, more than any other individual donors, and Kaplan's parents and company executives gave an additional $20,000, according to the Los Angeles Times. Noguez was elected in late 2010.
Within months, Noguez's office slashed the taxable value of Douglas Emmett's properties by $307 million, four times what the company had received in the previous four years, according to a Times analysis of tax records. The county ended up refunding the company more than $4.5 million in 2011, the newspaper reported.
Douglas Emmett's tax bills were reduced an average of 27 percent per building while the average for everyone else was 16 percent, the analysis found.
Attorneys for Noguez and Salari maintained that their clients were not a flight risk and stayed in town even though they knew they were targets of an investigation by the District Attorney's Office.
Noguez lawyer Michael Proctor told the judge that his client "didn't hide" or "go into denial" and stayed at his Huntington Park home, where District Attorney's Office investigators took Noguez into custody.
"We contest the truthfulness of the allegations," said Proctor, who asked that his client's bail be lowered to $100,000.
Salari's attorney, Mark Werksman, also vowed to "rebut and refute and exonerate him of the charges," asking the judge to reduce Salari's bail to $575,000.
"He's been trying to surrender since Monday," Werksman told the judge, noting that his client's daughter had noticed unmarked vehicles outside the family's Phoenix home and that his client was taken into custody at his mother's Encino home.
Deputy District Attorney Susan Schwartz said the allegation that Noguez—also charged under the name Juan Renaldo Rodriguez—accepted bribes from Salari "cut to the heart of the fairness of our processes."
She noted that the misappropriation charges involve an estimated $1.16 million, and maintained that the bail requested by the prosecution was "warranted by the charges."
Noguez—who was elected in November 2010 and is on leave from the assessor's office—is charged with 24 felony counts, including 13 counts of misappropriation by a public officer, five counts of perjury, four counts of accepting bribes and two counts of conspiracy.
Salari is charged with 23 felonies—13 counts of misappropriation, eight counts of bribing an executive officer and two counts of conspiracy.
McNeil is charged with 13 felony counts of misappropriation by a public officer and one felony count of conspiracy.
The criminal complaint alleges that Noguez accepted $185,000 in bribes from Salari between February 2010 and September 2010. Salari also is accused of paying $100,000 in bribes to a former appraiser, Scott Schenter, who was arrested in May in connection with corruption allegations and was the first to be charged.
Soon after receiving the checks and a list of properties represented by Salari, McNeil or his representatives appeared at Assessment Appeals Board hearings that resulted in the reduction of the assessed value on numerous properties.
The complaint also alleges that Noguez approached Schenter between October 2010 and November 2010 and told him to "take care of our buddy Ramin" and "we have to take care of our donors."
Schenter was arrested May 21 in connection with allegations that he falsified documents and reduced property values by $172 million in exchange for campaign contributions to Noguez.
Schenter is awaiting a hearing to determine if there is enough evidence to require him to stand trial on 30 felony counts each of falsifying accounts and falsifying records.
"Criminal charges filed against the assessor allege that instead of acting in the best interests of the citizens of Los Angeles County he turned his back on them to engineer assessment reductions for those who paid for favored treatment," District Attorney Steve Cooley said at a news conference Wednesday shortly after Noguez, Salari and McNeil were arrested.
The district attorney said the arrests were part of an "ongoing, multi-faceted investigation" into allegations of public corruption in the assessor's office.