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October 30, 2007
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So. Calif. sheriff indicted on federal charges

By CHRISTINE HANLEY, H.G. REZA and PAUL PRINGLE
Los Angeles Times

ORANGE COUNTY, Calif. — Orange County Sheriff Mike Carona has been indicted on federal corruption charges stemming from a lengthy investigation into allegations that he had misused his office for financial gain, law enforcement officials said Monday.

The indictment, filed under seal, is expected to be made public soon, perhaps as early as today, officials said.

A one-time close friend of Carona, former Assistant Sheriff George Jaramillo, already has pleaded guilty in the case, his attorney confirmed Monday. In the plea, Jaramillo admitted that he had collected cash and gifts worth about $45,000 and had filed false income tax returns concealing the income.

As part of the plea agreement, Jaramillo is cooperating with prosecutors in the continuing investigation of Carona. "He has cooperated in the past, has cooperated while in jail and will continue to cooperate in the future," said Jaramillo's attorney, Robert Z. Corrado. Jaramillo currently is serving a 12-month sentence on state charges.

Federal investigators "were asking questions about Carona's activities since he was elected sheriff," Corrado added. Investigators asked Jaramillo specifically about "gifts and monies" Carona had received, the attorney said.

Jaramillo and prosecutors reached the plea agreement months ago. It was sealed while investigators continued to pursue the case against Carona but is expected to be made public at an arraignment today, officials said.

Carona's longtime political adviser and attorney, Michael Schroeder, said federal authorities had not questioned the sheriff or officially informed him he was a target of the federal investigation. Schroeder, who was in Amsterdam on business, also said that rumors of the investigation had not distracted Carona from his job.

"He's focused on the fires," said Schroeder, who does not represent Carona in criminal matters.

Carona's defense attorney, H. Dean Steward, did not return a call to his cellphone. The sheriff did not respond to a request for an interview.

An indictment would mark a spectacular fall for the 52-year-old sheriff, who only five years ago was widely seen as a rising star in California Republican politics. Carona received widespread attention after he led the search for the killer of a 5-year-old girl, Samantha Runnion, whose kidnapping and murder captivated the nation. In the months after that case, Carona was often mentioned as a possible lieutenant governor candidate on a slate with Arnold Schwarzenegger.

But even as he gained attention in the political realm, Carona was coming under attack from critics who accused him of improper management and ethical lapses.

His conduct had hurt the department's integrity and morale, according to the critics, who pointed in particular to allegations that he had issued badges and concealed-weapons permits to campaign contributors without background checks or ensuring that they had proper training. Carona denied that the badges were political favors and said his conduct was proper.

Despite attacks on his character and repeated calls for his resignation, Carona was narrowly reelected to a third term as sheriff in 2006. By then, however, state and federal investigations into his conduct had begun.

In August, the state Fair Political Practices Commission agreed to a settlement in which Carona paid a fine of $15,000 for eight incidents in which he had billed his campaign committee for thousands of dollars in non-itemized expenses that he listed only as "loans."

Those charges arose after The Times reported last year that Carona had billed his elections committee for an estimated $130,000 in loans from 2001 to 2003 that were actually expenses.

The Times reported in January 2006 that federal officials subpoenaed records from Carona's reserve deputy program and election committee. This followed disclosures that the government had subpoenaed documents from his charitable foundation.

The full scope of the federal investigation remains unknown. But one apparent focus is a scheme outlined in Jaramillo's agreement to charges of tax evasion and mail fraud. Jaramillo's plea could lead to a sentence of as much as 23 years in prison and tens of thousands of dollars in fines. But Corrado said he hoped his client's cooperation would spare him a lengthy sentence.

The 30-page plea agreement describes Jaramillo's involvement with individuals identified as "M.C." and "D.H." Corrado said the initials stand for Carona and former Assistant Sheriff Donald Haidl.

The plea agreement says that beginning in late 1998 or early 1999, Haidl arranged for Jaramillo and Carona to be appointed to the boards of directors of several companies that paid them compensation or honorariums. In the plea, Jaramillo conceded receiving $7,000 from Charity Funding Services, a firm owned by Haidl's uncle. The plea agreement says Carona also received monthly payments from the charity company, as well as an unspecified amount of cash from Haidl.

In addition, the agreement said, Haidl used a partnership he controlled to pay about $23,700 in lease costs for Jaramillo's 1997 Mercedes-Benz. The partnership later sold the car for $12,000.

Jaramillo broke the law by failing to report either the $7,000 or the $23,700 on his income tax returns, according to the agreement.

The agreement states that Jaramillo defrauded citizens of "their right to his honest services" by failing to report thousands of dollars in gifts he received from Ed Grech, owner of a company in Brea that manufactures custom limousines. As a public official, Jaramillo was required to report gifts on state disclosure forms that are filed each year and made available to the public.

The plea agreement refers to the gifts as being given by "E.G.," but Corrado confirmed that the initials refer to Grech. Among the gifts were $12,000 in cash in 2003; travel and hotel accommodations, including a $6,000 trip to Cabo San Lucas, Mexico, in 2001, that involved the use of Grech's private plane and yacht; a $456 stay in Las Vegas; and a tailored suit and 12 custom dress shirts worth $2,500.

Jaramillo was first accused of misusing public funds and conflict of interest in 2004. Those accusations involved allegations that he had worked as a paid consultant for CHG Safety Technologies Inc. of Newport Beach, which had designed a high-tech laser device to stop cars fleeing police.

Jaramillo helped stage demonstrations of the invention with sheriff's deputies. In 2005, the Orange County Grand Jury charged Jaramillo with conspiring with CHG owner Charles H. Gabbard to obstruct justice and take bribes to help promote the device.

The bribery counts alleged that Jaramillo was paid in 2000 and 2001 with three checks totaling $25,000. The fourth bribery count alleged that Gabbard gave Jaramillo's sister-in-law, Erica Hill, a job as a clerical assistant at Jaramillo's request. Hill was initially arrested and charged with Jaramillo, but prosecutors later dropped the charges.

Then, in January 2007, Jaramillo pleaded no contest to lying to the grand jury and misusing a county helicopter. He agreed to serve a year in jail as part of the plea.

Jaramillo has been serving his state sentence in a pay-to-stay facility in Montebello and is expected to be released next month.

--

christine.hanley@latimes.com

hgreza@latimes.com

paul.pringle@latimes.com

Times staff writers Joe Mozingo and Scott Glover contributed to this report.

--

Michael S. Carona

Age: 52

Career: Joined the Orange County Marshal's Department in 1976. In 1988, at 33, he was selected marshal of Orange County. In 1998, he was elected the 11th Orange County sheriff -- running the nation's fifth-largest sheriff's department -- a post to which he has been reelected twice. He was once a favorite in Republican Party circles. CNN's Larry King called him "America's Sheriff" after the successful hunt in 2002 for the killer of 5-year-old Samantha Runnion, whose kidnapping and murder captivated the nation. But his time in office has been marred by scandal. Critics accused him of management and ethical lapses that they said undercut departmental integrity and morale, including his issuing badges and concealed-weapons permits to campaign contributors without background checks or ensuring they had proper training. He was narrowly reelected to a third term in 2006.

Education: Two master's degrees in management, Cal State Polytechnic University, Pomona; and the University of Redlands.

Personal: Married to Debbie, with one son.

Source: Orange County Sheriff's Department website, Carona for Sheriff website, staff and wire reports

Copyright 2007 The Los Angeles Times

Full story: So. Calif. sheriff indicted on federal charges






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