Beaumont Bond Counsel Stradling Yocca Falsified Documents

On November 1, 2018, the Riverside Grand Jury sent a request for documents to the City of Beaumont regarding the City’s contracts with Developers, the use of CFD Bond Money, and the City’s plan to “fill the gap in public facilities and services due to the missing bond money.”

On December 3, 2018, the Law Firm of Stradling Yocca, acting as Beaumont's Bond Counsel, sent a letter to the Riverside Grand Jury in response to the Grand Jury’s Request for Documents. This was done without the Public’s knowledge as it was never brought before the City Council.

Stradling Yocca made multiple fraudulent statements to the Grand Jury. The statements were made in order to cover up the past $400 Million embezzled out of the City of Beaumont, $300 Million of which was embezzled from the City’s Federal Municipal Bonds, and to defraud banking institutions in order to acquire more bond debt.

Page 4: “While the defendants were charged with embezzlement and misappropriation, neither the complaint, the District Attorney’s allegations nor the plea agreements suggest that the fraudulent scheme resulted in the direct theft of any bond.”

The Embezzlement of Bond Funds from the City of Beaumont is described in the WRCOG TUMF Judgement and the California State Controller’s Investigative Report dated November 5, 2015. The Riverside Grand Jury mirrored its Indictments, dated May 17, 2016, after the State Controllers’ Report and stated “ULC was wired money directly from the bond proceeds.”

Page 4, #1: “Certain members of the City’s former leadership directed development fees paid by third party developers to City coffers for use on City projects..”

In the past most of the Developer Impact Fees came out of the bond funds. Now every penny of Developers’ Mitigation Fees are reimbursed with bond money. nThe Bond Requisitions clearly show Bond Money used to pay the Developers’ TUMF Fees. Judge Chaffee stated in the TUMF Judgement: “City Staff, from then City Manager on down, adopted a position that the City’s TUMF Obligations were satisfied by the City Transportation Projects, largely funded and constructed through C.F.D. 93-1.”

Page 4, 2nd Paragraph: “While these actions are illegal, they did not result in any missing bond funds.”

This statement is fraud, an intentional lie. The City Staff and Council have conspired to hide the City’s past embezzlement of $400 million, $300 million of which was embezzled out of Federal Municipal Bonds.

Page 7, #3: “The City is not aware of instances where CFD bond funds were transferred or relocated for purposes beyond new project development or for paying costs associated with the issuance of the bonds.”

This is in reference to the City’s Transfer of $8 Million from Mello Roos Bonds to pay off the 2001 Wastewater Bond in November, 2014. The City Council and Staff forged government documents in order to transfer the $8 Million from the Sewer Fund to the General Fund. The City is fully aware of their illegal transaction.

Page 7, #4: “Any funds received under this agreement by the City would not be bond proceeds”

Page 7, #5: “The City is not “missing any bond money”

The City is lying. Bond Fund Requisitions show that virtually all of the bond money acquired by the City of Beaumont was either transferred to the City and embezzled or transferred directly to the a bank account with the title “Union Bank Urban Logic Consultants”

The City of Beaumont’s General Fund Revenue is only $18 Million, but its General Fund Expenses exceed $30 Million. The bonds are the only revenue stream available from which to embezzle money.

Page 7, #5: “The required infrastructure within each improvement area for which bonds have been issued has been sufficiently completed to permit full buildout of the homes within these improvement areas.”

Beaumont’s Mello Roos Bonds were not acquired to build houses. The Bonds specifically listed infrastructure projects such as Fire Stations, Recycled Water Facility, Regional Park, and Roadways that were never built.

“The City does not believe there is a “gap in public facilities and services.”

Over 20,000 houses have been built without CEQA EIRs, Fire Stations, Recycled Water, Parkes, or adequate Roadways. The City Council has removed three Elementary Schools and a Jr. High from the General Plan in order to build more houses on the lots. Teachers already have 40 students per classroom.

In the City of Beaumont’s 2019 Bond, page 39, states:

“On June 27, 2019, the Riverside County Civil Grand Jury released a Grand Jury Report addressed to the Riverside County Superintendent of Schools relating to the formation and use of community facilities districts in Riverside County. Although the Civil Grand Jury Report was addressed to the Riverside County Superintendent of Schools, it did contain several recommendations to all public agencies in Riverside County that have formed community facilities districts, including the City. As the Civil Grand Jury Report was not addressed to the City, it has no legal obligation to provide a response. However, the City is currently reviewing the Civil Grand Jury Report and may decide to formally respond to it in the future. The City, the Authority, and the District believe that the Civil Grand Jury Report does not impact the validity of the Bonds or the Local Obligations or the ability of the District to levy the Special Taxes and pay debt service on the Local Obligations.”

This is a fraudulent statement.

“..the Civil Grand Jury Report was not addressed to the City”

Page 8 of the Riverside County Grand Jury Report state that the Report was addressed to the City of Beaumont and the Riverside County Regulatory and Oversight Agencies responsible for assuring the City of Beaumont follows State and Federal Laws.

Riverside County Board of Supervisors

Riverside County Chief Executive Officer (LAFCO)

Riverside County Auditor Controller

Building Industry Association of Riverside County

City of Beaumont

Riverside County Office of Education

“The City, the Authority, and the District believe that the Civil Grand Jury Report does not impact the validity of the Bonds or the Local Obligations or the ability of the District to levy the Special Taxes and pay debt service on the Local Obligations.”

The Riverside County Grand Jury Report outlines the City of Beaumont’s illegal bond and construction scam. The Report uses terms such as “fraud” “deceit” and “conspiracy to mislead the people”.

The Law Firm Stradling Yocca is conspiring with corrupt Elected and Appointed Officials to forge government documents in order to defraud the public and banking institutions.

Stradling Yocca was the City of Stockton’s Bond Counsel that acquire over $300 Million in RDA bonds, which caused the City’s bankruptcy. Stradling Yocca became the Bond Counsel in San Bernardino after its City went bankrupt after acquiring over $300 Million in RDA.