The co-founder of the Charles Company, the developer behind the Melrose Triangle project in West Hollywood, has been arrested on federal bribery charges.
According to a statement from the U.S. Department of Justice, Arman Gabaee, 57, known professionally as Arman Gabay, was arrested this morning at his home in Beverly Hills. Gabay has been charged with allegedly paying monthly bribes to a Los Angeles County employee for six years and offering to purchase the employee a Santa Rosa home for nearly $1.1 million in exchange for getting the county to enter into a $45 million lease with the Charles Company.
Gabay’s Melrose Triangle is a major project consisting of three buildings with a total of 300,000 square feet on a plot of land bounded by Santa Monica Boulevard, Melrose Avenue and Almont Drive at the city’s border with Beverly Hills. It will house offices, restaurants and shops and 76 residential units.
In addition to the Melrose Triangle project, the Charles Company has proposed building a 19-story hotel topped with a helicopter landing pad at 9034 Sunset Blvd. next to the Marriott Edition. The Charles Company has submitted a plan for that project to the City of West Hollywood. The Charles Company is a partnership between Armand Gabay and his brother Mark Gabay.
Gabay’s Excel Property Management has been a major donor in West Hollywood City Council election campaigns. For example, in 2015 Excel donated $10,000 to a so-called independent expenditure committee that backed the campaigns of councilmembers John D’Amico, John Heilman and Lindsey Horvath and challenger Joe Guadarrama.
The county employee who Gabay alleged bribed has not been named and is said to be cooperating with the FBI. The Department of Justice said the employee negotiated leases for the county to rent office space from private parties and had “significant autonomy to contractually bind the county.”
The complaint alleges that Gabay paid the employee cash bribes of $1,000 or more every month for six years “in exchange for county leases, non-public information, and other benefits.” According to the complaint, Gabay paid the employee thousands of dollars during covertly recorded meetings in late 2016 and early 2017.
In 2017, Gabay allegedly offered to purchase a Northern California residence for the county employee in exchange for the employee’s help in getting Los Angeles County to lease space in the Hawthorne Mall, which Gabay was redeveloping. According to the complaint, Gabay wanted the county to enter into a 10-year, $45 million lease to rent space in the Hawthorne Mall for the Department of Public Social Services and other county departments.
The FBI’s investigation and intercepted communications described the steps Gabay took last year to buy a house for the county employee as a bribe to commit the county to the Hawthorne Mall lease. Gabay ultimately settled on a home on eight acres of land in Santa Rosa wine country that was listed for $1,095,000, the Justice Department said. Without ever seeing the property, Gabay allegedly told an associate to “make the offer” on the home “ASAP” as a bribe for the employee.
Intercepted communications allegedly showed Gabay taking steps to try to disguise his ownership interest in the property, telling the associate that the offer on the property could not be in Gabay’s name and that he wanted to conceal his ownership interest in the property through some type of entity.
In April 2017, Gabay allegedly placed two offers on the Santa Rosa residence, first for $1,035,000 and later for $1,065,000. According to the complaint, immediately after FBI agents approached Gabay and told him they were aware of the bribe arrangement, Gabay’s offer on the property was withdrawn within hours.
“Business leaders who use their wealth and influence to corrupt our government are a scourge on our community,” United States Attorney Nicola T. Hanna said. “No one, no matter how prominent or wealthy, is above the law.”
If convicted of the bribery charge alleged in the complaint, Gabay would face a statutory maximum sentence of 10 years in federal prison.
This case is being prosecuted by Assistant United States Attorneys Ruth C. Pinkel and Lindsey Greer Dotson of the Public Corruption and Civil Rights Section.