A lawsuit filed by three employees of the Los Angeles County Assessor’s Office alleges that Jeffrey Prang and his top managers have allowed politically connected companies and individuals to pay lower property taxes at a significant cost to the county.
Prang, who was elected as L.A. County Assessor in 2014, was a long-time member of the West Hollywood City Council.
The lawsuit, first reported by the Los Angeles Times, was filed on Oct. 4 by Stephen Adamus, Yvonne Austin, and Scott Woods. They allege that the Assessor’s Office reversed property tax decisions and reimbursed millions of dollars to individuals and corporations in back taxes. The whistleblower lawsuit claims that the Assessor’s Office deliberately lost lawsuits filed against the politically influential.
Greg Smith, a lawyer representing the three employees, told the Los Angeles Times that “this is the county’s dirty little secret when it comes to property taxes. It is one rule for the connected and another for the public. They threaten them, ostracized them, told them not to discuss the scheme on emails, and when they would not go along with the conspiracy, literally put one of them — a top manager — to work in a windowless room.”
Prang’s office said there was no validity to the claims.
“Simply put: This lawsuit is groundless,” said Steve Whitmore, a spokesperson for the Assessor’s Office, in an interview with the Times. “It’s been filed by three disgruntled assessor employees alleging members of the assessor executive team and county counsel conspired to provide preferential treatment to connected taxpayers that resulted in millions of dollars in illegal tax refunds.
“We are certain that the claims will be found meritless once the facts of the case are presented. We want to emphasize that we do not retaliate against our employees, and we have taken great measures to prevent what happened in 2012 from ever reoccurring in the office.”
Prang was elected as County Assessor to succeed John Noguez, who in 2012 was accused of reducing property values for certain entities in exchange for bribes. Criminal charges against him are still pending. Prang had been a special assistant in the Assessor’s Office before winning the 2014 election.
In the lawsuit, Adamus, Austin, and Woods claim that special cases known as “executive referrals” or “pinks” were sent to their office by members of the L.A. County Board of Supervisors or the Assessor’s staff.
“When an Executive Referral was made, Plaintiffs were to drop all of their work and … find in favor of the individual or entity if it was an Executive Referral, notwithstanding the law and regulations,” the lawsuit alleges. “Further, when Plaintiffs made an assessment based upon the law against a special taxpayer, it was common for executive staff to request (1) re-review of the assessment, (2) have another staff member that might be more amenable to re-review an assessment, and (3) turn the case over to county counsel for re-review.”
The plaintiffs claim that the County Counsel, Mary Wickham, “would purposely ‘fix’ cases so that the County of Los Angeles would lose in the Superior Court.”
“Consequently, this policy permitted individuals or entities to unlawfully receive millions of dollars in public funds,” the suit alleges.
The lawsuit claims that companies such as the Rand Corp., various apartment complex owners and John Barger, the brother of County Supervisor Kathryn Barger and the former head of the Los Angeles County Employees Retirement Association were given special treatment by Prang and his top managers. In one instance, the suit states, a member of a limited liability company that saw an increase in the assessed value of its property approached Prang at a banquet for the Apartment Owners Association to introduce himself and later emailed Prang help in reversing the assessment increase.
“As a result of the meeting between Prang and the Assessor, the property was sent back for re-review,” the lawsuit alleges. “Hector Ruiz, the ownership clerk, said the assessment would not be changed. Byron Scott McDonald from Legal Services said the assessment would not be changed. Chief Deputy Assessor Santos tried to convince Carolyn James (a chief assessor in the office’s Ownership Services unit) to reverse the re-assessment of the property, but she refused and sent the matter to County Counsel, where the original re-assessment was illegally and promptly reversed in favor of the LLC, and the previous base year of the property was unlawfully restored.”
Other entities that allegedly benefitted from improper decisions by the Assessor’s Office or the County Counsel include the Armenian Association, Luxor Properties, the Paley Center, and Sweetzer Properties LLC, whose properties include 905 Sweetzer Ave. in West Hollywood.