Barry Levine, on behalf of a former investor with the Santa Ana developer behind a 271-unit apartment complex known as “The Met at South Coast,” has alleged corruption at City Hall and submitted a bundle of records that he says prove it.

Among other things, the New York-based investor ILUS GP US is alleging that Vineyards Development Corp., developer of the complex, wrote a $10,000 check to a now-defunct Hollywood nightclub called Geisha House that was spent on a party for Santa Ana Councilwoman Michele Martinez.

If that allegation were to be proven, Martinez could be in violation of state law governing gifts received by public officials.

Once partners in The Met, Levine and Ryan Ogulnick of Vineyards Development Corp. are now in a bitter court dispute involving investment in the project.

In addition to his claims regarding Martinez, Levine also asserts that Councilman Roman Reyna violated conflict of interest law because he did not recuse himself from a vote on one of Ogulnick’s projects. However, the amount allegedly given to Reyna was under $750.

YouTube video

Click to watch the heated exchange at last month’s council meeting.

Martinez vehemently denied doing anything improper and from the dais at the last council meeting threatened to sue Levine for slander. “My attorney will be contacting you, because what you’re doing is slander. I do not control a PAC nor was $10,000 ever given to me,” Martinez said.

“What you’re doing is called anti-SLAPP,” replied Levine, a reference to the free speech state statute that is often used to strike down defamation lawsuits.

Levine sent his packet to City Attorney Sonia Carvalho and at the council meeting submitted a copy to City Clerk Maria Huizar.

In an interview last week, Martinez said she has “nothing to hide.” She referred to a recent Voice of OC article on a questionable property deal involving Santa Ana Mayor Miguel Pulido and urged the FBI to launch a full investigation into Santa Ana politics.

“The way I look at it, I believe the FBI should come in and investigate all these allegations,” Martinez said. “Why not bring the FBI? What do we have to hide?”

Ogulnick, meanwhile, denies any wrongdoing and said Levine is a “pathological liar” who will do anything to damage him. He went on to say that he plans on pursuing defamation charges against Levine.

Levine has largely refused to offer any comment to a reporter beyond the allegations he leveled at the council meeting. Bob Bisno, Ogulnick’s attorney, said Levine’s refusal to comment shows he is lying and fearful of a defamation suit.

Levine said he didn’t need to response to Bisno’s claim that Levine is lying because “everyone can evaluate the facts and arrive at their own conclusions. The documents are clear and speak for themselves.”

Martinez has been in trouble regarding campaign contributions before.

During her Assembly campaign, a reporter overheard Martinez saying that she had secured independent expenditures from the Pala Band of Mission Indians. Martinez also improperly voted on the city’s Station District development after receiving a campaign contribution from the developer of that project.

The Geisha House Check

To back up his allegation against Martinez, Levine submitted records to the Santa Ana city clerk that included a check from Ogulnick’s Vineyards Development Corp. with a notation that the money is for a gift certificate. He also included an expense report from the developer that shows a line item payment for the same amount to “Michele Martinez- TO GEISHA”

However, the page of the expense report that notes the check is not among the documents attached to the file in Los Angeles Superior Court that were reviewed by a Voice of OC reporter.

And beyond the missing page, the expense report in the court file and the one Levine submitted to the city clerk appear to be two different versions. For one, the documents are stamped with different dates.

Ogulnick at first said he suspects Levine doctored the records he gave to the city clerk but later retracted those remarks, saying only that the document isn’t accurate.

“It’s not possible [that] it’s a valid document,” Ogulnick said.

In response to Ogulnick’s claim that the document isn’t authentic, Levine forwarded to Voice of OC what he said was the original email chain with the court-appointed receiver, which includes the expense report as an attachment. In the email, the receiver wrote that the expense report came from the developer.

The veracity of the expense report notwithstanding, the court file does contain the check from the developer to Geisha House. And a Voice of OC review of Martinez’s campaign finance filings for her failed run for a state Assembly seat last year show another possible explanation for the check.

Martinez’s campaign finance records show that she received three contributions totaling $10,500 from Geisha House-related entities on April 10 of last year, just one day after the date of the $10,000 check to the nightclub.

A week after receiving contributions from those entities — Dolce Group Concepts LLC, Dolce Group DC LLC and Geisha House LLC, which records show are affiliated with Lonnie Moore and Mike Malin, the owners of Geisha House — Martinez voted April 16 to approve Ogulnick’s apartment complex project in South Santa Ana.

Martinez also voted in favor of the project on March 19, 2012. And she cast two separate votes in favor of another Ogulnick housing project at the last two council meetings.

There are also other ties between Geisha House and Vineyards Development. For example, Bisno has been the attorney for both Malin and Moore and the developer. Also, court records show that attorney Barry King has represented Malin and the developer and that a “Mr. King” was the accountant for Geisha House.

The Met was somewhat controversial. The Planning Commission vote was deadlocked 3-3. And some council members expressed concern that the project’s three five-story buildings didn’t fit their original vision for the site to elevate the city skyline.

Geisha House has also had its own share of problems. A neutral court monitor reported that he found illegal gambling in the “Moon Room” of the nightclub, theft by employees and management and a second set of accounting books that the monitor stated was intended to create a barrier to the nightclub’s finances.

Ogulnick said that the $10,000 gift certificate was originally intended for a fundraiser on behalf of Martinez. But after a poll showed then candidate Tom Daly, who won the race handily, was clearly ahead, Ogulnick decided not to spend the money on Martinez’s campaign, he said.

Instead, Ogulnick claims to have spent the gift certificate on dinner parties not attended by Martinez and that he has at least 20 other people who will confirm that.

A Convoluted Tale

Others involved in the litigation are Levine’s business partner, Ari Schottenstein; King; and another man named Sean Delasandro.

Along with the unreported gift certificate, Levine alleged that Ogulnick made another $10,000 contribution to Martinez’s campaign.

A Voice of OC review found that Ogulnick did contribute $10,000 on May 3, 2012, to the independent expenditure campaign “Martinez for Assembly 2012, Protecting Families for Michele.”

Voice of OC also found that Ogulnick’s entities made tens of thousands of dollars in contributions to the independent committee “Stand up for Santa Ana Coalition,” which supported a term limit ballot measure on the mayor and attack mailers against Pulido, among other city election campaigns.

Martinez said that she hired professional fundraisers to collect money for her, so she doesn’t know who is behind the contributions from the Geisha House-related entities.

“I don’t know how [the contributions from entities connected to Geisha House] is a relationship with the $10,000 gift certificate,” Martinez said. “I’m not worried. I pay my treasurer a lot of money to protect me.”

Levine also claimed that Ogulnick made tens of thousands of dollars in campaign contributions to Councilman David Benavides’ election campaign and that Councilman Reyna received contributions over the limit from companies controlled by Ogulnick and his wife.

It is illegal under the state’s Political Reform Act for elected officials to control independent expenditure committees that support their election. Levine, however, did not submit documents showing that council members controlled the independent committees that supported them.

In his letter, Levine alleges that contributions to Reyna from three entities connected to Ogulnick — totaling close to $750 — should be aggregated and that Reyna’s March 4 vote on one of Ogulnick’s projects was illegal. City law bars council members from voting on matters involving campaign contributors who donated more than $250 to their campaigns within the preceding year.

Ogulnick said that the allegation about Reyna is without merit.

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