By Mark Gutglueck
David Serrano, the owner of the Jet Room marijuana dispensary that has been established in Adelanto, through his law firm paid then-Adelanto Mayor Rich Kerr $35,000 in the days, weeks and months before and after Kerr voted to confer upon the Jet Room permits and licenses to sell marijuana from its 17499 Adelanto Road address, including expanding the city’s marijuana sales zones to include the district where the dispensary is located.
Kerr did not report the money provided to him as political donations, depositing the checks into an account he had ostensibly set up for campaign purposes but which he used for his own personal expenses.
Serrano’s Jet Room was the first marijuana retail operation permitted and up and running in Adelanto, representing a significant deviation from the city council’s initial declared intent, embodied in the passage of Ordinance 539 on November 23, 2015, with regard to marijuana/cannabis-related businesses allowed to function within a specified area in the 53-square mile city’s industrial zone. Initially under Ordinance 539, the city limited the type of such businesses to cultivation operations exclusively, and did not permit the sale of the product to end users within Adelanto’s city limits, prohibiting retail sales of the drug while allowing wholesaling of the crops grown in the city to dispensaries located elsewhere.
At the April 27, 2016 council meeting, Kerr first signaled that the city might allow an alteration of its policy to allow medical marijuana dispensaries to set up operations in Adelanto in the future. Present at that meeting was Manny Serrano, who was the spokesman for the High Desert Cannabis Association. Manny Serrano was also the brother of David Serrano, an attorney affiliated, variously, with the Law Offices of David Serrano and the Professional Lawyers Group, San Bernardino.
On September 22, 2016, David R. Serrano and his wife, Julia Orama-Serrano, initiated the purchase of the Jet Room property, consisting of a 2.23 acre lot and existing structure at 17499 Adelanto Road, the northeast corner of Adelanto Road and Joshua Avenue. On October 3, 2016 they entered into escrow with the owner, Dmitri Manucharyan, paying $450,000 for the property. The transaction was completed on October 11, 2016. Serrano put out that he intended to convert the structure on it, which had formerly been a lounge doing a brisk business among airmen more than two decades previously before George Air Force Base was shuttered in 1992 but which had lain fallow ever since, into a law office.
On October 26, 2016, the Adelanto City Council gave initial approval to Ordinance 553, which allowed medical marijuana dispensaries into the City of Adelanto. Because of a series of delays, the ordinance did not come up for a second confirming vote it needed to go into effect until May 2017. Prior to that second reading of the ordinance, on November 29, 2016, the city council held a public discussion relating to the pending passage of Ordinance 553 allowing the sale of medical marijuana in Adelanto, in particular the boundaries of the city’s marijuana dispensary overlay zones, which were to govern where dispensaries could be located. As a result of that discussion, the council articulated the intent to expand the marijuana dispensary overlay zone to include the property at 17499 Adelanto Road. The same day, November 29, 2016, David Serrano’s wife, Julia Orama-Serrano, cut Kerr a $5,000 check drawn against the Law Offices of David Serrano Real Estate Trust Account at the Bank of America, with the designation “Adv Xmas Fund” in the memo line. On December 5, 2016, Kerr deposited the check into an account ending in the numbers 0917 which he had opened at US Bank in June 2014, and which Kerr had declared in a California Fair Political Practices filing to be the account for his 2014 mayoral campaign. Despite the Fair Political Practices filing identifying that account as one intended for his electioneering funds, Kerr had made another filing with the Fair Political Practices Commission certifying under the penalty of perjury that he had raised no money for and had spent no money on his campaign between January 1, 2014 and December 31, 2014, covering the year he was first elected mayor. Kerr utilized the 0917 account primarily as a personal bank account, using the funds in it for routine purchases at Home Depot, grocery stores and restaurants, drug stores, sporting goods stores and gas stations. In his campaign fund disclosure documents filed for 2016, Kerr made no disclosure of the $5,000 he had received from the Law Offices of David Serrano Real Estate Trust Account.
On February 16, 2017, David Serrano submitted $1,000 in fees to the City of Adelanto, in the form of a check from the Law Offices of David Serrano Real Estate Trust Fund in conjunction with a “comprehensive plan” for the Jet Room at 17499 Adelanto Road.
On February 27, 2017 a check for $10,000 was made out to Kerr against the Professional Lawyers Group, San Bernardino account bearing the indication “Plaintiff Advance” in the memo line. It was deposited into Kerr’s US Bank 0917 account on February 28, 2017. Kerr did not disclose the $10,000 from the Professional Lawyers Group on any of his campaign disclosure filings for 2017.
On March 31, 2017, another check drawn against the Law Offices of David Serrano Real Estate Trust Fund, this one for $1,348, was written to the City of Adelanto with the phrase “Jet Law 17499 Adelanto Road Adelanto” in the memo line.
On May 17, 2017, a revised version of Ordinance 553 relating to allowing marijuana sales to take place in Adelanto, which updated the version of the ordinance first voted upon on October 26. 2016, was given its first reading, passing by a vote of 3-to-1, with Kerr voting in support of the ordinance. That version of the ordinance included a general plan amendment, which expanded the marijuana dispensary overlay zone to include the Jet Room property in the district where the operation of marijuana dispensaries is permitted. Kerr did not disclose having received, at that point, $15,000 from David Serrano and his wife or the entities with which David Serrano is affiliated. Nor did he make an effort to recuse himself from the vote which had benefitted David Serrano and the entities with which Serrano was affiliated.
On May 24, 2017, the second and final reading of and the vote on the revised version of Ordinance 553 took place at that evening’s city council meeting, passing 3-to-1, with Councilman John Woodard abstaining and Councilman Ed Camargo voting no. That vote included the acceptance of the dispensary overlay zones in which the Jet Zone property was included. Kerr again supported the ordinance allowing the operation of marijuana dispensaries in the city and ratifying the marijuana dispensary overlay zones, benefitting David Serrano.
At the same May 24 meeting, the city council passed Resolution 17-12 on a unanimous 5-to-0 vote, establishing the Adelanto Cannabis Dispensary Permit Committee to be charged with determining which applicants for medical marijuana dispensary permits would be granted what was then supposed to be a limit of four such permits.
On June 16, 2017, another check for $10,000 written against the Professional Lawyers Group, San Bernardino account was made out to Kerr, bearing “Advance” in the memo line. Kerr deposited the check into his US Bank 0917 account on June 21, 2017. Kerr did not disclose the $10,000 from the Professional Lawyers Group on any of his campaign disclosure filings for 2017.
On August 23, 2017, then-City Manager Gabriel Elliott publicly announced how the Adelanto Cannabis Dispensary Permit Committee created by the passage of Resolution 17-12 on May 24 of that year was too be fleshed out. The committee, Elliott said, would consist of the mayor and the mayor pro tem, the city planner and two members of the public to be chosen by the city manager. That same day, August 23, 2017, a check was written for $10,000 against the Professional Lawyers Group, San Bernardino account to Kerr, bearing the memo “Advance” and was deposited into Kerr’s US Bank 0917 account that day. Kerr did not disclose the $10,000 as a campaign contribution on any of his Fair Political Practices forms for 2017.
Between March 9, 2015, and November 6, 2017, there were 30 deposits into Kerr’s US Bank 0917 account, primarily cash, totaling $21,757. In this same timeframe, Kerr’s wife, Mistey, was collecting “donations” from the public for a never fully specified charitable cause. Much of the money provided to her during this time consisted of cash-stuffed envelopes provided to her while she was in attendance at the city council meetings her husband was presiding over. On March 17, 2017, Kerr opened another account at US Bank, with an account number ending 9895. Beginning in August 2017 and running until October 12, 2017, Kerr deposited $32,500 in checks made out to “Re-elect Rich Kerr Mayor of Adelanto 2018” from various businesses and business owners in Adelanto into that account. On October 4, 2017, Kerr transferred $22,580.25 from the 9895 account into a third US Bank account, which was designated as Kerr’s official 2018 campaign account, otherwise known as “Richard Kerr DBA Committee to Reelect Richard Kerr,” which bore an account number ending 5129. In the months of October and November 2017, which were roughly one year before the next election for Adelanto mayor, Kerr withdrew $4,980 from his campaign account, using the money for what appears to have been non-campaign related living expenses.
Kerr, who was retired from the Marine Corps, also had a Navy Federal Credit Union Account with an account number ending 1705. This appeared to be his primary personal account into which his monthly military pension of $1,745 was automatically and regularly deposited. At the time of his election in 2014, Kerr was employed by Motorola as a cell tower technician, both installing and upgrading antennas and signal repeaters. By 2015, his status as the mayor of a California city had upgraded his cachet in the corporate world, and he was employed at that point by SDI International. From January 2015 through the end of October 2016, SDI International was making $2,500 weekly deposits into Kerr’s Navy Credit Union 1705 account. Kerr was dropped from the SDI International payroll at the end of October 2016. Kerr by 2016 was also working for Tech USA, LLC, with weekly payments from that entity being deposited into the 1705 account. From January 2016 to May 2016 direct weekly deposits of $2,100 from Tech USA were being made into the 1705 account. From May 2016 until January 2017, the direct weekly deposits from Tech USA into the 1705 account dropped to $1,300 per week. Kerr’s relationship with Tech USA appeared to be drawing to a close at the beginning of 2017, with what was a penultimate direct deposit of $296.99 on January 19, 2017. Four months later, however, it appears he was temporarily reinstated with Tech USA on a short-lived assignment, when Tech USA made direct deposits totaling $5,962.63 into the Navy Federal Credit Union 1705 account in May 2017. Those closed out the direct deposits made into that account by Tech USA.
By early 2017, the FBI had initiated in earnest an investigation into graft and corruption in Adelanto and the atmosphere surrounding the city’s rush toward legalizing all manner of operations with regard to the cultivation, refinement, warehousing, distribution, wholesaling, retailing and the manufacturing of derivatives of marijuana. Some seven or eight months into that operation, two separate FBI agents working undercover with an informant who had access to Councilman Jermaine Wright had tripped him up. One, posing as an arsonist-for-hire, had gotten Wright to pay him $1,500 to torch his restaurant, Fat Boyz Grill, as part of scheme to collect on Wright’s $300,000 fire insurance policy. That agent, whom Wright referred to as an “electrician,” assured the councilman he could make the cause of the fire appear to be an electrical problem. The other undercover FBI agent, who was masquerading as an applicant to establish a marijuana distribution company in Adelanto, paid Wright $10,000 cash – two stacks of 100 $50 bills – in exchange for Wright’s assurance that he would line up votes on the city council to grant the “businessman” the permits he needed and that any code enforcement activities against the marijuana transportation business would be curtailed. When Wright was confronted by a third FBI agent with the evidence that had been accumulated against him, he agreed to cooperate in the FBI’s probe going forward, maintain the confidentiality of the investigation and surreptitiously use a recording device as requested by the FBI to advance the investigation into corruption in the City of Adelanto.
That arrangement did not last long, and fell apart when Wright, who was not aware that the arsonist-for-hire was in fact an undercover FBI agent, approached the FBI informant who had introduced the arsonist-for-hire to him, identified him as a “snitch,” and yet not recognizing that the informant was working with the FBI, made overtures about making arrangements to have “the electrician…go away,” that is, killed. Wright further sought to fake his being assaulted in an effort to convince the FBI and federal prosecutors he was suffering from a head injury and consequent memory loss as a ploy to get out from under having to testify. The FBI at that point ceased its effort to employ Wright as an informant and arrested him.
Prior to that however, the FBI on October 17, 2017 wired Wright up with an audio-recording device and had him engage in an in-person conversation with Kerr at Adelanto City Hall. In the course of that conversation, Kerr told Wright that he had resigned from his job and claimed he had not worked for a year-and-a-half, indicating he had no money coming in other than his pension of $1,745 monthly from the Defense Finance and Accounting Service and roughly $450 after taxes and withholdings, of the $660 per month stipend he received as Adelanto’s mayor. Nevertheless, during that period of time, Kerr and his wife were tooling about town in newly purchased late model luxury vehicles.
As part of its ongoing investigation into Adelanto, the FBI was scrutinizing the generosity business applicants in Adelanto were showing toward the city’s elected leadership. As soon as the city council moved to legalize one form of commercial activity involving marijuana in Adelanto in late 2015, the largesse shown toward the city’s elected leadership escalated.
“An analysis of checks deposited into Kerr’s bank accounts in relation to the legalization of marijuana activities on November 23, 2015 indicated a significant increase,” FBI Agent Kevin Boles told a federal judge in 2018. “In 2015, no checks from Adelanto business owners or marijuana developers were observed. In 2016, approximately $25,000 in checks from Adelanto business owners were deposited [into Kerr’s account]. In 2017, approximately $45,000 in checks from Adelanto businesses or business owners were deposited.”
In conjunction with that element of the investigation that followed the tangent relating to Wright, the FBI obtained on October 16, 2017 a search warrant for the premises of Wright’s restaurant, Fat Boyz Grill, which was served on the following day, October 17. Among the items seized during the search was Wright’s city-issued cellphone. The FBI extracted the data from that phone. According to a document later submitted to a federal judge by FBI Agent Boles, “I conducted a review of the extracted data and observed text message communications between Wright and Kerr from September 4, 2017 referencing a Facebook posting concerning the Jet Room. On September 4, 2017, Wright sent Kerr a text message that read, ‘This doesn’t look good for the process when someone’s bragging that they already got a permit and a license for something we haven’t even held a hearing for.'” Accompanying the text message, Wright attached a screen shot of a Facebook posting by Freddy Sayegh dated August 25, 2017 containing a photograph that Boles presumed to be Sayegh sitting in a chair with a Jet Room poster in the background. The post announced “30 days till the Grand Opening of the Jet Room Dispensary.” Sayegh is an attorney and the chief executive officer of Green Holdings Group, which in some fashion had become involved with David Serrano in the Jet Room.
Kerr replied to Wright’s text, according to Boles, with “Your right. Pls tell these guys to stand down, they are making it really hard to do my job.”
On September 22, 2017, the Adelanto Cannabis Dispensary Permit Committee met to rank the applicants for the dispensary permits. During the meeting Kerr did not disclose that he had received money from the law firms associated with David Serrano totaling $35,000, and he did not recuse himself from voting on the matter. Five applications were considered at the meeting, with one being deemed to not meet the city’s requirements due to the applicant not having title to the property where his dispensary was proposed. The committee signed off on providing permits to the remaining four applicants, who included David Serrano, whose filing related to a license for the Jet Room.
When the search warrant was served at the Fat Boyz Grill on October 17, Boles questioned Wright, who was on the premises at the time. Wright told Boles that he had originally set up the proposed zone for medical marijuana dispensaries to exclude the Jet Room property, with the dispensary zone boundary ending some 14 feet from the property line of the parcel containing the Jet Room. According to a report subsequently written by Boles, Wright told him “The decision to expand the prposed zone to include the Jet Room was advocated by Kerr. During the same interview, Wright disclosed Manny Serrano had previously attempted to bribe Wright by asking, ‘What would it take to put me in the zone?’ Wright told me he never accepted money from Manny Serrano.”
In addition to the application for operating the dispensary at the Jet Room, David Serrano through the Professional Lawyers Group incorporated six corporate entities with the California Secretary of State’s Office on June 12, 2017, each with the general stateed purpose of medical marijuana cultivation or manufacturing. Those six corporations are Beaver Farms East Inc., Beaver Extraction East Inc., Beaver Farms South Inc., Beaver Extraction South Inc., Beaver Farms North Inc. and Beaver Extraction North Inc. All six corporations used the address of Professional Lawyers Group, 1300 N. Mountain View Avenue in San Bernardino as a mailing address and used addresses at 16175 Beaver Road, 16179 Beaver Road and 16173 Beaver Road in Adelanto as their operational addresses. In actuality, officially according to the US. Post Office and the City of Adelanto, the 16173, 16175 and 16179 Beaver Street address do not exist at the location referenced in the filings. Rather, the existing address there, at San Bernardino County Assessor’s Parcel Number 3129261490000, is 16177 Beaver Road Adelanto, California. There are three buildings at the 16177 Beaver Street address. On September 26, 2016, David Serrano and Julia Orama-Serrano purchased the property located at 16177 Beaver Road in Adelanto for $1,825,000, with the sale recorded at the San Bernardino County recorder’s office on October 4, 2016. On November 20, 2017, several gift deeds were filed to reallocate ownership of the land to David Serrano and three individuals, Lisa Marie Guerro, Marcella Christine Castaneda and Jennifer Nicole Serrano. Guerro, Castaneda and Jennifer Serrano are believed to be David Serrano’s daughters. Fifty percent of the ownership remained with David Serrano and 16.6666 ownership was allocated to Guerro, Castaneda and Jennifer Serrano. The six corporations created and registered with the California Secretary of State’s Office on June 12, 2017 have as their incorporating agents and officers Philip Rios, who is an attorney with the Professional Lawyers Group; Manuel Serrano; Julia Orama-Serrano, also known as Julia Serrano; Jennifer Serrano; Lisa Guerra, also known as Lisa Galvan, and also known as Lisa Serrano; Marcella Castaneda; Hector Orama; Luis Orama; and Miguel Orama.
On November 6, 2018, Kerr failed to gain reelection and was turned out of office. Just two days less than six months previously, on May 8, 2018, the FBI had obtained search warrants and served them at Adelanto City Hall, the Jet Room, the offices of the Professional Lawyers Group at 1300 North Mountain View Avenue in San Bernardino and Kerr’s residence at 10679 Melody Place in Adelanto. In the sworn affidavit in support of the petition for those search warrants, FBI Agent Boles referenced the $35,000 received by Kerr from the two law firms associated with David Serrano, and stated, “I believe the payments originating from David Serrano were, in fact, bribe payments to Kerr in return for his official acts of voting on ordinances that directly benefitted the Jet Room. I believe it is likely Kerr maintained his communication with Manny Serrano who, in turn, used David Serrano’s law firm to make the bribe payments as advance payments associated with a fictitious lawsuit in which Kerr is a plaintiff.”
On January 14, 2019, Kerr, represented by two attorneys from the Professional Lawyers Group, Keith Adesko and Philip Rios, filed suit against Malcolm Smith Racing, American Motorcycle Association, Grand Prix Series, So. Cal. M.C. and Adelanto Grand Prix, alleging they were collectively and individually responsible for injuries he had sustained when he was involved in a motorcycle crash at the Adelanto Grand Prix on January 14, 2017 in which he broke his left collarbone, cracked several ribs and suffered a partially collapsed lung. Kerr, who was mayor at the time, was riding his own dirt bike outside Stater Bros. Stadium in Adelanto and was being trailed by his children and grandchildren and within the Grand Prix area when his front wheel hit a soft spot in the dirt and he was thrown from the cycle.
According to the suit, “Defendants, and each of them, plan, operate, manage and promote an annual motocross motorcycle race event at the Adelanto Stadium. As a promotional gimmick, defendants encouraged plaintiff, the then-Adelanto mayor, to participate in the event and promoted his participation. Plaintiff, though an avid and experienced motorcycle rider, at 60 years of age is not physically capable of participating in a dangerous and physically demanding activity like motocross racing. Defendants knew, or should have known, of the demanding nature of the activity and should not have allowed plaintiff to compete in a race, much less promote and exploit the plaintiff’s participation for monetary gain. As a direct and proximate result of defendants’ negligence in allowing plaintiff to compete in a race, plaintiff crashed during the race and suffered serious injuries, including a fractured clavicle, for which plaintiff spent 10 days in the hospital.”
The suit was filed two years to the day after the crash, the last day before the statute of limitations on a civil suit in California expired. Elements of the suit clash with reports that circulated at the time of the crash, in particular one put out by the city’s, and Kerr’s, official spokesman at the time, Michael Stevens, who said Kerr was not riding as part of the race.
The suit is roundly perceived as a means of offsetting the FBI’s working theory that the $35,000 in payments made to Kerr by the Law Offices of David Serrano and the Professional Lawyers Group, San Bernardino were bribes and indeed were, as the memo lines on some of those checks indicated, advances on the settlement to be obtained from Malcolm Smith Racing, American Motorcycle Association, Grand Prix Series, So. Cal. M.C. and Adelanto Grand Prix with regard to the injuries Kerr sustained in the crash.
The difficulty with that defense strategy in the face of any criminal charges pertaining to bribery that might be filed is that the first $5,000 of the $35,000 paid to Kerr by the Law Offices of David Serrano on November 29, 2016 came two-and-a-half months before the motorcycle accident.
As of press time, Kerr has not been charged with receiving a bribe or bribes and David Serrano has not been charged with providing bribes.
Phone calls by the Sentinel to the Professional Lawyers Group, San Bernardino in an effort to obtain statements from David Serrano, Philip E. Rios and Keith Adesko ultimately were routed to Jim Powell, another lawyer with the firm. Asked if Serrano, Rios and Adesko would be willing to go on the record with regard to the issues pertaining to the Jet Room, the $35,000 originating with David Serrano that was provided to Kerr through the law firms he is associated with and the actual substance of Kerr’s suit over the injuries he had sustained at the 2017 Adelanto Grand Prix event, Powell said, “Probably not, but I will pass the message along to them.”
The Sentinel’s effort to make voice contact with Kerr on his cell phone was met with a text message response from Kerr that said “Please text me.” Kerr did not respond to the Sentinel’s follow-up text asking for his version of events relating to the payments he had received from David Serrano and his law firms and Kerr’s votes relating to the Jet Room.
Jet Room Dispensary Proponent Paid Kerr $35K For Project Permits
By Mark Gutglueck