By Mark Gutglueck
In a mind-bending turn of events, former Adelanto Mayor Rich Kerr is being sued by the lawyer who less than a month ago was representing him in a lawsuit.
The lawyer and the law firm of which he is a member bear a relationship to one of the principals involved in the political corruption and bribery scandal pervading the four-year-long and yet ongoing effort to transition Adelanto to a marijuana-based economy. Precisely what bearing the falling out between Kerr and that law firm will have on the still-ongoing investigation into public corruption in Adelanto is yet unclear. An unverified report is that Kerr has crossed over to begin a dialogue with federal investigators, one in which he is revealing the depth of depredation that has bedeviled Adelanto for the last four years, in an effort to insulate himself from reprisals and gain for himself lenient treatment from prosecutors.
Kerr, a former Marine, in his maiden sojourn into politics in 2014 was successful in ousting incumbent then-Adelanto Mayor Cari Thomas, Accompanying Kerr’s victory were those of real estate agent John Woodard and Charley Glasper, who defeated then-incumbents Steve Baisden and Charles Valvo. That clean sweep came less than a year-and-a-half after the Adelanto City Council in June 2013 made a declaration of fiscal emergency, a move considered preparatory toward a declaration of municipal bankruptcy.
Shortly after the troika came into office, Kerr and Woodard, in cooperation with then-City councilman Jermaine Wright, embarked on an aggressive program of economic revitalization in Adelanto, the initial centerpiece of which was that the city would welcome cultivators of medical marijuana to set up operation within a circumscribed area in the city’s industrial zone. The city’s policy started out as one which limited marijuana-related businesses to indoor agricultural operations. With Councilman Ed Camargo in constant opposition and Glasper’s lukewarm support, the city council rationalized the approach as one that was on the cutting edge of accepting California’s manifesting liberalization of its cannabis-restriction laws toward the legalization of marijuana first for medicinal purposes and then subsequently, in 2016, for use as an intoxicant. By getting in on the floor of the marijuana revolution, Kerr, Woodard and Wright maintained, Adelanto could allow local businesses to get a corner on the marijuana market and simultaneously, through a taxing and permitting regime, create a revenue stream by which the city could eradicate its deficit.
Ultimately, the city amended its approach from permitting just indoor marijuana farms within city limits to licensing medical marijuana dispensaries, cannabis product derivation and manufacturing concerns, packaging and delivery operations, as well as pot shops where the end product is to be sold to consumers.
Very soon after the city reversed its long extant restrictions on any activity relating to marijuana availability, significant numbers of city staff made an exodus from City Hall, either voluntarily because they disapproved of the direction in which the city was headed and they felt the city was cutting corners in the manner in which it was undertaking the legalization process, or they were terminated outright because the ruling coalition of Kerr, Woodard and Wright considered them to be obstructing the city’s new polices.
Accompanying the shift were suspicions that some among the influx of marijuana and cannabis entrepreneurs into the city were paying certain city officials for favorable positions and treatment within the incipient Adelanto marijuana marketplace. In 2017, Wright, after he accepted $10,000 in cash from an undercover FBI agent holding himself out to be a marijuana distribution business applicant and in return offered an assurance he would assist in warding off the city’s regulators, was arrested and charge by the U.S. Attorney’s Office with bribetaking.
Suspicions dogged Kerr and Woodard, as well. Those suspicions were steeped in circumstances that suggested quid pro quo arrangements existed by which some of the city’s elected leaders were being given money in exchange for approving cannabis-related business license applications or for rezoning property owned or tied up by those applicants to allow businesses involving the cultivation or sale of marijuana to legally operate there.
Among these were the circumstances involving Kerr and David Serrano.
At the April 27, 2016 council meeting, Kerr 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 and 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 an existing structure at 17499 Adelanto Road, the northeast corner of Adelanto Road and Joshua Avenue. The Jet Room had formerly been a bar that catered to airmen stationed at nearby George Air Force Base prior to the base being shuttered by the Department of Defense in December 1992. The Jet Room had struggled thereafter and went out of business in the late 1990s, laying fallow for nearly two decades. On October 3, 2016 David and Julia Serrano entered into escrow with the owner, Dmitri Manucharyan, paying $450,000 for the property. Their declared intention at the time was to convert the building 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. A series of delays kept Ordinance 555 from coming up for the 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, with the designation “Adv Xmas Fund” in the memo line. Kerr deposited the check into one of his accounts and did not report receiving the money on his campaign fund reporting documents filed with the Fair Political Practices Commission.
On January 14, 2017, the Adelanto Grand Prix was staged at and around Stater Bros. Stadium in Adelanto. The promotional event involved a number of local entrepreneurs and had as four of its sponsors Malcolm Smith Racing, American Motorcycle Association, Grand Prix Series and So. Cal. M.C. Many local personages and officials took part in the festivities, including Kerr. That afternoon, Kerr, who was reportedly intoxicated, was riding his own dirt bike outside Stater Bros. Stadium in Adelanto and was being trailed by his children and grandchildren within the Grand Prix area when his front wheel hit a soft spot in the dirt and he was thrown from the cycle. He broke his left collarbone, cracked several ribs and suffered a partially collapsed lung. Kerr was laid up for several days thereafter, but was able to go to City Hall and function out of his office there within ten days of the mishap.
On February 16, 2017, David Serrano submitted $1,000 in fees to the City of Adelanto, in conjunction with a “comprehensive plan” for the Jet Room at 17499 Adelanto Road which envisioned the premises to be used as a marijuana dispensary.
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. Kerr deposited the check into one of his bank accounts 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 benefited 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 Room property was included. Kerr again supported the ordinance allowing the operation of marijuana dispensaries in the city and ratifying the marijuana dispensary overlay zones, benefiting 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 any of 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 one of his bank accounts 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 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 one of Kerr’s bank accounts. Kerr did not disclose the $10,000 as a campaign contribution on any of his Fair Political Practices forms for 2017.
Less than three months later, Councilman Wright was arrested by the FBI. The following year, on May 8, 2018, FBI and IRS agents armed with search warrants descended upon Adelanto City Hall, the Jet Room medical marijuana dispensary, Kerr’s Adelanto home and the San Bernardino Offices of the Professional Lawyers Group, in which a portion of David Serrano’s legal practice is based. Though Kerr was handcuffed while the search of his home was ongoing, he was not arrested.
While Kerr, Woodard, and the woman they succeeded in installing as Wright’s replacement on the council in a special election held in conjunction with June 2018 California Primary Election, Joy Jeannette, continued to dominate municipal function in Adelanto in the summer and most of the fall of 2018, on November 6, 2018, Kerr and Woodard, both of whom had sustained considerable adverse publicity over the fallout from Wright’s arrest and reports of irregularities attending the marijuanification of Adelanto, failed to gain reelection and were turned out of office. Glasper, who at that point was in the throes of senility, did not seek reelction. Three newcomers, Gabriel Reyes Stevevonna Evans and Gerardo Hernandez, were elected in their stead, the second time in four years that there was a clean sweep in the Adelanto City Council race.
The FBI probe into issues of public corruption was yet ongoing. Difficulties for Adelanto officials were manifesting, in no small measure because the tax revenue that Kerr, Woodard, Wright and subsequently Jeannette vowed would accompany the start up of dozens of marijuana-based and cannabis-related businesses had not manifested, with indications that the payment of permit and licensing fees had been waived for many of those businesses at the direction of the city’s politicians.
There was intense scrutiny of David Serrano. When he and his wife had made the purchase of the Jet Room, Woodard had served as the broker on the sale, picking up a substantial commission. Woodard had then participated in the discussions and council decisions that expanded the city’s zoning for marijuana-based businesses to include the Jet Room property. Many saw this as an open-and-shut-case of a violation of California Government Code Section 1090, which prohibits an elected official from participating in a governmental decision in which he or she has a financial interest. There were other questionable city actions during Kerr’s tenure as mayor which had a beneficial impact on Serrano’s business prospects.
The MJRX Corporation is a creature of David Serrano. MJRX owns the building at 1300 N. Mountain View Avenue in San Bernardino where Professional Lawyers Group is located. David Serrano is, or at least was, the general counsel of Professional Lawyers Group. MJRX is also the parent company of the Jet Room Dispensary. 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 stated 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. 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. Philip Rios has consistently represented the Jet Room as its legal counsel.
On January 14, 2019, the last day before the two-year statute of limitations following Kerr’s motorcycle accident at the 2017 Adelanto Grand Prix elapsed, Kerr, represented by Philip E. Rios and Keith A. Adesko of the Professional Lawyers Group, sued the Adelanto Grand Prix organizers with regard to the injuries he had sustained on January 14, 2017. According to that suit, “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 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. In the sworn affidavit in support of the petition for the search warrants that were served at Adelanto City Hall, Kerr’s home, the Jet Room and at the San Bernardino office of the Professional Lawyers Group on May 8, 2018, FBI Agent Kevin 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.” The lawsuit filed by Rios and Adesko on Kerr’s behalf against the Adelanto Grand Prix sponsors thus appears to have been intended to establish, as the memo lines on some of the checks originating with David Serrano that went to Kerr indicated, that those payments were 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. Nevertheless, the lawsuit was filed and remained in play, without going to trial, for more than eight months.
On October 10, 2019, Philip Rios filed with the San Bernardino County Superior Court to have Kerr’s case against Malcolm Smith Racing and the other defendants dismissed with prejudice, the same day he filed suit against Kerr for breach of contract.
It is not not known what precipitated the sudden show of hostility against Kerr by Serrano’s law firm. Precisely what the falling out between Kerr and his lawyers will mean in terms of the former mayor’s willingness to expose the nature of the illicit dealings between the proponents of marijuana-based and cannabis-related businesses and Adelanto city officials is at this point an open question. One unsubstantiated report was that Kerr, now out of office and without the protection of the Adelanto city attorney or the general machinery of government extended to public officials, has made a practical and tactical decision to cooperate with the FBI, prompting Serrano and his affiliated entities to end their relationship with him.
Efforts to obtain input from the entities involved – Kerr, David Serrano or any of those involved with him in his entrepreneurial undertakings, or the FBI – were unsuccessful.
By Mark Gutglueck