By Mark Gutglueck
Former Adelanto Mayor Rich Kerr was arrested today by the FBI on a federal grand jury indictment alleging he accepted more than $57,000 in bribes and kickbacks in exchange for approving ordinances authorizing various types of commercial marijuana activity within the city, and ensuring his co-schemers obtained city licenses or permits authorizing certain commercial marijuana activities.
Richard Allen Kerr, 64, of Adelanto, was taken into federal custody without incident this morning. He is charged with seven counts of honest services wire fraud and two counts of bribery.
Kerr made his initial appearance this afternoon in United States District Court in Riverside for arraignment. He pleaded not guilty and was released upon the posting of a $30,000 bond. He did not waive his right to a speedy trial, which is set to begin on October 4.
According to the indictment returned on August 11, as part of his official duties, Kerr, who served as Adelanto’s mayor from 2014 to 2018, voted on ordinances governing zoning regulations in the city and served on Adelanto’s Cannabis Dispensary Permit Committee, which determined the number of dispensary permits that would be issued and which applicants would receive them.
“Beginning on an unknown date, but no later than on or about November 23, 2015, and continuing until an unknown date but no earlier than on or about June 18, 2018, in San Bernardino County, within the Central District of California, and elsewhere, defendant Richard Allen Kerr, together with others known and unknown to the grand jury, knowingly and with the intent to defraud, devised, participated in, and executed a scheme to defraud the City of Adelanto as to material matters, including by depriving the City of Adelanto of its right to the intangible right of honest services of defendant Kerr, namely, the honest performance of defendant Kerr’s duties as mayor,” the indictment states. “Specifically, defendant Kerr secretly used his official position to enrich himself and his co-schemers by: (1) passing ordinances authorizing various types of commercial marijuana activities, including marijuana cultivation, marijuana distribution and transportation, and retail sales of marijuana via a dispensary; (2) drafting zones for commercial marijuana activities to include locations used by his supporters; and (3) ensuring his supporters obtained the licenses or permits they sought; all in contravention of conflict of interest prohibitions applying to defendant KERR, and in exchange for bribes, kickbacks, gifts, payments, and other things of value.”
As mayor, Kerr supported marijuana legalization, voted in favor of an ordinance authorizing marijuana cultivation in the city, voted in favor of an ordinance authorizing the operation of medical marijuana dispensaries, and voted to authorize the distribution, transportation and testing of medical marijuana, among other commercial marijuana activities. At the same time, Kerr secretly used his official position to enrich himself and his co-schemers by passing these same ordinances, according to the indictment.
Kerr allegedly also drafted zones for commercial marijuana activities to include locations used by his co-schemers, and he ensured they obtained the licenses and permits they sought – in exchange for bribes, kickbacks and gifts.
Kerr’s alleged co-schemers were David Serrano, a lawyer who specialized in plaintiffs’ tort litigation – identified in the indictment as “Person A” – and two individuals – labeled “Person C and “Person D” – who had business interests in the city, including those involving marijuana cultivation.
The bribes and kickbacks were disguised by Kerr and his co-schemers as gifts, donations to a charitable fund, donations to Kerr’s election campaign, or advance payments for the proceeds of planned litigation associated with a motorcycle accident.
In exchange for the bribes and kickbacks, Kerr provided favorable official action on behalf of the city to Serrano, Person C, and other co-schemers with business interests in the city by authorizing various types of commercial marijuana activities, ensuring his supporters obtained the licenses or permits they sought, and interfering with enforcement activities by city officials.
For example, on November 29, 2016, the Adelanto City Council held a public discussion related to an ordinance, including discussion of “overlay zones” within which medical marijuana dispensaries would be located. The initial proposal included two zones, neither of which included a former restaurant known as the Jet Room, which was located on a 2.23 acre lot at 17499 Adelanto Road, the northeast corner of Adelanto Road and Joshua Avenue purchased for $450,000 from Dmitri Manucharyan by Serrano and his wife, Julia Orama-Serrano in a deal in which escrow was entered into on October 3, 2016 and finalized on October 11, 2016.
During the discussion, Kerr requested a change in the boundaries of the second overlay zone, which expanded the zone to include the Jet Room property. The plans for the business initially called for the building to be an attorney’s office, although they included items such as “elongated sales counters,” a “dispensing room,” “cashier,” and “security room,” the indictment alleges.
On December 5, 2016, Kerr deposited a $5,000 check – dated November 29, 2016 – from Serrano’s real estate trust account into his bank account, and the check’s memorandum line read, “ADV XMAS FUND.”
In May 2017, Kerr voted twice in favor of a city ordinance that included Serrano’s business in the marijuana dispensary overlay zone. In February, June and August of 2017, Kerr deposited three $10,000 checks from Serrano’s law firm, with the memorandum lines of each check stating, “ADVANCE.”
In total, Kerr accepted at least $57,500 in bribes and kickbacks from Serrano, Person C and other co-schemers.
An indictment contains allegations that a defendant has committed a crime. Every defendant is presumed innocent until and unless proven guilty beyond a reasonable doubt.
If convicted of all charges, Kerr would face a statutory maximum sentence of 160 years in federal prison.
The FBI investigated this matter.
Assistant United States Attorney Sean D. Peterson of the Riverside Branch Office is prosecuting this case.
By Mark Gutglueck