Federal prosecutors have dumped the bulk of a public corruption case after deciding that their star witness – a former California Department of Transportation engineer – had been lying to government investigators and lawyers for well over six years.
During those years, the government portrayed Caltrans as the victim of fraudulent contract manipulations by Clint Gregory, once a senior electrical engineer at the agency; Siavash “Mike” Poursartip, owner of a small Sacramento firm that did business with the department; and Sara Shirazi, who worked part time for a while at the firm.
Poursartip and Shirazi were accused of conspiring between December 2004 and March 2009 to pay bribes to Gregory, who was accused of accepting those bribes. The trio were charged with manipulating the state’s bidding and contracting procedures to wrongfully benefit Poursartip’s business, Infotek Associates, which he founded in 1999.
Defense attorneys Richard Pachter and Chris Wing, who represent Poursartip and Shirazi, respectively, contend the evidence shows Caltrans routinely ignores or circumvents the state’s regulations governing bidding by outside companies and hiring and paying them. The attorneys say their clients were drawn into these questionable practices on multiple deals and contracts simply by following Caltrans’ directions.
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Caltrans spokesman Mark Dinger said in an email: “We take any allegations of employee misconduct seriously. We have fully cooperated with investigators since the onset of this case and continue to do so. However, since Mr. Gregory was terminated in 2010, we can’t comment on developments in this case.”
A year before charges were brought against Gregory, Poursartip and Shirazi in a 2010 indictment, Gregory began informing on his codefendants in return for a putative payoff of leniency.
In a court brief last month, Pachter described a July 2009 meeting that included Poursartip attorney at the time and now Sacramento Superior Court Judge James P. Arguelles; Wing, a prominent defense attorney; defense investigator Joe Sheehan, a retired FBI agent who worked on financial crime for the bureau; Assistant U.S. Attorney Robin Taylor, the case’s initial prosecutor; FBI Special Agent Todd Davis; and Javier Ramos, an investigator for the state.
The defense team “explained that Mr. Poursartip and Ms. Shirazi had not defrauded or deceived Caltrans; rather, they had simply done what they were authorized and directed to do by Caltrans” in what “essentially amounted to creative and frequently vague ways of purchasing hardware, software and services,” Pachter’s brief says.
Attached to the brief is an FBI report on the meeting that says the defense team “provided information on their theory of the case. They also provided two spreadsheets for ‘Chain Control Project’ and ‘Mapping Project’ indicating the costs for Infotek’s development of those projects using Caltrans money paid on unrelated contracts.”
The brief further states that Caltrans also knowingly paid Infotek for items the company had not provided and directed Infotek to pass along those monies to big companies doing other business with the transportation agency.
Pachter wrote: “The fact that Caltrans … played games with its invoicing process may be distressing to an uninformed observer or to state taxpayers, but it is a simple fact that this is how Caltrans chose to do business.
“Thus,” Pachter’s brief states, “the government knew that it was Caltrans’ employees, not Infotek’s, that set in course the purchase order and invoicing arrangement that underlies the Indictment.”
“After this meeting,” Pachter recounted in the brief, “Mr. Gregory spun a tale of bribery that the government believed and included in the indictment.”
Nearly a year after the meeting – on July 29, 2010 – the grand jury indictment came down, and a month later Gregory pleaded guilty to two counts of mail fraud based on payments totaling $196,209 from the state to a “straw bidder” allegedly fronting for Poursartip.
On Oct. 26, more than five years after the indictment, Pachter filed his brief, and the next day, prosecutors dropped the charges against Poursartip and Shirazi.
In the government’s motion to dismiss the charges against Poursartip and Shirazi, prosecutors disclosed how Gregory, in multiple interviews both before and after his guilty plea, “discussed three payments evidenced in bank records” that represented bribes to him from Poursartip and Shirazi “to keep him happy and ensure continued business for Infotek with Caltrans.”
But, the motion continues, on Oct. 21 while preparing for the Nov. 9 start of the trial of Poursartip and Shirazi, a prosecutor aggressively questioned Gregory “concerning the three alleged bribe payments. He conceded that, in fact, there was no reason for his codefendants to know that the payments they made were going to Gregory, as opposed to the fictitious companies to which the checks were written. He further conceded that his earlier statements regarding purported discussions with his codefendants about the bribe payments were not accurate. In sum, he conceded that these payments were not bribes.”
Since then, the motion continues, prosecutors “re-evaluated” the case, which now “fails to implicate a federal interest sufficient to justify the expenditure of resources necessary to try this case and engage in associated litigation.”
U.S. District Judge Morrison C. England Jr. granted the prosecutors’ motion to dismiss Poursartip and Shirazi on Oct. 28. Gregory’s sentencing is set for March 3.
Neither Pachter nor Wing is known to talk publicly about their cases. But they made an exception due to the circumstances surrounding this case.
“My client and I are gratified that justice has been done and that the government has finally recognized that its case was based upon lies,” Pachter, a former federal prosecutor, said in an email. “I must say, however, that I wish they had ‘aggressively questioned’ their witnesses before they charged my client and made him suffer through six years of false allegations and wrongly tarnished his professional and personal reputation.”
Wing said in an email: “This case should never have been indicted. Before it was filed, we identified the fatal problems in the government’s conception of the facts but, without notice to us, they indicted the case based on false information. It is frustrating that it took the government so long to realize that what my co-counsel and I were saying was correct.”
Pachter’s brief was in response to a prosecutors’ motion – filed 15 days before they dropped the charges – seeking to preclude evidence at the upcoming trial of questionable contract and acquisition practices at Caltrans.
Through spokeswoman Lauren Horwood, the U.S. Attorney’s Office maintained in an email that its decision to dismiss the charges against Poursartip and Shirazi “was made on the government’s own initiative and was the result of a process that began well before” Pachter’s brief was filed.
“The government disagrees with many of the allegations raised in that brief, including in particular the claim that Caltrans is not a victim in this matter.”
The prosecutors said “the guilty plea entered by the case’s lead defendant … Clint Gregory, remains intact.” They said that until Gregory has been sentenced, “the government cannot offer further comment.”
Gregory attorney Donald Heller declined to comment for this story.
“Hopefully, these unfortunate events will be a wake-up call for the bigwigs at Caltrans about their procurement process,” Wing said.
Denny Walsh: 916-321-1189
- 1999 – Siavash “Mike” Poursartip starts Infotek Associates
- 2004-2009 – Infotek Associates conducts multiple deals and contracts with Caltrans
- July 2009 – Meeting brings together defense and prosecuting attorneys, defense investigator, the FBI and state investigator
- August 2009 – Clint Gregory begins informing on Poursartip and Sara Shirazi
- July 29, 2010 – A federal grand jury indicts Gregory, Poursartip and Shirazi
- August, 2010 – Gregory pleads guilty to two counts of mail fraud
- Oct. 13, 2015 – Prosecutors seek to preclude evidence of Caltrans’ contract and acquisition practices
- Oct. 26, 2015 – Poursartip’s attorney, Richard Pachter, files court brief outlining defense theory of case
- Oct. 27, 2015 – Prosecutors drop charges against Poursartip and Shirazi
- Nov. 9, 2015 – Trial of Poursartip and Shirazi was scheduled to start
- March 3, 2016 – Gregory scheduled to be sentenced