MjLink Cannabis Business News and Press
Former California Mayor Arrested on Wire Fraud and Bribery Charges Alleging Illicit Payments for Support of Commercial Cannabis Activity
Richard Allen Kerr, 64, of Adelanto, was taken into federal custody without incident. He is charged with seven counts of honest services wire fraud and two counts of bribery.
Kerr, who served as Adelanto’s mayor from 2014 to 2018, was expected to make his initial appearance at the U.S. District Court in Riverside the same day of his arrest.
According to the indictment returned on Aug. 11, as part of his official duties, Kerr 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.
As mayor, Kerr supported cannabis legalization, voted in favor of an ordinance authorizing cannabis cultivation in the city, voted in favor of an ordinance authorizing the operation of medical cannabis dispensaries, and voted to authorize the distribution, transportation and testing of medical cannabis, among other commercial cannabis 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 cannabis 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 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 cannabis cultivation.
The bribes and kickbacks were allegedly 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 allegedly provided favorable official action on behalf of the city to Person A, Person C and other co-schemers with business interests in the city by authorizing various types of commercial cannabis activities, ensuring his supporters obtained the licenses or permits they sought, and interfering with enforcement activities by city officials.
For example, on Nov. 29, 2016, the Adelanto City Council held a public discussion related to an ordinance, including discussion of “overlay zones” within which medical cannabis dispensaries would be located. The initial proposal included two zones, neither of which included a former restaurant—purchased two months earlier by Person A and his spouse.
During the discussion, Kerr requested a change in the boundaries of the second overlay zone, which expanded the zone to include Person A’s business. 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 Dec. 5, 2016, Kerr deposited a $5,000 check—dated Nov. 29, 2016—from Person A’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 Person A’s business in the cannabis dispensary overlay zone. In February, June and August of 2017, Kerr deposited three $10,000 checks from Person A’s law firm, with the memorandum lines of each check stating, “ADVANCE.”
In total, Kerr accepted at least $57,500 in alleged bribes and kickbacks from Person A, 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 U.S. Attorney Sean D. Peterson of the Riverside Branch Office is prosecuting this case.
]]>