LOS ANGELES – The Los Angeles County assessor’s office has given favorable treatment to connected taxpayers, allowing them to pay lower property taxes for years and costing the county millions of dollars in lost revenue, according to a whistleblower lawsuit filed by three employees.
Stephen Adamus, Yvonne Austin and Scott Woods say County Assessor Jeff Prang, his top managers and county lawyers have violated tax codes to benefit property owners with ties to elected officials by giving them favorable decisions on reassessments, the Los Angeles Times reported. The trio alleges the county has intentionally lost legal cases, reversed property tax decisions and reimbursed millions of dollars to individuals and corporations in back taxes.
In a lawsuit filed last Friday in Los Angeles County Superior Court, the three say they were “pressured to unlawfully change unfavorable tax decisions they made during a taxpayer’s reassessment.” When they did not go along with their bosses, they were punished and effectively turned into clerks, the suit states.
“This is the county’s dirty little secret when it comes to property taxes. It is one rule for the connected and another for the public,” said Greg Smith, a veteran labor lawyer representing the employees. “They threaten them, ostracized them, told them not to discuss the scheme on emails, and when they would not go along with the conspiracy, literally put one of them, a top manager, to work in a windowless room.”
Prang’s office said the lawsuit is without merit, calling the assessor a reformer who took over in 2014 in the aftermath of a scandal.
“Simply put: This lawsuit is groundless,” spokesman Steve Whitmore said. “It’s been filed by three disgruntled assessor employees alleging members of the assessor executive team and county counsel conspired to provide preferential treatment to connected taxpayers that resulted in millions of dollars in illegal tax refunds.
“We are certain that the claims will be found meritless once the facts of the case are presented. We want to emphasize that we do not retaliate against our employees, and we have taken great measures to prevent what happened in 2012 from ever reoccurring in the office.”
Allegations of corruption have long plagued the county assessor’s office. Criminal charges are still pending against former Assessor John Noguez, who in 2012 was accused of taking $185,000 in bribes from a tax consultant in exchange for a reduction in property values for clients.
Prang took over two years later. He previously was a special assistant in the office and a West Hollywood councilman.
According to the lawsuit, the assessor’s office has repeatedly reversed property tax decisions of connected owners, even when those residents have lost challenges with an assessment appeals board, a decision meant to be binding.
Court documents show several groups and individuals have received special treatment, including the Rand Corp., various apartment complex owners and property developers, and a San Marino property swap involving John Barger, the brother of County Supervisor Kathryn Barger.
The suit states the assessor’s office used executive referrals from county supervisors or others that circumvented the usual system of determining a property’s value and its appropriate taxes. Upon receiving an executive referral, the three employees were told to drop all of their work and complete an *exclusion, exception and/or exemption with 10 days.”
Whitmore disputed that Tuesday.
“Executive referrals stopped in 2012 and [were] not replaced. We don’t do that anymore. It was scrubbed immediately after Noguez,” he said, according to The Times.