Former San Francisco PUC Chief Sentenced To Four Years In Prison

SAN FRANCISCO - Harlan Kelly Jr. was sentenced today to four years in prison and ordered to pay a $10,000 fine after being tried and convicted of participating in a long-running honest services fraud bribery conspiracy and a separate bank fraud scheme and conspiracy, announced First Assistant United States Attorney Patrick D. Robbins, FBI Special Agent in Charge Robert K Tripp, and IRS Criminal Investigation (CI) Acting Special Agent in Charge Michael Mosley of the Oakland Field Office.  The sentence was handed down by the Hon. Richard Seeborg, Chief U.S. District Judge, following a 12-day jury trial.

“By abusing his position and violating his duty of trust, Harlan Kelly betrayed the people of the City of San Francisco in service to his personal greed,” said First Assistant U.S. Attorney Robbins. “Today’s four-year prison sentence sends a clear message that public officials who violate their oath of office and betray their duty as public stewards will be held accountable.”

“The citizens of San Francisco deserve honesty and integrity from their public officials,” said FBI Special Agent in Charge Robert Tripp. “Kelly, however, put his own personal gain above the people he served, for which he will now spend years in prison. The FBI and our partners will continue to root out and hold accountable government officials who violate the public's trust.”

“Harlan Kelly’s long-running bribery and bank fraud schemes were rooted in greed and are blatant abuses of power,” said CI Acting Special Agent in Charge Michael Mosley. “Today’s sentencing serves notice to those afflicted with such greed and disregard for public trust: you are not above the law and CI special agents along with their federal law enforcement partners work daily to protect and maintain public trust while developing cases that hold criminals responsible.”

Kelly, 61, of San Francisco, was convicted of the crimes on July 14, 2023.  The evidence at trial showed that during the relevant time, Kelly was the general manager of the San Francisco Public Utilities Commission (SFPUC) and one of the highest-ranking appointed officials in San Francisco City government.  The evidence demonstrated that for over six years, while Kelly was leading the SFPUC, he received a stream of bribes from a contractor seeking to be awarded millions of dollars in SFPUC contracts.  The jury concluded Kelly accepted the bribes which included payments for a lavish vacation to Hong Kong and China, construction work on this house, and other benefits.  Further, the evidence demonstrated that in return for bribes, Kelly used his official position to provide aid to a contractor by providing the contractor with internal, confidential PUC documents related to the contract being sought.

In addition, Kelly was convicted of participating in a separate bank fraud conspiracy.  The jury concluded that both Kelly and his co-conspirator Victor Makras, 65, of San Francisco, took steps to defraud Quicken Loans as part of a $1.3 million mortgage loan application. Both Kelly and Makras were convicted of bank fraud and false statements for their respective roles in the scheme.

On May 31, 2022, a federal grand jury handed down a superseding indictment charging Kelly with conspiracy to commit honest services fraud, in violation of 18 U.S.C. § 1349, honest services fraud, in violation of 18 U.S.C. § 1343 and §1346, conspiracy to commit bank fraud, in violation of 18 U.S.C. § 1349, bank fraud, in violation of 18 U.S.C. § 1344, conspiracy to make false statements to a bank, in violation of 18 U.S.C. § 371, and making false statements to a bank, in violation of 18 U.S.C. § 1014. Kelly was convicted of one count of conspiracy to commit honest services wire fraud, one count of honest services wire fraud, and all four counts related to the bank fraud scheme. The jury found Kelly was not guilty of two honest services wire fraud counts.

In addition to the prison term and the fine, Judge Seeborg also ordered Kelly to serve a three-year period of supervised release to begin after his prison term. Judge Seeborg ordered Kelly to begin serving his sentence on June 19, 2024.

Assistant U.S. Attorneys David Ward and Kristina Green are prosecuting the case with the assistance of Tina Rosenbaum.

The prosecution is the result of an investigation by the Federal Bureau of Investigation and the CI. Kelly’s sentencing is the latest in the U.S. Attorney’s six-year investigation into public corruption in San Francisco.  To date, more than a dozen individuals and two corporations have pleaded guilty or admitted their involvement in the sprawling corruption schemes.