click to enlarge Photo from 2013 by Thor Swift for The New York Times

Thomas Espinosa's grandiose dreams of making a fortune in cannabis ultimately came crashing down.



Thomas Espinosa noticed that there was something about the property at 4136 Rifle Lane in the Oakland hills that didn't match city records. Behind a single-family home was a small backyard cottage that the owner never obtained permits to build. So Espinosa opened a case file with the city for unpermitted construction.

It was November 2013, and it was one of the first instances in which investigators from Oakland's Public Ethics Commission concluded that Espinosa had been involved in wrongdoing. Espinosa may have previously accepted bribes or kickbacks or illegally mixed his personal contracting business with his work for the city, but under Oakland's Government Ethics Act, PEC investigators don't have the authority to examine his earlier dealings.

The case that Espinosa filed for 4136 Rifle Lane remained open until February 2016 when a prospective homebuyer noticed it and called Espinosa for details. According to PEC investigators, Espinosa visited the property again and warned the buyer of "significant potential fines." As a result, the buyer backed out of the sale.

That same month, according to PEC investigators, the broker who was trying to sell the house, Bill Charman of Gimme Shelter, Inc., agreed to meet with Espinosa outside of Oakland City Hall to discuss the problem. It's unclear what exactly Charman expected of this meeting, but what Espinosa allegedly proposed was simple: a bribe.

Espinosa told Charman to write him a $1,500 personal check. According to PEC investigators, Charman did just that, and Espinosa deposited the money into his personal bank account.

Then, Espinosa went into the planning and building department's computer system and waived the building code violation fees and a required field check. He then allowed Charman to obtain over-the-counter permits for additional work that needed to be done at the house. The next day, Espinosa closed the unpermitted construction case.

Charman didn't respond to an email from the Express seeking comment for this story, but according to city records, a new code enforcement case at the Rifle Lane house was reopened this month because the inspections that Espinosa conducted at the property after Charman allegedly paid him off might have been "improper."

The alleged payoff at Rifle Lane was one of dozens of instances of illegal wrongdoing that PEC investigators have alleged against Espinosa. The two-year investigation, led by Milad Dalju, the chief inspector of the PEC, uncovered more than 47 alleged violations of Oakland's government ethics rules by Espinosa. Most of the charges involve alleged bribes Espinosa took from property owners to fast-track their permits or improper private business deals with a landlord whose buildings he'd also worked on as a city inspector. Espinosa now faces fines in excess of $1 million if the Public Ethics Commission sustains the case.

And the case is still expanding. "Since these allegations were published a week ago, we've received additional allegations against Thomas Espinosa," Dalju told the ethics commission on Nov. 5.

One of the additional cases not detailed in the PEC's allegations against Espinosa involves an alleged payoff and the red-tagging of a live-work loft in West Oakland that resulted in seven families being evicted from their homes in 2016. Residents of the building and city officials believe Espinosa colluded with the building's landlord to displace the families.

The FBI has also been investigating Espinosa. And the PEC is examining the activities of another city code enforcement officer.

But whatever Espinosa did on the job with the city is only part of the story. For the past several years, Espinosa has also operated a large cannabis real estate company that at one point controlled up to half-a-million square feet of industrial space in Oakland and Sacramento, and possibly other cities. According to sources with first-hand knowledge of Espinosa's dealings, as well as real estate and court records, at the same time in 2016 he was being pushed out of the city by his superiors who suspected him of corruption, Espinosa was also boldly attempting to become a kingpin of "green zone" properties. And he was allegedly drawing on his city job and contacts to do it, while buying expensive gifts and trinkets for his new bride.

But Espinosa's grandiose dreams of fortune ultimately came crashing down. His business partners, including a network of Chinese cannabis investors, have sued him, alleging that he defrauded them out of millions of dollars. And last summer, he went bankrupt.

Darker allegations have also surfaced against him. An anonymous letter sent to multiple city officials in October 2016 alleged that Espinosa was not only using city resources to pursue his fortune in cannabis real estate but was also involved in the "sex trafficking and exploitation of women and girls."

During a recent phone interview with the Express, Espinosa acknowledged his involvement in the cannabis industry, but he maintained his innocence in the face of multiple criminal accusations and ethics violations. He blamed the city for driving him to quit and the FBI for financially ruining him.

"These guys took me through complete hell," he said about the city. "I had a million-dollar business. They had the FBI following me and every

person I did business with, so I had to file for bankruptcy recently."

Espinosa said he's been scapegoated for the building inspection division, a city department that has a history of corruption and gross mismanagement. "I'm the guy they kicked out," he said.