JIM HERRON ZAMORA AND SIMAR KHANNA
OF THE EXAMINER STAFF
Jan. 26, 2000
©2000 San Francisco Examiner

URL: http://www.sfgate.com/cgi-bin/article.cgi?file=/examiner/archive/2000/01/26/NEWS5418.dtl



LANDLORD FREED ON $10 MILLION BAIL
Judge in Berkeley sex case effectively freezes real estate empire


OAKLAND - In an unusual arrangement, Berkeley's largest landlord was

freed from jail after a federal judge ordered him to post $10 million bail and effectively froze his $60 million real estate empire.

The goal is to "make it difficult to sell the property so that he can use the proceeds" to flee, said U.S. Magistrate Wayne Brazil during the bail hearing.

Lakireddy Bali Reddy has been charged with importing illegal immigrants for prostitution and other immoral purposes, and for encouraging workers to come to the United States illegally.

The bail arrangement required a dozen of Reddy's family members to sign a document in which each one agreed to be responsible for the $10 million if the landlord fled the country to avoid prosecution.

The signatories include sons, brothers, in-laws and other family members whose names appear on the title of any of the more than 1,100 rental units owned or controlled by Reddy. Attorneys on both sides valued his holdings at $60 million.

Reddy made bail several hours after one of his two sons, Vijay Kumar Lakireddy, was charged with one count of immigration fraud before the same federal judge.

Lakireddy, 30, who owns and manages Active Tech Solutions, a Berkeley temporary staffing agency, allegedly encouraged and arranged for workers to illegally enter the United States, according to an arrest warrant unsealed in federal court Tuesday.

Lakireddy was released without posting bail or entering a plea. Brazil will hold a bail hearing for him Friday.

"I know that once all the facts come out, everyone will know we did nothing wrong," Lakireddy said. "Unfortunately, I cannot discuss this now. I could write a book about this."

At Tuesday's hearing, both Berkeley City Attorney Manuela Albuquerque and Assistant U.S. Attorney John Kennedy argued the elder Reddy's riches and connections in India would make him a high flight risk.

Referring to Reddy as a "patriarch," Kennedy argued that the

landlord had "access and control over all the properties" regardless of which family member's name was on the title.

Reddy built his business holdings from a Berkeley restaurant and a handful of apartment buildings in the student district in the mid-1970s to an apartment empire that generates $1 million a month in rent for his family.

Workers dependent on Reddy

Prosecutors also argued that, if free, Reddy would have the opportunity to intimidate prospective witnesses, including some of his employees.

"The workers we are concerned about are completely dependent on Mr. Reddy," Albuquerque said.

Prosecutors alleged in court that eight young women who worked for Reddy in Berkeley had disappeared and might have been returned to India to avoid being interviewed by investigators.

Albuquerque said the young women worked as a cleaning crew for Reddy. Her office received tips that the women had disappeared and their work had not been done since Reddy's arrest Jan. 14.

"The cleaners have not been seen for several days; we think they may be back in India," Albuquerque said. "We have not had the opportunity to interview them" about their immigration status or relationship with Reddy.

More potential charges

Reddy may also face separate state charges later this week, said Berkeley police Capt. Bobby Miller. The Alameda County district attorney's office is expected to file charges of statutory rape against Reddy, because he allegedly had sex with two sisters, ages 15 and 17, who were living in one of his apartment buildings.

Berkeley police initiated the criminal investigation after the girls suffered carbon monoxide poisoning at their apartment in November, and the older sister died.

Local detectives cleared Reddy of responsibility in the girl's death, but alerted federal authorities about problems with the girls' immigration status.

Miller said that Berkeley police planned to complete their investigation this week. He hoped that

county prosecutors would file charges against Reddy within a week.

"I think they will move forward on the sex charges for sure," Miller said. "There may be other charges coming later, but I'm not ready to talk about those yet."

Tuesday's hearing room overflowed with Reddy's supporters as well as his detractors in the Bay Area South Asian community. About 30 people had to stand outside the courtroom as attorneys haggled over Reddy's bail.

Brazil said he wanted Reddy's bail arrangement, which was opposed by prosecutors, to keep sufficient pressure on Reddy not to leave the United States for his native India.

"You are on the hook," Brazil told Reddy's relatives before they signed. "It's a substantial risk. . . . None of you will take any steps toward compromising the value (of the real estate) or selling the property."

Highest recent criminal bail

The $10 million bail is the highest in a recent criminal case in the Bay Area. It puts Reddy in the same category as accused Mafia boss John Gotti and ahead of savings and loan executive Charles Keating, who needed $5 million to make bail. But the $10 million bail is by no means the highest in California history. In 1992, drug suspect Ontoniel Urrego was held on $500 million bail after he was indicted for narcotics trafficking and money laundering by a Ventura County jury.

Reddy's attorney, Ted Cassman, originally proposed putting up three buildings worth an estimated $6 million as collateral for the landlord's bail. Cassman later said he was satisfied with the $10 million bail arrangement drawn up by the judge.

Calling $10 million a drop in the bucket for Reddy, outraged activists from numerous community groups plan to hold tandem rallies Saturday at Reddy's Pasand restaurants in Berkeley and Santa Clara.

"We are very upset," said Suma Peesapati,25, a member of the South Asian Bar Association. "We don't believe the amount of bail is sufficient to ensure the defendant will remain in the country."

Reddy, 62, was freed at about 5

p.m. Tuesday from Alameda County Jail in Oakland, 11 days after he was

arrested.

The judge's decision to set bail came despite the objection of prosecutors, who said that Reddy was a flight risk. His ruling came after a two-hour hearing assessing the family's assets.

After reviewing documents provided by the family, Reddy testified that all of his assets were accounted for. While under oath, Reddy told the judge he remembered additional properties in India and the Bay Area that might not be on

the list.

Reddy was released to his younger brother Dr. Hanimi Lakireddy, and will stay at the cardiologist's Merced home during the proceedings. The judge ordered Reddy to surrender daily control of his real estate empire for the duration of the court proceedings. Brazil also warned Reddy to avoid contact with any current or former employees who might be witnesses in his criminal case.

"I don't want any trouble," said Reddy, after promising to abide by the conditions of his release.

A suitcase full of gold

Brazil earlier denied bail after authorities found plane tickets to India and a suitcase full of gold in Reddy's home, plus $55,000 in cash at his downtown Berkeley real estate office.

"Do you have another suitcase?" Brazil asked Reddy in court. "If you have another $10 million in Swiss bank accounts, I want to know about it."

At the hearing, it was clear that the allegations against Reddy had provoked intense reactions from supporters and opponents in the Bay Area's South Asian community.

Reddy's case provided the impetus for South Asian women's groups to mobilize and draw public attention to the hundreds of immigrant workers who are being abused or treated unfairly.

"People knew about the labor violations, but nothing can be done unless people come out - but they fear deportation," Peesapati said. "We eventually want to contact other exploited workers, offer them help and assistance."

Krishna Rao Addagiri said he had decided to attend the bail

hearing to support Reddy, who sponsored him from India to work as a cook at Pasand restaurant in Berkeley.

"He's my well-wisher," Addagiri said. "He treated me like his own family."

Asian Age, a newspaper in India, reported that an estimated 400 residents of Reddy's home village of Vijayawada and the surrounding communities had moved to the United States with the landlord's help.

The newspaper, which is based in New Delhi, reported that many families in Reddy's village in southeastern India had urged him to take their children to America in the hope that they would make money and send some back home.


©2000 San Francisco Examiner Page A1 Examiner