The Santa Clara County District Attorney’s Office has charged the director of events and marketing of the county fairgrounds with extorting kickbacks from a security company.
Prosecutors allege that Obdulia Banuelos-Esparza of San Jose solicited, accepted and kept for herself up to thousands of dollars each month from the owner of 4 Diamond Security, a Bay Area security firm, in exchange for her recommendation to her employer, the Santa Clara County Fairgrounds Management Corporation, that the security company continue to be retained.
Prosecutors said that after paying the monthly bribes for more than a year, the company refused further payoffs and its contract with FMC was not renewed.
The 41-year-old defendant is expected to self-surrender on the warrant at which time the date will be set for her arraignment on felony charges of bribery and extortion in department 23 at the Hall of Justice in San Jose. If convicted, she faces a maximum sentence of four years in the county jail.
“The fairgrounds are where our community goes for fairs, festivals, and fun,” District Attorney Jeff Rosen said. “Not felonies.”
The Santa Clara County Fairgrounds Management Corporation is an independent non-profit that contracts with Santa Clara county government to manage the fairgrounds. Its contracts with the county to manage the fairgrounds are approved and reviewed by county officials. Contracts that FMC makes with its contractors are not approved or reviewed by county officials, according to prosecutors..
Employees of the fairground management firm are not county employees.
Prosecutors said that no charges were filed against the security company because it is the alleged victim of the extortion scheme.
The district attorney’s investigation began in September 2023 when the DA’s Office received a referral from the county counsel’s Whistleblower Program of a citizen’s complaint alleging various types of wrongdoing, including the kickback scheme.
The investigation, according to prosecutors, showed that Banuelos-Esparza asked the owner of the security company to pay her a percentage of the money the company would be receiving under its contract with fairground management nonprofits.
The owner of 4 Diamond Security initially refused, Banuelos-Esparza accused the company’s guards of sleeping on the job and warned that the contract was in jeopardy. She offered to intervene on the company’s behalf in exchange for the payments. She threatened that the company’s contract would be terminated if the payments were not made.
“Pressured by the economic uncertainties at the height of the COVID Pandemic in the summer of 2020,” the security firm started paying Banuelos-Esparza monthly cash payments calculated at $1 per guard-hour worked, according to prosecutors. The payments started out at around $2,500 per month, but eventually grew to nearly $4,000 per month.
