In a 2018 Twitter photo, Victor Makras, far left, is sworn in as a Port Commissioner along with Gail Gilman by Mayor Mark Farrell.

In a Grand Jury indictment, the United States Department of Justice today accused ousted Public Utilities Commission general manager Harlan Kelly and longtime San Francisco political fixture Victor Makras of defrauding Quicken Loans in a $1.3 million scheme. 

This is the feds’ second run at Kelly, who was, in November, 2020, arrested and charged for an alleged “long-running bribery scheme and corrupt partnership between Kelly and Walter Wong.” Those charges were revisited today regarding Wong, though the notorious permit-expediter and connected contractor was only referred to as “Contractor #1.” 

Today’s development is the latest domino to fall following the January, 2020, federal arrest and charging of erstwhile Public Works boss Mohammed Nuru.

Makras is a veteran San Francisco real estate broker who has sat on a smörgåsbord of city commissions, including the Port Commission, Retirement Board, Board of Appeals, Police Commission and PUC Commission. 

Along with Kelly, Makras is accused of orchestrating a complex fraud scheme purportedly meant to both overstate the money Kelly and his wife, former City Administrator Naomi Kelly, owed to Makras; understate the money the Kellys owed to, among others, Wong for work on the house; and funnel the Quicken Loans money to Wong and other sources of debt. 

Harlan Kelly, right, and Mohammed Nuru in a 2017 tweeted photo by @mrcleansf, Nuru’s account.

The feds allege that by inflating the Kellys’ debt to Makras Investors on their Inner Sunset home, they obtained a loan at an artificially favorable rate. The Kellys also purportedly concealed significant debt, to the tune of hundreds of thousands of dollars, to Wong and others. 

Wong performed nearly $90,000 worth of work on the Kellys’ home and Makras himself loaned the Kellys $70,000. 

Today’s indictment alleges that the Quicken Loans funds, obtained under the auspices of a home refinance, were instead disseminated by Makras to Wong and other sources of debt for the Kellys, including four credit cards with balances totaling some $70,000. 

This is documented via financial transactions as well as written messages between the principals; at one point Makras offered to directly pay the Kellys’ credit card bills. 

“This will avoid a large check going into your account,” Makras texted Harlan Kelly. “Banks do not like seeing anything unusual about the flow of cash in and out of checking savings accounts. This will make the loan process go easy.” 

Kelly concurred. “I agree and just emailed you our credit card statements.” 

The use of a purportedly fraudulent loan to fund Wong’s work on the Kellys’ home puts something of a bow on Harlan Kelly’s November, 2020, indictment.

In those documents, as in today’s, Harlan Kelly was accused of fostering a “corrupt partnership” with Wong in which the latter provided him with gifts, meals, a dream vacation to China and Hong Kong and discounted construction work in exchange for inside information regarding bids on PUC contracts. The alleged fraud scheme detailed today purportedly underwrote Wong’s discount construction work.  

Wong, in June, 2020, pleaded guilty to conspiracy to commit fraud and conspiracy to commit money-laundering and pledged to work with the feds. His handiwork was evident in the reams of documents presented in the November, 2020, indictment of Harlan Kelly.

Kelly will appear on Oct. 20 to face the new charges in San Francisco federal court. Makras’ day in court has not yet been set. Both men are out of custody.  

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Joe was born in San Francisco, raised in the Bay Area, and attended U.C. Berkeley. He never left.

“Your humble narrator” was a writer and columnist for SF Weekly from 2007 to 2015, and a senior editor at San Francisco Magazine from 2015 to 2017. You may also have read his work in the Guardian (U.S. and U.K.); San Francisco Public Press; San Francisco Chronicle; San Francisco Examiner; Dallas Morning News; and elsewhere.

He resides in the Excelsior with his wife and three (!) kids, 4.3 miles from his birthplace and 5,474 from hers.

The Northern California branch of the Society of Professional Journalists named Eskenazi the 2019 Journalist of the Year.

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9 Comments

  1. The puc spent $60K for a “redwood conference table” and $135k on his picnic. And so, so much more. When will his enablers get gone?

      1. I have and as long as you stay away from the concrete suppliers, garbage collectors your fine and I did work in New York for years without being asked for even a lunch on public works, but I can’t even get my Local certification (LBE) in San Francisco since i did not lower Carmen Chu home tax and did not pay Harlan Kelly and Nuru for my previous contract with the SFPUC and clearly not a fan of the cow sitting in room 200. You can’t compare the garbage dump called SF to the Apple.

        1. Hello, buy the Mayor for a new car, no bid garbage contracts.
          Supervisor Peskins hero is Betty Ford.
          Welcome to San Francisco start a car glass company and become rich overnight!

          1. Hey, why not just run for School Board or City College Board to advance your politcal career. Oh wait, lets just have the mayor appoint them to further inflate and corrupt the political pipeline. Dear DPW Director please don’t raise my Recology rate and expect a well funded Holiday party or cash to pay for your latest slick Recology ads. My goodness, what must your employee owners be thinking now?

  2. I can’t help but think that Joe’s reporting had a positive influence on this outcome.

    You have done a great investigation and series of articles on this hornet’s nest of corruption here in SF, Joe! Thank you.

  3. The Makrases and Willie Brown hosted London Breed for her birthday dinner recently. There’s a great picture floating around Twitter of that.

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