J.1- Received After 3pm — Redondo Beach City Council, February 11, 2025

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JOSEPH T. MCNALLY
Acting United States Attorney

LINDSEY GREER DOTSON
Assistant United States Attorney
Chief, Criminal Division
DANIEL J. O’BRIEN (Cal. Bar No. 141720)
Assistant United States Attorney
Senior Litigation Counsel
Public Corruption & Civil Rights Section
1500 United States Courthouse
312 North Spring Street
Los Angeles, California 90012
Telephone: (213) 894-2468
Facsimile: (213) 894-0141
E-mail: [email protected]
Attorneys for Plaintiff

UNITED STATES OF AMERICA

UNITED STATES DISTRICT COURT

FOR THE CENTRAL DISTRICT OF CALIFORNIA

UNITED STATES OF AMERICA,
Plaintiff,
v.

ZEIN E. OBAGI, JR.,
Defendant.

No.

DEFERRED PROSECUTION AGREEMENT

INTRODUCTION

1. This Deferred Prosecution Agreement (the “DPA”) is entered into between the United States Attorney’s Office for the Central District of California (the “USAO”) and defendant Zein E. Obagi, Jr. (“defendant”). This DPA is entered into only on behalf of the USAO and cannot bind any other federal, state, local, or foreign prosecuting, enforcement, administrative, civil, or regulatory authorities. The USAO is not aware of any pending investigations of, or actions, against, defendant, or any conduct beyond that described in Paragraph 2 below, that could give rise to any investigation of, or actions against, defendant.
2:25-CR-00094-GW
2/11/2025
MMC
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28 2. This DPA is entered into to resolve the USAO’s criminal investigation of defendant’s participation in a scheme to defraud a former client, Eric Dominguez, of both money and Dominguez’s right to defendant’s honest services, by means of materially false and fraudulent pretenses and the concealment of material facts (“the Investigation”).

CRIMINAL INFORMATION AND ACCEPTANCE OF RESPONSIBILITY

3. Defendant consents and agrees to the USAO filing in the United States District Court for the Central District of California, an Information in the form attached to this agreement as Exhibit A, or a substantially similar form, that charges defendant, in Count One, with violations of 18 U.S.C. §§ 1343, 1346: Wire Fraud and Honest Services Wire Fraud. In connection with this agreement to the filing of the Information, defendant, having been fully advised by his counsel, knowingly and voluntarily:
a. Waives the right to indictment on these charges, as
well as all rights to a speedy trial pursuant to the Sixth Amendment to the United States Constitution, Title 18, United States Code, Section 3161, and Federal Rule of Criminal Procedure 48(b), and agrees to reaffirm these waivers at the initial appearance before the court on the Information, if an initial appearance is necessary pursuant to Paragraph 3(e);
b. Waives, relinquishes, and gives up: (i) any right
that defendant might have not to be prosecuted for the offenses charged in the Information because of the expiration of the statute of limitations for those offenses prior to the filing of the Information; and (ii) any defense, claim, or argument defendant could raise or assert that prosecution of the offenses charged in 3 1
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28 the Information is barred by the expiration of the applicable statute of limitations, pre-indictment delay, post-indictment delay, or any speedy trial violation;
c. Waives, relinquishes, and gives up any right to
challenge the form of the charges alleged in the Information, including without limitation that the charges are duplicitous; d. Waives, for purposes of the charges in the
Information and any other charges that may be filed against defendant concerning the Investigation following a finding by the Court of breach under Paragraph 18 below (a “Breach”) and arising out of the conduct described in the Statement of Facts attached as Exhibit B (“Statement of Facts”), any objection with respect to venue in the Central District of California;
e. Following a Breach, and only following a Breach,
defendant agrees to accept service, through counsel reflected in this agreement, of a summons to make an initial appearance on the Information before the criminal duty United States Magistrate Judge, Central District of California, located in the Roybal Federal Building and United States Courthouse, 3rd Floor, 255 E. Temple Street, Los Angeles, California, on a date and time to be agreed upon by the parties to this agreement, but no earlier than thirty (30) days following a Breach and no later than ninety (90) days after a Breach (absent a Breach, defendant is not required to accept service of a summons to appear on the Information in any court of the United States);
f. Following a Breach, and only following a breach,
defendant agrees to make an initial appearance on the Information as specified in the summons; and
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28 g. Absent a finding of Breach, by entering into this DPA, and by waiving indictment in this matter, defendant does not consent to the jurisdiction of the United States in any other matter and reserves his right to assert any defense, claim, or argument to any matter other than the Information described in Paragraph 3.

4. Defendant acknowledges and agrees that he is responsible under United States law for the acts charged in the Information and set forth in the Statement of Facts, and that the facts described in the Statement of Facts are true and correct. Should the USAO pursue the prosecution that is deferred by this DPA following a Breach, defendant stipulates to the admissibility of the Statement of Facts in any proceeding, including any trial, guilty plea, or sentencing proceeding involving the charges in the Information or based on the Statement of Facts, and agrees not to contradict anything in the Statement of Facts at any such proceeding. Defendant’s entry into this DPA does not constitute an admission that he is guilty of the offenses charged in the Information. In the event that the USAO offers the Statement of Facts in any such proceedings, defendant agrees that he will not challenge the admissibility or accuracy of the Statement of Facts, but reserves the right to supplement the Statement of Facts with additional factual information and make any other argument relating to the Statement of Facts.

EFFECTIVE DATE OF AGREEMENT

5. This agreement is effective upon signature and execution of all required certifications by defendant, defendant’s counsel, and an Assistant United States Attorney (the “Initial Effective Date”).
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28 TERM OF THE DPA

6. This DPA is effective for a period beginning on the
Initial Effective Date and ending three years from the Initial Effective Date (the “Term”). Defendant agrees, however, that, in the event of a Breach by defendant, an extension or extensions of the Term of up to six months may be imposed by the USAO for each Breach, without prejudice to the USAO’s right to proceed as provided in Paragraphs 17-20 below. Any extension of the Term extends all terms of this DPA, including the terms and conditions of the requirements in Paragraphs 8-9, for an equivalent period.

RELEVANT CONSIDERATIONS

7. The USAO enters into this DPA based on the individual facts and circumstances presented by this case and by defendant.

Among the factors considered were the following: (a) defendant’s timely willingness to acknowledge and accept responsibility for the actions charged in the Information and set forth in the Statement of Facts, although not admitting that he is guilty of the offenses set forth in the Information; (b) defendant’s lack of criminal history; (c) defendant’s timely satisfaction of a $710,000 judgment imposed against him on March 12, 2020 after a bench trial in the matter Dominguez v. Obagi, et al., LASC Case No. BC700046 (“Dominguez v. Obagi”), which addressed a portion of defendant’s conduct set forth in the Statement of Facts; (d) defendant’s May 3, 2024 suspension from the practice of law for two years, followed by a three-year period of probation, after a bench trial in The Matter of Zein E. Obagi, Jr., Case Nos. SBC-21-O-30528 and SBC-22-O-31072-MC (Consolidated), which addressed a portion of defendant’s conduct set forth in the Statement of Facts; (e) The State Bar Court of 6 1
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28 California findings in the same matter of extraordinary good character; (f) defendant’s agreement to disgorge attorney’s fees received and associated with the representation of Timothy Cullen in connection with the transfer of real estate and funds to third-party nominees and the interpleader of a portion of those funds to the Los Angeles County Superior Court on May 30, 2019 in Obagi Law Group, P.C v. Michael John Oliver, Michael Nishan Baltakian, Eric Dominguez, Tim Cullen et al., LASC Case No. 19STCV18870; (g) the nature and seriousness of the offense conduct; and (h) the legal and factual defenses presented on behalf of defendant.

MATERIAL CONDITIONS OF DEFERRED PROSECUTION

8. During the Term, defendant agrees to comply with the following conditions:
a. No later than the February 18, 2025 open session
meeting of the Redondo Beach City Council (“RBCC”), move to receive and file the DPA as part of the record.
b. Within one hundred twenty (120) days of the Initial
Effective Date, submit a resignation to the State Bar of California (“SBC”), Office of Chief Trial Counsel (“OCTC”). Defendant will execute any agreements with the OCTC and/or the State Bar Court of California and take any other actions necessary to ensure that the resignation is effective and in compliance with SBC rules and procedures. Defendant may not apply for reinstatement of his license to practice law during the term of this agreement.
c. Within one hundred and eighty (180) days of the
Initial Effective Date, pay to the United States $12,740 representing attorney’s fees received and associated with the representation of Cullen in connection with the transfer of real estate and funds to 7 1
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28 third-party nominees and the interpleader of a portion of those funds. The Disgorgement shall be paid by check, certified check, or money order made payable to “United States Department of Justice” and will identify “Zein E. Obagi, Jr. DPA” and the case number on the “memo” line. The payment can be provided to: United States Attorney’s Office, Civil Division, Financial Litigation Section, 300 N. Los Angeles St., Suite 7516, Los Angeles, CA 90012, with email proof of the same provided to the USAO;
d. Not violate any United States law (federal, state
or local), and advise the USAO within 48 hours if arrested for a crime, with the exception of minor offenses that would be excluded for sentencing purposes under United States Sentencing Guideline § 4A1.2(c).

9. Thirty (30) days prior to the end of the Term, defendant will provide to the USAO a certification signed by defendant, and by counsel approving as to form, stating that he has met the conditions set forth in Paragraph 8 of this DPA. The parties to the DPA agree that such certification will be deemed a material statement and representation by defendant to the executive branch of the United States for purposes of 18 U.S.C. § 1001 (false statement to federal agency) and 18 U.S.C. § 1505 (obstruction of federal proceeding), and it will be deemed to have been made in the Central District of California.

CONDITIONAL RELEASE FROM LIABILITY

10. Nothing in this DPA shall preclude or limit the USAO or any government entity from bringing a criminal prosecution against defendant for making false statements, obstruction of justice, perjury, subornation of perjury, witness tampering, or aiding and 8 1
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28 abetting or conspiring to commit such offenses, based on defendant’s conduct in performing obligations under this DPA, including information provided pursuant to this DPA. Further, the USAO may use any information related to the conduct described in the Statement of Facts against defendant: (a) in a prosecution for perjury or obstruction of justice; (b) in a prosecution for making a false statement; and (c) in a prosecution or other proceeding relating to a violation of any provision of Title 26 of the United States Code.

11. The USAO agrees that, absent a Breach, it will not
prosecute defendant for any conduct, other than the charges in the Information or related to the conduct described in the Statement of Facts. This DPA does not provide any protection against prosecution by the USAO for conduct that is not expressly referenced in the Information, the Statement of Facts, or this DPA.

12. This DPA does not provide any protection against
prosecution by the USAO for any other unrelated conduct by defendant occurring before or after the time period described in the Statement of Facts.

13. Nothing in this DPA in any way limits the USAO’s ability to use any information related to the conduct described in the Information or the Statement of Facts in any prosecution or other action not specifically precluded by this DPA

14. Absent a Breach or a prosecution against defendant for conduct described in Paragraph 10, with respect to any prosecution that may be brought against defendant by the USAO, the USAO will not offer in evidence in its case-in-chief the statements in the Statement of Facts.
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28 15. Notwithstanding Paragraph 14 above, the USAO may use all information derived directly or indirectly from defendant for the purpose of obtaining and pursuing leads to other evidence, which evidence may be used for any purpose, including any prosecution of defendant.

DEFERRED PROSECUTION

16. In consideration of defendant’s agreement to the terms set forth in Paragraphs 3, 4, 8, 9, and 22 above, the USAO agrees that any prosecution of defendant for the conduct set forth in the Information and Statement of Facts will, subject to the breach provisions in Paragraphs 17-20, be deferred for the Term. Absent a Breach, the USAO will move the Court to dismiss the Information with prejudice on or before the termination of the Term.

BREACH OF THE AGREEMENT

17. Defendant agrees that if, during the Term, he (a) knowingly and deliberately provides in connection with this DPA false or misleading information regarding a fact deemed material by the USAO; (b) knowingly fails to fulfill completely any of the obligations set forth in Paragraphs 3, 4, 8, 9, and 22 of this DPA; or (c) otherwise fails specifically to perform or to fulfill completely any of defendant’s obligations under this DPA, the USAO may, in its discretion, subject to the procedural requirements of Paragraph 18 below, seek from the Court a finding that defendant has knowingly breached a provision of this DPA. Counsel for defendant will be provided notice of any motion to the Court seeking a finding of breach and have an opportunity to respond to such a motion. Upon such a finding by the Court, defendant shall thereafter be subject to prosecution for any federal criminal violation of which the USAO 10 1
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28 has knowledge, including, but not limited to, the charges in the Information described in Paragraph 3.

18. In the event the USAO determines that defendant has knowingly breached a provision of this DPA deemed material by the USAO, the USAO agrees to provide defendant with written notice of the conduct constituting such breach through counsel reflected in this DPA. Within thirty (30) days of receipt of such notice, defendant shall have the opportunity to respond to the USAO in writing to explain the nature and circumstances of the conduct underlying the alleged breach, as well as the actions defendant has taken to address and remediate the situation, which explanation the USAO shall consider in determining whether to seek from the Court a finding that defendant has breached this DPA. A final determination that a material breach has occurred may be made only upon a finding by the Court, based on a preponderance of evidence, that defendant knowingly breached a provision of the DPA deemed material by the USAO, after notice to defendant and its counsel and an opportunity to be heard by the Court.

19. In the event that the Court determines that defendant has breached this DPA and the USAO determines to pursue prosecution of defendant for the charges in the Information, then: (a) all statements made by or on behalf of defendant to the USAO or to the Court, including the Statement of Facts, and any evidence derived from such statements, shall be admissible against defendant in any criminal prosecution brought by the United States against defendant; (b) defendant waives, gives up, and shall not assert any claim under the United States Constitution, any statute, Rule 11(f) of the Federal Rules of Criminal Procedure, Rule 410 of the Federal Rules 11 1
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28 of Evidence, or any other federal rule that any statements made by or on behalf of defendant prior or subsequent to this DPA, including the Statement of Facts, or any evidence derived therefrom, should be suppressed or is inadmissible, in a prosecution by the United States against defendant; (c) defendant agrees that any applicable statute of limitations for the charges in the Information is tolled between the date of the signing of this DPA and ninety (90) days after the Court’s finding that defendant has breached this agreement; and (d) defendant remains bound by all other waivers expressly made as part of this agreement. Nothing herein shall preclude defendant from asserting a defense based on the expiration of the statute of limitations prior to or on the date that the DPA is signed, to the extent defendant did not previously waive any such applicable statute of limitations period pursuant to tolling agreements previously entered into by the parties collectively from the period of May 2, 2024 through February 15, 2025.

20. Defendant acknowledges that the USAO has made no
representations, assurances, or promises concerning what sentence may be imposed by the Court if defendant breaches this DPA, the USAO follows through with prosecution, and this matter proceeds to judgement. Defendant recognizes that the fact the government has agreed to enter into this DPA shall have no bearing on what sentence the government ultimately recommends after a breach. Defendant further acknowledges that any such sentence is solely within the discretion of the Court and that nothing in this
DPA binds or restricts the Court in the exercise of such discretion.

PUBLIC FILINGS AND STATEMENTS

21. Defendant and the USAO agree that the Information and DPA 12 1
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28 (and its exhibits) shall be filed in the United States District Court for the Central District of California at any time after the Initial Effective Date.

22. Defendant expressly agrees that he shall not, either personally or through any attorney(s), agent(s), or any other person(s) authorized to make statements on behalf of defendant, make any public statement, in litigation or otherwise, contradicting the facts set forth in the Statement of Facts or suggesting in any way that defendant’s entry into the DPA was involuntary or unknowing.

Any such statement by defendant, or directed or knowingly caused by defendant, regarding the Statement of Facts shall, subject to cure rights of defendant described below, constitute a Breach of this DPA, and the USAO may thereafter seek a finding from the Court of Breach.

Defendant may avoid a Breach of this DPA by publicly repudiating such statement(s) within five (5) business days after notice from the USAO of the identified contradictory statement. If the Court finds a knowing Breach, the USAO may then seek prosecution as set forth in Paragraphs 17-20 of this DPA. Defendant shall be permitted to raise defenses and to assert affirmative claims in other proceedings relating to the matters set forth in the Statement of Facts provided that such defenses and claims do not materially contradict, in whole or in part, a statement contained in the Statement of Facts. This Paragraph does not apply to any statement made by any present or former officer, director, employee, or agent of defendant in the course of any criminal, regulatory, or civil case initiated against such individual, unless such individual is speaking on behalf of defendant.
//
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28 LACK OF PRECEDENTIAL VALUE

23. Defendant agrees that this DPA and the terms and conditions set forth herein are limited to the facts and circumstances of this case and lack precedential value.

MISCELLANEOUS PROVISIONS

24. Any notice or report under this DPA shall be provided as follows:
a. Any notice or report to the USAO under this DPA shall be provided (1) via email to [email protected] and (2) personal delivery, overnight delivery by a recognized delivery service, or registered or certified mail, addressed to:

Daniel J. O’Brien
Assistant United States Attorney
Senior Litigation Counsel
Public Corruption and Civil Rights Section
Or
Chief, Public Corruption and Civil Rights Section
United States Attorney’s Office, Central District of California 312 N. Spring Street, 15th Floor
Los Angeles, CA 90012
Notice shall be effective upon confirmed receipt by the USAO. b. Any notice or report to defendant under this DPA
shall be provided (1) via email to [email protected] and (2) personal delivery, overnight delivery by a recognized delivery service, or registered or certified mail, addressed to:

Jennifer Lieser
Kaplan Marino
1546 N Fairfax Ave
Los Angeles, California 90046

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28 of which shall be considered effective as an original signature.

Further, all digital images of signatures shall be treated as originals for all purposes.

26. This DPA is covered by the laws of the United States. The USAO and defendant agree that exclusive jurisdiction and venue for any dispute arising under this DPA is in the United States District Court for the Central District of California.

27. This DPA sets forth all the terms of the agreement between defendant and the USAO. Defendant understands and agrees that, except as set forth in this DPA and its exhibits, there are no promises, understandings, or agreements between the USAO and defendant or its attorneys and that no amendments, modifications or additions to this DPA or its exhibits shall be valid unless they are in writing and signed by the USAO, an attorney for defendant, and defendant.

AGREED AND ACCEPTED
JOSEPH T. MCNALLY
Acting United States Attorney

LINDSEY GREER DOTSON
Assistant United States Attorney
Chief, Criminal Division
DANIEL J. O’BRIEN
Assistant United States Attorney
Attorneys for Plaintiff

UNITED STATES OF AMERICA
Date

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28 ZEIN E. OBAGI, JR.

Defendant
Date

JENNIFER LIESER
Attorney for
Defendant Zein E. Obagi, Jr.

Date

ACKNOWLEDGEMENT BY DEFENDANT
I have read this DPA and its exhibits in their entirety. I have had enough time to review and consider this DPA and its exhibits and I have carefully and thoroughly discussed every part of it with my attorneys. I understand the terms of this DPA, and I voluntarily agree to those terms. I have discussed the evidence with my attorney, and my attorney has advised me of my rights, of the criminal charges and possible criminal charges that might be filed, of possible defenses that might be asserted either prior to or at trial, and of the consequences of entering into this DPA. No promises, inducements, or representations of any kind have been made to me other than those contained in this DPA and its exhibits. No one has threatened or forced me in any way to enter into this DPA. I am satisfied with the representation of my attorney in this matter and am entering into the DPA because I wish to take advantage of the promises and representations set forth in this DPA and its exhibits, and not for any other reason.

ZEIN E. OBAGI, JR.

Defendant
Date

ER LIESER

2.6.2025
ZEIN E. OBAGI, JR.

Defendant
2/6/2025
2/6/2025
EIN E. OBAGI, JR.
romises and representations
nd not for anyother reason
efendant
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28 ACKNOWLEDGEMENT BY COUNSEL
I am Zein E. Obagi Jr.’s attorney. I have carefully and thoroughly discussed every part of this DPA and its exhibits with my client. Further, I have fully advised my client of his rights, of the charges and possible criminal charges that might be filed, of possible defenses that might be asserted either prior to or at trial, and of the consequences of entering into this DPA. To my knowledge (1) no promises, inducements, or representations of any kind have been made to my client other than those contained in this DPA and its exhibits; (2) no one has threatened or forced my client in any way to enter into this DPA; and (3) my client’s decision to enter into this DPA is an informed and voluntary one.

JENNIFER LIESER
Attorney for
Defendant Zein E. Obagi, Jr.

Date

2.6.2025

R LIESER
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28 EXHIBIT A

UNITED STATES DISTRICT COURT

FOR THE CENTRAL DISTRICT OF CALIFORNIA

UNITED STATES OF AMERICA,
Plaintiff,
v.

ZEIN E. OBAGI, JR.,
Defendant.

CR No.

I N F O R M A T I O N
[18 U.S.C. § 1343: Wire Fraud
18 U.S.C. §§ 1343, 1346: Honest
Services Wire Fraud]

INTRODUCTORY ALLEGATIONS
At times relevant to this Indictment:

1. Defendant ZEIN E. OBAGI, JR. was an attorney licensed to practice in the State of California and the owner of the Obagi Law Group, P.C. (“Obagi Law Group”).

2. Timothy Cullen (“Cullen”) and Eric Dominguez (“Dominguez”) were two California businessmen. In 2014, Cullen and Dominguez entered into a partnership to operate a mutual benefit non-profit marijuana dispensary named Valley Herbal Healing Center, Inc. (“Valley Herbal”). On or about October 5, 2016, Dominguez and Cullen hired defendant OBAGI to jointly represent them and their partnership in the sale of assets belonging to Valley Herbal to Equity Growth, 18 1
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28 LLC (“Equity Growth”). The fee agreement with defendant OBAGI and signed by Cullen, stated that any monetary recovery from the sale would be deposited into defendant OBAGI’s client trust account (“CTA”), that the client would be promptly notified of the receipt of such funds with a proposed distribution for approval, and that contested funds would be held in trust until the dispute was resolved.

3. On or about May 24, 2017, Dominguez sent an email to defendant OBAGI informing him that, due to a dispute with Cullen, Dominguez was recusing himself from negotiations regarding the potential sale of Valley Herbal to Equity Growth. On or about May 31, 2017, defendant OBAGI replied that, given the conflict of interest between Dominguez and Cullen, defendant OBAGI was withdrawing his representation of Dominguez effective immediately.

On or about June 2 and 6, 2017, defendant OBAGI sent cease and desist emails to Dominguez stating that defendant OBAGI would continue to represent Cullen, but not Dominguez. Subsequently, the relationship between defendant OBAGI and Dominguez became adversarial.

4. On or about July 7, 2017, defendant OBAGI filed a complaint in the Los Angeles Superior Court (“LASC”) against Equity Growth on behalf of Cullen and Dominguez’s partnership, titled Valley Herbal v.

Eric Drew Shevin and Shevin Law Group, LASC Case No. BC667767 (“the Valley Herbal case”). On or about August 18, 2017, an attorney filed, on behalf of Dominguez a separate complaint, Eric Dominguez v.

Tim Cullen, et al., LASC Case No. BC673006 (“Dominguez v. Cullen”), seeking damages against Cullen for claims concerning the Valley Herbal sale. In response, defendant OBAGI filed a cross-complaint in Dominguez v. Cullen against his former client, Dominguez. On or 19 1
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28 about August 23, 2017, defendant OBAGI filed an amended complaint in the Valley Herbal case, adding Cullen as a plaintiff and naming Dominguez as a defendant. The amended complaint sought declaratory relief that Dominguez was not owed any money from the sale of Valley Herbal. The two lawsuits were related, or combined, on or about December 11, 2017.

5. On or about March 28, 2018, Dominguez’s attorney filed a complaint for malpractice against defendant OBAGI, Dominguez v.

Obagi, et al., LASC Case No. BC700046 (“Dominguez v. Obagi”), alleging that defendant OBAGI abandoned representation and accepted employment adverse to Dominguez without Dominguez’s informed written consent.

6. On or about April 24, 2018, the parties to the various lawsuits reached a settlement in which (a) Equity Growth would pay $1.9 million less unpaid taxes to Cullen by September 25, 2018, and (b) Cullen would pay $515,000 to Dominguez, or 20.5% of any amount less than $1.9 million received by Cullen. Defendant OBAGI required that the full amount of the settlement funds, including the portion of the settlement funds owed to Dominguez, be deposited into his CTA pursuant to a stock purchase agreement executed by Equity Growth, Cullen, and a third party. Defendant OBAGI and the parties understood that Dominguez would be paid his portion of the settlement from the funds received into defendant OBAGI’s CTA. The parties agreed to this arrangement.

7. Under California law, an attorney who assumes
responsibility to hold and disburse funds owes the same fiduciary obligations of loyalty, trust, and candor to a third party as he owes 20 1
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28 to his own client and must maintain records, render accounts, and promptly deliver such funds upon request.

8. On or about September 26, 2018, Equity Growth wired to defendant OBAGI’s CTA $1,828,391.02, which represented the $1.9 million settlement amount less amounts used to pay outstanding state taxes.

9. From on or about September 25, 2018 through on or about October 8, 2018, defendant OBAGI and Cullen were engaged in a dispute with respect to the payment of defendant OBAGI’s attorney’s fees. On or about September 27, 2018, defendant OBAGI retained the disputed attorney’s fee of $128,675.86 within his CTA account and transferred the remainder of the settlement funds, $1,699,715.16, to another attorney retained by Cullen per Cullen’s request. After the resolution of the attorney fee dispute, on or about October 9, 2018, Cullen’s new attorney wired the remainder of the settlement funds, $957,048.49, back to defendant OBAGI’s CTA. Defendant OBAGI then routed the entirety of those settlement funds, approximately $957,048.49, directly to Cullen without transferring to Dominguez his share of the settlement.

10. These Introductory Allegations are incorporated into the sole count of this Information.
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28 COUNT ONE
[18 U.S.C. §§ 1343, 1346]
A. THE SCHEME TO DEFRAUD

11. Beginning on or about October 8, 2018 and continuing until on or about May 26, 2020, in Los Angeles County, within the Central District of California, and elsewhere, defendant ZEIN E. OBAGI, JR. and Timothy Cullen (“Cullen”), together with others known and unknown to the Acting United States Attorney, knowingly and with intent to defraud, devised, participated in, and executed a scheme to defraud Eric Dominguez (“Dominguez”) as to material matters through the use of materially false and fraudulent pretenses, representations, and promises, and the concealment of material facts to deprive Dominguez of: (a) moneys and funds and (b) Dominguez’s right to the honest services of defendant OBAGI by means of bribery and kickbacks.

B. MEANS AND METHODS OF THE SCHEME TO DEFRAUD

12. The scheme to defraud operated, in substance, in the following manner and by the following means:
a. As part of their settlement of the attorney fee
dispute, defendant OBAGI would discount his attorney fees by $10,000 and Cullen would consent to release of the remainder of the retained attorney fees, approximately $118,675, to the Obagi Law Group.

Defendant OBAGI would route the entirety of the remaining settlement funds, approximately $957,048.49, directly to Cullen without transferring to Dominguez his share of the settlement.
b. Notwithstanding defendant OBAGI’s fiduciary duties to Dominguez, defendant OBAGI would fail to inform Dominguez or his attorneys that defendant OBAGI received the settlement funds from 22 1
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28 Equity Growth, and, upon inquiry, would fail to tell them how much was received.
c. Cullen would route the settlement funds into an escrow account for the purchase of real property to be held in the name of a straw purchaser.
d. In or around late April 2019, after a dispute arose
involving a straw purchaser, Cullen would cancel the escrow. On or about May 6, 2019, Cullen would transfer the settlement funds that remained in escrow, approximately $657,000, to defendant OBAGI’s CTA. e. Upon receipt of the settlement funds, defendant OBAGI would urge Cullen to remove the funds from his CTA and to find a person he could trust to conceal the money from Dominguez. f. In response, Cullen would enlist two associates,
Conduit 1 and Conduit 2, who would both agree to claim ownership to the $657,000 in settlement funds. Conduit 1 and Conduit 2 would also agree to receive the $657,000 from defendant OBAGI’s CTA and then surreptitiously transfer the money back to Cullen.
g. After Dominguez and his attorneys learned through a
third party that defendant OBAGI was again in possession of the remaining settlement funds, Cullen would prepare two notarized documents stating that Cullen was relinquishing all rights to the funds and instructing defendant OBAGI to distribute the funds to Conduit 1 and Conduit 2 in the amounts of $325,000 and $332,000, respectively. Defendant OBAGI would subsequently email these notarized documents to Dominguez’s attorneys.
h. After Dominguez’s attorneys filed a writ of levy and garnishment to claim the funds, defendant OBAGI would file an interpleader action with the LASC in which defendant OBAGI would 23 1
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28 falsely claim, despite his knowledge to the contrary, that the funds belonged to Conduit 1 and Conduit 2, who had secretly agreed at defendant OBAGI’s request, to funnel the funds back to Cullen.

USE OF WIRES

13. On or about May 6, 2019, within the Central District of California, and elsewhere, defendant OBAGI, for the purpose of executing the above-described scheme to defraud, transmitted and caused the transmission of a wire communication in interstate commerce, namely, an email sent from defendant OBAGI’s Gmail account to Cullen’s Gmail account routed through Google servers outside of California, which email acknowledged receipt of $657,000, expressed concern that money would be vulnerable to seizure, and recommended that Cullen send the money to someone he trusted.

JOSEPH T. MCNALLY
Acting United States Attorney

LINDSEY GREER DOTSON
Assistant United States Attorney
Chief, Criminal Division
CASSIE D. PALMER
Assistant United States Attorney
Chief, Public Corruption and Civil
Rights Section
THOMAS F. RYBARCZYK
Assistant United States Attorney
Deputy Chief, Public Corruption &
Civil Rights Section
DANIEL J. O’BRIEN
Assistant United States Attorney
Senior Litigation Counsel
Public Corruption and Civil Rights
Section
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28 EXHIBIT B
Background
Prior to his suspension effective May 3, 2024, defendant Zein E.

Obagi, Jr. (“defendant”) was an attorney licensed to practice in the State of California and the owner of the Obagi Law Group, P.C. (“Obagi Law Group”).

During the periods set forth below, Timothy Cullen (“Cullen”) and Eric Dominguez (“Dominguez”) were two California businessmen.

In 2014, Cullen and Dominguez entered into a partnership to construct a premises for the operation of a marijuana dispensary through an organization named Valley Herbal Healing Center, Inc. (“Valley Herbal”). On October 5, 2016, Dominguez and Cullen hired defendant to jointly represent them and their partnership in the sale of Valley Herbal’s assets to Equity Growth, LLC (“Equity Growth”).

The fee agreement with defendant and signed by Cullen stated that any monetary recovery from the sale would be deposited into defendant’s client trust account (“CTA”), that the client would be promptly notified of the receipt of such funds with a proposed distribution for their approval, and that contested funds would be held in trust until the dispute was resolved.

On May 24, 2017, Dominguez sent an email to defendant informing him that, due to a dispute with Cullen, Dominguez was recusing himself from negotiations regarding the potential sale of Valley Herbal to Equity Growth. On May 31, 2017, defendant replied that he was terminating his individual representation of Dominguez relative to the Valley Herbal negotiations and that, depending upon the severity of the conflict between Cullen and Dominguez, defendant might have to withdraw entirely from the representation of either Dominguez or Cullen.

On June 2 and 6, 2017, defendant sent cease and desist emails to Dominguez stating that he would continue to represent Cullen, but not Dominguez. Subsequently, the relationship between defendant and Dominguez became adversarial.

On July 7, 2017, defendant filed a complaint in the Los Angeles Superior Court (“LASC”) against Equity Growth on behalf of Cullen and Dominguez’s partnership titled Valley Herbal v. Eric Drew Shevin and Shevin Law Group, LASC Case No. BC667767 (“the Valley Herbal case”).

On August 18, 2017, an attorney filed, on behalf of Dominguez a separate complaint, Eric Dominguez v. Tim Cullen, et al., LASC Case No. BC673006 (“Dominguez v. Cullen”), seeking damages against Cullen for claims concerning the Valley Herbal sale. In response, defendant filed a cross-complaint in Dominguez v. Cullen against his former 25 1
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28 client, Dominguez. On August 23, 2017, defendant filed an amended complaint in the Valley Herbal case, adding Cullen as a plaintiff and naming Dominguez as a defendant. The amended complaint sought declaratory relief that Dominguez was not owed any money from the sale of Valley Herbal. The two lawsuits were related, or combined, on December 11, 2017.

On March 28, 2018, Dominguez’s attorney filed a complaint for malpractice against defendant, Dominguez v. Obagi, et al., LASC Case No. BC700046 (“Dominguez v. Obagi”), alleging that defendant abandoned representation and accepted employment adverse to Dominguez without Dominguez’s informed written consent.

On or about April 24, 2018, the parties to the various lawsuits reached a settlement by which (a) Equity Growth would pay $1.9 million less unpaid taxes to Cullen by September 25, 2018, and (b) Cullen would pay $515,000 to Dominguez, or 20.5% of any amount less than $1.9 million received by Cullen. Defendant required that the full amount of the settlement funds, including the portion of the settlement funds owed to Dominguez, be deposited into his CTA, pursuant to a stock purchase agreement executed by Equity Growth, Cullen, and a third party. Defendant and the parties understood that Dominguez would be paid his portion of the settlement from the funds received into defendant’s CTA. The parties agreed to this arrangement.

On September 26, 2018, Equity Growth wired to defendant’s CTA $1,828,391.02, which represented the $1.9 million settlement amount less amounts used to pay outstanding state taxes.

From September 25, 2018 through October 8, 2018, defendant and Cullen were engaged in a dispute with respect to the payment of defendant’s attorney’s fees. On September 27, 2018, defendant retained disputed attorney’s fees of $128,675.86 within his CTA account and transferred the remainder of the settlement funds, $1,699,715.16, to another attorney retained by Cullen per Cullen’s request. After the resolution of the attorney fee dispute, on October 9, 2018, Cullen’s new attorney wired the remainder of the settlement funds, $957,048.49, back to defendant’s CTA.

Misdirection of Settlement Funds
As part of defendant and Cullen’s settlement of the attorney fee dispute, defendant agreed to discount his attorney fees by $10,000 and Cullen agreed to release the remainder of the retained attorney fees, $118,675, to the Obagi Law Group. Defendant then routed the entirety of the remaining settlement funds, approximately $957,048.49, directly to Cullen without transferring to Dominguez his share of the settlement.
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28 Defendant did not inform Dominguez or his attorneys that he received the settlement funds from Equity Growth, and upon inquiry, did not tell them how much was received.

Cullen routed the settlement funds into an escrow account for the redevelopment of a parcel of real property that he had acquired in the name of a straw purchaser, concealing his ownership of the real property. Defendant was aware of Cullen’s general practice of concealing his ownership of real estate using straw purchasers.

In late April 2019, after a dispute arose involving the property to be redeveloped, Cullen canceled the escrow into which the settlement funds had been placed. On April 25, 2019, Cullen texted defendant, “[G]onna need to see you in person. Need to lock down my investment. . . . Let's just say your bad feeling looks to be correct. ... Need to find a way to secure all my assets.” On April 30, 2019, defendant responded by text, “Guess u gotta find somebody u trust. [Cullen’s Common Law Spouse]? And never marry her.” That same day, Cullen responded, “It is going to go in my best friend’s name.”
On May 2, 2019, defendant filed quiet title actions with respect to several properties Cullen had acquired in the name of straw purchasers. In the quiet title actions, defendant falsely alleged that Conduit 1 and Conduit 2 were the true owners of the properties in question.

On May 6, 2019, Cullen transferred the settlement funds that remained in escrow, $657,000, to defendant’s CTA. In a text message, Cullen explained the transfer to defendant as follows:
"Zein gonna have [Escrow Company] wire a $682 k into your client trust account asap. [Straw Purchaser] has lost
his shit. Is trying to have investigation on [Escrow
Company] opened which will freeze my funds. Its obvious [Dominguez] is behind him.”
On May 6, 2019, via email, after receipt of the funds, defendant acknowledged receipt but advised Cullen to remove the funds from defendant’s CTA and to find a person who Cullen could trust to transfer the funds to instead, saying:
“I need you to agree to defend, indemnify and hold Obagi Law harmless for any all costs associated with the
receipt of these funds. Please consult independent
counsel of your choice regarding what that means.

We’ve been sued by Dominguez. That falls into
malpractice insurance coverage. If either [Straw
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28 Purchaser] or Dominguez sues me trying to get access to these funds, because either [Escrow Company] says they
don’t have the funds or they simply deduce where it
likely went, either could sue us even though there may be no merit to their claim. They have no problem coming
after me.

Also I’m the obvious target. So my suggestion - besides asking you to agree to the above - is you get this
elsewhere, to Michael Cohen as a refundable retainer for services if you trust him or anybody else you trust.”
The email was sent from defendant’s Gmail account to Cullen’s Gmail account and was routed through Google servers outside of California.

That same day, Cullen responded to defendant saying that they could move the money to Cullen’s friends:
“I moved it from [Escrow Company] because [Straw
Purchaser] was threatening her to get her into some kind of audit which would lock my funds from me being able to move to pay [b]ills etc. ... We can move it to my best
friends when you get back and leave some for billing.”
On May 9, 2019, defendant received a letter from Dominguez’s counsel in the malpractice action, Dominguez v. Obagi, stating that Dominguez believed that defendant had concealed the settlement funds from Dominguez and demanding that defendant pay Dominguez’s share of the settlement.

On May 10, 2019, Cullen prepared two notarized letters to defendant stating that he was relinquishing all rights to the funds and instructing defendant to distribute the funds to Conduit 1 and Conduit 2 in the amounts of $325,000 and $332,000, respectively.

Defendant received the notarized letters shortly thereafter.

On May 13, 2019, Dominguez’s attorney served upon defendant a writ of levy and garnishment to seize the funds held within defendant’s CTA to which Dominguez was entitled by virtue of the settlement agreement.

During the evening of on or about May 13 and/or 14, 2019, defendant met with Cullen and Cullen’s two close friends, Conduit 1 and Conduit 2. Conduit 1 agreed to receive $125,000, which represented an amount in excess of Dominguez’s demand letter and the notice of levy and garnishment, and to route the funds back to Cullen. In the event the funds in dispute ultimately were awarded by a court to Conduit 1 and Conduit 2, both agreed to receive the remainder of the funds and route such funds back to Cullen. 28 1
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28 On May 14, 2019, defendant transferred $125,000 to Conduit 1 leaving $532,000 in defendant’s CTA account.

On May 30, 2019, upon the advice of retained ethics counsel, defendant filed an interpleader action requesting that the LASC determine the ownership of the funds (“the Interpleader”). The Interpleader asserted, “There remains $532,000 in trust which, on information and belief, belong to [Conduit 1] and [Conduit 2],” that “there exists a dispute between the defendants – Eric Dominguez, [Conduit 1], [Conduit 2] and Mr. Cullen relative to their respective rights [to] that money,” and that “[t]he dispute . . . as to the money in controversy has arisen without [defendant Obagi’s] collusion or partiality.” These assertions were not true and/or were misleading.

Defendant received $3,700 in attorney’s fees for services he personally performed in relation to Cullen’s attempts to transfer real estate and funds to Conduit 1 and Conduit 2. Defendant received $9,000 in compensation for services he rendered in connection with the Interpleader.

Subsequent Litigation
On March 12, 2020, in the consolidated litigation, the LASC entered judgment in favor of Dominguez and against defendant for $515,000, attorney fees of $180,000, and expert fees of $15,000, for a total of $710,000. On May 26, 2020, defendant satisfied the judgment.

On May 4, 2021, defendant filed a lawsuit, Zein E. Obagi, Jr., et al. v. Byron Spencer Hollins, et al. (“Obagi v. Hollins”) in which he alleged that his attorney in Dominguez v. Obagi had failed to competently represent him.

On July 28, 2021, the State Bar of California (“SBC”) filed a disciplinary case against defendant.

False and Inaccurate Statements in Subsequent Litigation On August 19, 2021, defendant’s counsel in the SBC action sent a letter to opposing counsel on behalf of defendant. The letter falsely asserted defendant neither received $957,048.49 in settlement funds nor transferred those funds to Cullen. On September 17, 2021, defendant’s counsel in the SBC action sent another letter to opposing counsel on behalf of defendant that acknowledged the $957,048.49 in transfers had occurred and that defendant “believed that Mr. Dominguez must have been paid.”
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28 On August 27, 2021, in Obagi v. Hollins, defendant alleged in a pleading that when he received the $957,048.49 transfer into his CTA, it was from “an unidentified source, with no representation as to what that amount entailed . . . ."
On August 9, 2023, defendant testified under oath in the SBC action that when he received the $957,048.49 transfer on October 9, 2018, he was “perplexed” and “confused,” he did not understand the reason for the transaction, and that no one made him aware that he needed to pay Dominguez.

On August 9, 2023, despite his prior interaction with and representation of Cullen, defendant testified in the SBC action that when he received the $657,000 from the escrow company on May 6, 2019, he “had not had any relations with Mr. Cullen for six months that I can recall, no work performed for him, and all of a sudden notice of levy arrives, and yeah, I don’t know which arrived first, but around the same time, money is transferred from the [Escrow Company] to my client trust account.” Defendant’s statement was not true.

On August 9, 2023, defendant testified under oath in the SBC action as follows:

Q: And either before or after [the Escrow Company] deposited those -- $657,000 into your trust account, did Mr. Cullen ever explain why that money was put into your trust account to you? A: Absolutely not.

Defendant’s testimony was not true.
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UNITED STATES DISTRICT COURT

FOR THE CENTRAL DISTRICT OF CALIFORNIA

UNITED STATES OF AMERICA,
Plaintiff,
v.

ZEIN E. OBAGI, JR.,
Defendant.

CR No.

I N F O R M A T I O N
[18 U.S.C. § 1343: Wire Fraud
18 U.S.C. §§ 1343, 1346: Honest
Services Wire Fraud]

INTRODUCTORY ALLEGATIONS
At times relevant to this Indictment:

1. Defendant ZEIN E. OBAGI, JR. was an attorney licensed to practice in the State of California and the owner of the Obagi Law Group, P.C. (“Obagi Law Group”).

2. Timothy Cullen (“Cullen”) and Eric Dominguez (“Dominguez”) were two California businessmen. In 2014, Cullen and Dominguez entered into a partnership to operate a mutual benefit non-profit marijuana dispensary named Valley Herbal Healing Center, Inc. (“Valley Herbal”). On or about October 5, 2016, Dominguez and Cullen hired defendant OBAGI to jointly represent them and their partnership in the sale of assets belonging to Valley Herbal to Equity Growth, 2:25-CR-00094-GW
2/11/2025
MMC
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28 LLC (“Equity Growth”). The fee agreement with defendant OBAGI and signed by Cullen, stated that any monetary recovery from the sale would be deposited into defendant OBAGI’s client trust account (“CTA”), that the client would be promptly notified of the receipt of such funds with a proposed distribution for approval, and that contested funds would be held in trust until the dispute was resolved.

Tim Cullen, et al., LASC Case No. BC673006 (“Dominguez v. Cullen”), seeking damages against Cullen for claims concerning the Valley Herbal sale. In response, defendant OBAGI filed a cross-complaint in Dominguez v. Cullen against his former client, Dominguez. On or 3 1
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28 about August 23, 2017, defendant OBAGI filed an amended complaint in the Valley Herbal case, adding Cullen as a plaintiff and naming Dominguez as a defendant. The amended complaint sought declaratory relief that Dominguez was not owed any money from the sale of Valley Herbal. The two lawsuits were related, or combined, on or about December 11, 2017.

5. On or about March 28, 2018, Dominguez’s attorney filed a complaint for malpractice against defendant OBAGI, Dominguez v.

7. Under California law, an attorney who assumes
responsibility to hold and disburse funds owes the same fiduciary obligations of loyalty, trust, and candor to a third party as he owes 4 1
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28 to his own client and must maintain records, render accounts, and promptly deliver such funds upon request.

8. On or about September 26, 2018, Equity Growth wired to defendant OBAGI’s CTA $1,828,391.02, which represented the $1.9 million settlement amount less amounts used to pay outstanding state taxes.

10. These Introductory Allegations are incorporated into the sole count of this Information.
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28 [18 U.S.C. §§ 1343, 1346]
A. THE SCHEME TO DEFRAUD

B. MEANS AND METHODS OF THE SCHEME TO DEFRAUD

Defendant OBAGI would route the entirety of the remaining settlement funds, approximately $957,048.49, directly to Cullen without transferring to Dominguez his share of the settlement.
b. Notwithstanding defendant OBAGI’s fiduciary duties to Dominguez, defendant OBAGI would fail to inform Dominguez or his attorneys that defendant OBAGI received the settlement funds from Equity Growth, and, upon inquiry, would fail to tell them how much was received.
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28 c. Cullen would route the settlement funds into an escrow account for the purchase of real property to be held in the name of a straw purchaser.
d. In or around late April 2019, after a dispute arose
involving a straw purchaser, Cullen would cancel the escrow. On or about May 6, 2019, Cullen would transfer the settlement funds that remained in escrow, approximately $657,000, to defendant OBAGI’s CTA. e. Upon receipt of the settlement funds, defendant OBAGI would urge Cullen to remove the funds from his CTA and to find a person he could trust to conceal the money from Dominguez. f. In response, Cullen would enlist two associates,
Conduit 1 and Conduit 2, who would both agree to claim ownership to the $657,000 in settlement funds. Conduit 1 and Conduit 2 would also agree to receive the $657,000 from defendant OBAGI’s CTA and then surreptitiously transfer the money back to Cullen.
g. After Dominguez and his attorneys learned through a
third party that defendant OBAGI was again in possession of the remaining settlement funds, Cullen would prepare two notarized documents stating that Cullen was relinquishing all rights to the funds and instructing defendant OBAGI to distribute the funds to Conduit 1 and Conduit 2 in the amounts of $325,000 and $332,000, respectively. Defendant OBAGI would subsequently email these notarized documents to Dominguez’s attorneys.
h. After Dominguez’s attorneys filed a writ of levy and garnishment to claim the funds, defendant OBAGI would file an interpleader action with the LASC in which defendant OBAGI would falsely claim, despite his knowledge to the contrary, that the funds 7 1
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28 belonged to Conduit 1 and Conduit 2, who had secretly agreed at defendant OBAGI’s request, to funnel the funds back to Cullen.

USE OF WIRES

JOSEPH T. MCNALLY
Acting United States Attorney

LINDSEY GREER DOTSON
Assistant United States Attorney
Chief, Criminal Division
CASSIE D. PALMER
Assistant United States Attorney
Chief, Public Corruption and Civil
Rights Section
THOMAS F. RYBARCZYK
Assistant United States Attorney
Deputy Chief, Public Corruption
and Civil Rights Section
DANIEL J. O’BRIEN
Assistant United States Attorney
Senior Litigation Counsel
Public Corruption and Civil Rights
Section

Redondo Beach City CouncilFebruary 11, 2025

Redondo Beach City Council
February 11, 2025