The Latest Legal News & Industry Information

D.C., Maryland Attorneys General Serve
Subpoenas on Trump Organization

     Subpoenas the attorneys general of the District of Columbia and Maryland served on the Trump Organization this week demand tax documents and related financial information from the president’s corporate interests.
     If the subpoenas survive Donald Trump’s opposition, they could reveal some of the tax information the president has steadfastly refuse to release publicly.
     The D.C. and Maryland attorneys general allege in a lawsuit in U.S. District Court in Maryland that Trump violated the emoluments clause of the Constitution with his local business interests, particularly Trump International Hotel in downtown Washington.
     The lawsuit says Trump is using his influence as president to drive business to the hotel, thereby depriving other nearby hotels and entertainment venues from their normal income.
     If true, the allegations appear to violate Article 1, Section 9 of the Constitution that restricts members of the government from receiving “gifts, emoluments, offices or titles from foreign states and monarchies” without the consent of Congress. Emoluments generally refer to compensation for services arising from public office.
     The subpoenas do not request the president’s individual tax returns but they seek enough information about his corporate interests that Trump’s personal earnings could be deduced. Trump is the only president in recent history who has declined to release his tax returns.
District of Columbia Attorney General Karl Racine said in a statement that he "can confirm that all of the Trump Organization entities have been served."
     The subpoenas seek information about any money domestic and foreign governments have paid to Trump International Hotel and its restaurant BLT Prime, where the president sometimes dines.
     They also ask for "all documents concerning marketing or promotion of or by the Trump International Hotel ... to any Foreign or Domestic Government."
     The Washington Post reported this week that lobbyists for the Saudi government paid for at least 500 stays at the Trump International Hotel in three months, beginning shortly after Trump was elected.
     The case is District of Columbia et al. v. Trump, case number 8:17-cv-01596, in U.S. District Court for the District of Maryland.
For more information, contact The Legal Forum (www.legal-forum.net) at email: tramstack@gmail.com or phone: 202-479-7240.

Former Justice Dept. Employee in D.C.
Prosecuted in Huge Foreign Fraud Scam

     The Justice Department is seeking more than $73 million from one of its former employees and a rap artist accused of helping a Malaysian fugitive in a fraud scheme.
Court documents filed late last week say rap artist Pras Michel and former Justice Department specialist George Higginbotham tried to funnel money and other assets through U.S. financial institutions to influence investigations of Malaysian financier Jho Low, who is sought by authorities.
     Higginbotham has pleaded guilty to one felony count of conspiracy to make false statements to a bank. He worked as a senior congressional affairs specialist at the Justice Department until August.
     Michel, 46, still is being investigated. He is the founder of the Fugees hip-hop group and is known for his 1996 remake of the song “Killing Me Softly.”
     The alleged financial scheme is centered on an investment company called 1Malaysia Development Berhad. The Malaysian government organized it as part of an economic development program.
     Justice Department officials say corrupt Malaysian government agents and businessmen misappropriated more than $4.5 billion from the company and laundered it through shell companies. Low is accused of being a kingpin in the scheme and of trying to bribe Malaysian and Abu Dhabi officials.
     “With the assistance of George Higginbotham, Michel opened multiple accounts at financial institutions in the United States to maintain money funneled into the United States at Jho Low's direction,” the Justice Department filings say. “However, the true source and purpose of the funds were not disclosed to the banks and were actively concealed from them."
     The Justice Department also filed a forfeiture action in U.S. District Court for the District of Columbia to seize the alleged misappropriated assets, which included luxury real estate, a jet aircraft and rights to a Hollywood movie.
     Higginbotham admitted in court last week that he helped in the money laundering to finance a "lobbying campaign" to address the Justice Department’s allegations. The campaign was intended to end the investigations into the 1Malaysia Development Berhad investment fund.
     Higginbotham also admitted to lying to U.S. financial institutions about the source and purpose of the funds. Part of the falsehoods included using a cover story to say the laundered money was being used for “entertainment” purposes that Michel was allegedly helping to facilitate.
     The cases are U.S. v. Higginbotham, case number 1:18-cr-00343, and U.S. v. $37,564,565.25 in Account Number XXXXXXXX9515 at Morgan Stanley in the name of Anicorn LLC et al., case number 1:18-cv-02795, filed in U.S. District Court for the District of Columbia.
    For more information, contact The Legal Forum (www.legal-forum.net) at email: tramstack@gmail.com or phone: 202-479-7240.

Virginia Defense Contractors Charged
With Fraud in Afghanistan Supply Contract

     Three Virginia-based defense contractors are facing charges of defrauding the government after allegedly embezzling money intended for a warehouse to supply food to U.S. troops in Afghanistan.
     Instead of building the warehouse, they lied about construction on the project, according to Justice Department documents filed last week in U.S. District Court for the District of Columbia.
     The contractor executives, Abul Huda Farouki, Mazen Farouki and Salah Maarouf, received an $8 billion contract from the Defense Logistics Agency. Part of the contract required building a new warehouse for supplies destined to the U.S. military in Afghanistan.
     Instead, the Justice Department accuses the executives of lying about when the warehouse would be completed.
     They also are accused of taking photos of construction materials they pulled together to show the Defense Department. The photos were intended to create a false impression the warehouse was being built, according to the indictment.
     The contractors operated a company called Anham FZCO, which is based in the United Arab Emirates.
     Falsified photos and documents helped Anham win the $8 billion contract in June 2012, according to the Justice Department.
     The executives tried to increase their profits by shipping materials illegally through Iran instead of through more expensive legal routes, the Justice Department alleges.
     "The purpose of the conspiracy was for Anham to promote the illegal transshipment of goods, equipment and other materials intended for the SPV-A and NAT contracts through Iran by causing funds from bank accounts held in the United States to be transmitted to entities outside of the United States and from bank accounts outside the United States to bank accounts in the United States,” the indictment says.
     If they are found guilty, the executives would be required to forfeit all assets they gained through the contract.
     The case is U.S. v. Abul Huda Farouki et al., case number 1:18-cr-00346, filed in U.S. District Court for the District of Columbia.
     For more information, contact The Legal Forum (www.legal-forum.net) at email: tramstack@gmail.com or phone: 202-479-7240.

Arguments Start Next Week
On Military Transgender Ban

     Oral arguments are scheduled for next week in the U.S. Court of Appeals in Washington on the Trump administration’s ban against transgender people serving in the military.
     A federal judge issued an injunction against the ban shortly after President Donald Trump announced it earlier this year.
     Last week, the judge said the injunction should stay in place at least temporarily, despite a government request to lift it.
Justice Department attorneys argued the government would suffer irreparable harm if transgender persons are allowed to be soldiers.
     They want the U.S. Supreme Court to bypass any additional appeals to take the case immediately.
     The ruling against the Justice Department last week by U.S. District Court Judge Colleen Kollar-Kotelly says, “Without supporting evidence, defendants’ bare assertion that the Court’s injunction poses a threat to military readiness is insufficient to overcome the public interest in ensuring that the government does not engage in unconstitutional and discriminatory conduct.’
     “After all, it must be remembered that all plaintiffs seek during this litigation is to serve their nation with honor and dignity, volunteering to face extreme hardships, to endure lengthy deployments and separation from family and friends, and to willingly make the ultimate sacrifice of their lives if necessary to protect the nation, the people of the United States and the Constitution against all who would attack them.”

Bartender’s Lawsuit Tries to Block
D.C. Restaurant Server Wage Law

     A new lawsuit pending in D.C. Superior Court is running up against the D.C. Council’s effort to protect the wages of restaurant servers.
D.C. voters approved Initiative 77 in June that would require servers to be paid at least a minimum wage salary.
     The Initiative was supposed replace the tipped-service wage, which allowed restaurants to pay less than minimum wage if servers were allowed to keep all the tips they received.
     However, the D.C. Council repealed the Initiative despite a 56 percent approval margin by voters.
Council members said servers usually receive more money under tipped-service wages. Initiative 77 would cut their pay, the Council members said.
     The Council’s repeal now is running up against a court battle. Last week, a D.C. bartender filed a lawsuit in D.C. Superior Court that argues the D.C. Council failed to follow appropriate procedures in repealing Initiative 77.
     Congress was expected to give final approval to the repeal by next week. The lawsuit could delay the final approval.
     The bartender, Valerie Graham, is represented by Veritas, the law firm that advocates for the Restaurant Association of Metropolitan Washington, the city’s restaurant lobby.