Posted on 08/18/2005 4:34:09 PM PDT by cgk
Claim filed on Cunningham house
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U.S. lawsuit seeks forfeiture of propertyBy Dani Dodge
August 18, 2005
The U.S. Attorney's Office has filed a secret lawsuit against Rep. Randy "Duke" Cunningham that contends he should forfeit his Rancho Santa Fe home to the government because it was purchased with illegally obtained money. Notice of the lawsuit and the government's interest in the property was filed with the San Diego County Recorder's Office. Cunningham's attorney, Lee Blalack, declined to comment yesterday on the lawsuit but said he had filed a motion challenging the U.S. government's legal claim on the house.
The home – a five-bedroom, eight-bath Spanish colonial estate on Via Del Charro – was listed for sale yesterday for $3.5 million. However, the U.S. attorney's declaration that it has a claim on the property makes a sale difficult if not impossible for the time being, local real estate agents said. The notice filed with the county is called a lis pendens, which is simply a legal notification that a suit has been filed that has an interest in the property in question. It lets prospective buyers know someone else has first claim. Although there is no public record of the lawsuit at the U.S. District Court in San Diego, the county's record shows that the U.S. Attorney's Office filed the notice July 21. That was less than a week after the Rancho Santa Fe Republican announced publicly he would not seek re-election and would sell the house, giving a portion of the profit to charity. "Please take notice," the document reads, "that a civil lawsuit is now pending in the United States District Court . . . which involves title to (Cunningham's house)."
The notice goes on to say: "The general object of the lawsuit is to forfeit to the United States the defendant property in that said property constitutes or is derived from proceeds traceable to a violation of Title 18 United States Code, Section 201. . . . " Title 18, Section 201 pertains to bribery, graft and conflicts of interest. Cunningham's troubles started with another home sale in 2003. He sold his Del Mar-area home to defense contractor Mitchell Wade for $1.675 million. Wade, who put it back on the market shortly after he bought it, sold it at a $700,000 loss. Cunningham also lived on Wade's yacht, the Duke-Stir, while in Washington, D.C. Wade's company, MZM Inc., a Washington, D.C.-based company that was sold yesterday for an undisclosed sum, has received $163 million in defense contracts since 2002. Cunningham used the money from the home sale to buy the Rancho Santa Fe home for $2.55 million in late 2003. He purchased it from Douglas Powanda, a former executive with Peregrine Systems awaiting trial on fraud charges for his alleged role in an accounting fraud conspiracy at the business software development company. The home had been on the market about seven months. A San Diego federal grand jury is now investigating the congressman's house deal with Wade. FBI agents with warrants broke into the Rancho Santa Fe house July 1 searching for documents. On the same day, they searched Wade's yacht and office in Washington.
On Tuesday, federal agents raided the Poway headquarters of another defense contractor with close ties to the congressman. Agents from the FBI, Internal Revenue Service and Defense Department were seeking records pertaining to government contracts secured by ADCS Inc., particularly deals related to the House Appropriations subcommittee on which Cunningham sits, according sources familiar with the investigation. Federal agents also raided the Poway home of the ADCS president, Brent Wilkes, who was vacationing in Hawaii. Wade and Wilkes contributed heavily to Cunningham, who backed their companies' efforts to gain government contracts. Cunningham, an eight-term congressman, represents the heavily Republican 50th District, including North County communities Carlsbad, Encinitas, San Marcos, Del Mar and Escondido, along with large portions of San Diego. In the papers that Blalack filed Aug. 12 contesting the U.S. Attorney's July 21 action, he asks for the notice to be expunged or the lawsuit to be unsealed. He notes that the U.S. Attorney's Office has sought to freeze Cunningham's principal asset without giving him a chance to argue his case. He adds that Cunningham's wife Nancy would also be deprived of selling the home even though there have been no allegations she participated in any illegal actions. The couple wants to sell their property and buy something less expensive in light of Cunningham's pending retirement, the papers said. The home is listed with Sterling Real Estate Co. agent Gerry Kirkeby. She did not return calls to comment yesterday. David Bright, an Escondido lawyer whose practice emphasizes real estate law and who teaches real estate principles to brokers, said it will be "extremely difficult" to sell the property with the pending civil litigation. "Any purchaser would be subject to the claim of the government," Bright said. "The purchaser's acquisition of the property could be potentially overridden by the government's claim." "Who is going to want to purchase under those conditions?"
Blalack said he hopes to get the notice lifted right away. Even without the pending litigation, specialists in North County high-end real estate estimated the house could be on the market for up to a year. Ken Crosby, a real estate agent who specializes in luxury estates, said buyers will be scared off after they learn of the pending forfeiture when they do a title search. But if Cunningham gets the notice cleared off, the property is reasonably priced and should attract buyers, he said. Kevin Burke, a real estate agent who teaches real estate at University of California San Diego, said that while high-end properties don't sell as quickly as lower-priced houses, they sell consistently. "The agents in The Ranch are used to getting a property and holding it onto it for a year," Burke said. "There are less people in that price range . . . and it will take someone coming in and saying, 'I really love that place.' " If the notice is removed, he said, the attention the house is getting will probably help make a sale. "Duke Cunningham has served our country for a long, long time and his notoriety will bring attention to the property," Burke said, "and that's every Realtor's dream."
 Dani Dodge: (760) 476-8242; |
Something sure is rotten in Denmark. Surprised and very disappointed in Cunningham.
Already posted here:
U.S. lawsuit seeks forfeiture of property
San Diego Union ^ | August 18, 2005 | Dani Dodge
Posted on 08/18/2005 9:07:24 AM CDT by radar101
http://www.freerepublic.com/focus/f-news/1465863/posts
Figures. I didn't change the article title either. :)
We conservatives need to run a clean operation. Rats can have crooks, rapists and tax cheats for elected officials, but we need to have good people.
Randy has made some serious errors and must go.
It's harder to keep it straight when the paper puts two different headlines on the same story.
He announced he wouldn't be running for re-election. His district seems to have mixed feelings about that based on the stories I read at the time. (I'm in his district, but new to it, therefore new to him.)
I guess the other title wasn't "sexy" enough. ;)
This is the last thing we need.
I liked the Duke, but if he's guilty, hangem high...
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