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DOJ Loses Fight Over Foreign Official's $38.5 Million Jet
The National Law Journal
In late 2011, top U.S. Department of Justice officials trumpeted the government's effort to seize millions of dollars in assets belonging to a top public official in Equatorial Guinea. Now a federal trial judge in Washington has dealt prosecutors a setback.
U.S. District Judge Rudolph Contreras in Washington ruled against the government in a fight over a $38.5 million Gulfstream jet that prosecutors contend the official, Teodoro Nguema Obiang Mangue, obtained through corruption.
"Although the government describes a disconcerting pattern of corruption in Equatorial Guinea, the complaint does not link the jet to any specific illicit acts," Contreras wrote in Friday's 23-page ruling. "Although the government alleges that Nguema lives far beyond his means, the court cannot leap to the conclusion that his largesse is evidence of criminal activity."
Juan Morillo, a Cleary Gottlieb Steen & Hamilton litigation partner in Washington who represents Nguema, was not immediately available for comment. Nguema is a vice president in Equatorial Guinea who oversees national defense and state security, according to published reports. His father is the president of the country.
Federal prosecutors in late 2011 filed civil forfeiture actions in Washington and California targeting tens of millions of dollars in property that belong to Nguema. They alleged Nguema corruptly used his official position to enrich himself.
"While his people struggled, he lived the high life -- purchasing a Gulfstream jet, a Malibu mansion and nearly $2 million in Michael Jackson memorabilia," then-Assistant Attorney General Lanny Breuer of the Criminal Division said in a written statement. The government targeted Nguema's assets amid a broader anti-kleptocracy initiative.
Contreras said that prosecutors had failed to show that Nguema's jet was "derived from or trace able to illicit activity." Prosecutors, he continued, did not allege, for instance, which members of a so-called "inner circle" of elites in Equatorial Guinea participated in alleged criminal activity.
The government, Contreras said, "does not provide enough detail for the court to infer the contours of the illicit scheme." Nguema isn't even mentioned in some of the allegations, including one alleged extortion scheme prosecutors highlighted in their court papers, he noted.
"The government itself has alleged that Nguema owns or controls a number of companies," Contreras said. "Yet nothing is known about what income Nguema derives from them. Thus, without knowing what Nguema's means are, the court is hard-pressed to infer that he lives beyond them."
Contreras didn't block the Justice Department from bringing a new complaint against Nguema, dismissing the pending forfeiture case without prejudice. Woo Lee, a U.S. Justice Department lawyer in Washington who is assigned to the forfeiture case, was not immediately available for comment.
Duane Lyons of Quinn Emanuel Urquhart & Sullivan, representing Nguema in the California forfeiture case, said in court papers that the government's legal effort there was "ill-conceived" and "haphazard."
U.S. District Judge George Wu of Los Angeles is scheduled to hear arguments in June over whether the government had probable cause at the time the forfeiture action was filed.