DOJ Moves to Seize $30M Beverly Hills Mansion Tied to $700M U.S. Military Fuel Scheme and Iraqi Bribery
The Justice Department on Wednesday filed a civil forfeiture complaint against a Beverly Hills mansion it says was bought and renovated with $30 million siphoned from a $700 million scheme to defraud the Defense Logistics Agency on jet-fuel deliveries to U.S. troops fighting ISIS — paid for in part by a $0.25-per-liter bribe to a senior Kurdish Peshmerga general.
The Justice Department filed a civil forfeiture complaint Wednesday in the U.S. District Court for the Central District of California seeking to seize a Beverly Hills mansion that prosecutors say was purchased and renovated with roughly $30 million in proceeds from a four-year scheme to defraud the Pentagon's Defense Logistics Agency, bribe a senior Iraqi Kurdish official, and launder the proceeds through a Virginia trust.
The case centers on jet-fuel deliveries to U.S. and coalition forces during Operation Inherent Resolve, the campaign against the Islamic State of Iraq and Syria. From 2016 through 2020, according to the complaint, a Virginia-based defense contractor and others obtained more than $700 million in DLA contracts to deliver fuel through Erbil International Airport in Iraqi Kurdistan — a critical staging point for the U.S. military.
The bribe
Access to Erbil's airfield was controlled by Kurdish Peshmerga forces. The complaint alleges that officers of the contractor agreed to pay General Mansour Barzani, a senior Peshmerga official, $0.25 per liter of jet fuel in exchange for exclusive access to deliver to the U.S. military at Erbil. Competitors were blocked. With the field cleared, the contractor secured "one-time-buy" contracts from DLA at "noncompetitive and greatly inflated prices," the complaint says.
The trust and the mansion
Funds the contractor received from the Defense Logistics Agency were transferred to NYJD Trust No.1, a trust established in Virginia for Barzani's private benefit, according to the complaint. In 2018, approximately $30 million from that trust was used to purchase the Beverly Hills mansion. Renovations and improvements ran from 2019 through 2022.
The Justice Department is seeking civil forfeiture of the property as proceeds of fraud and money laundering. As the press release notes, "a civil complaint is merely an allegation" and the government bears the burden of proof by a preponderance of the evidence.
Investigators and prosecutors
The case was investigated by the FBI Washington Field Office, the Defense Criminal Investigative Service, and IRS Criminal Investigation. Deputy Chief Michael B. Redmann and Senior Trial Attorney Steven Parker of the Criminal Division's Money Laundering, Narcotics and Forfeiture Section are handling the case, with support from the U.S. Attorney's Office for the Central District of California and the Justice Department's Office of International Affairs.
The announcement carries press release number 26-390.