- The Washington Times - Wednesday, September 28, 2005

Douglas Jemal, one of the District’s most prominent real estate developers, and two of his company executives have been indicted on charges of bribing a city official to get lease deals that cost city taxpayers millions, federal prosecutors said yesterday.

The three men, including Mr. Jemal’s son Norman Jemal, gave Michael A. Lorusso, a former deputy for the D.C. Office of Property Management, $25,000 in cash and gifts “that directed millions of dollars into the defendants’ pockets,” said Kenneth L. Wainstein, U.S. Attorney for the District.

“They lavished [Lorusso] with presents,” Mr. Wainstein said.

Douglas Jemal, 62, his 36-year-old son who is an executive at his father’s company, and Blake C. Esherick, 42, the company’s leasing director, have been indicted on charges that include bribery, wire fraud and tax evasion.

Douglas Jemal disputed the charges yesterday and said all three men look forward to going to trial.

“This has been going on for quite a while,” he said of the federal investigation. “I look forward to trial and going before a jury of my peers.”

Mr. Jemal said he was “absolutely” speaking on behalf of his son and Mr. Esherick in disputing the charges. “We pray together … and we stay together,” he said.

If convicted, Douglas and Norman Jemal each face up to 40 years in prison and Mr. Esherick faces up to 45 years, officials said.

The indictment comes several months after federal agents conducted raids of the D.C. headquarters of Douglas Jemal’s company, Douglas Development Corp.

Prosecutors said the bribes included $1,000 for two pairs of cowboy boots, hotel stays in Las Vegas and private box tickets to Washington Wizards and Washington Capitals games.

In exchange, Mr. Lorusso helped arrange for the District to lease properties from Douglas Development, officials said. Last year, Lorusso pleaded guilty in the case and has been cooperating with prosecutors in the investigation.

Mr. Wainstein declined to say how much money may have been lost in the deals.

Among other leases, prosecutors cited more than $100 million in commitments by the District to rent office space at 77 P St. NE for 10 years. Mr. Wainstein said that deal and others involved “significant loss” to the D.C. government and taxpayers.

Prosecutors said Lorusso also arranged payments to Douglas Development for “fraudulent, excessive, duplicative, irregular and otherwise unsupported” invoices.

Attorneys for Douglas Development, Douglas Jemal and Mr. Esherick previously defended the company’s actions in leasing arrangements with the District, court records show.

The company attorneys have stated that city attorneys approved leasing documents as “legally sufficient,” and that the District owed millions of dollars in late fees and rent charges to the company, court records show.

In addition to the bribery scheme, prosecutors also claimed conspiracies of wire fraud and tax evasion.

Prosecutors said Douglas Jemal paid Mr. Esherick in ways that made it difficult for the Internal Revenue Service to monitor, including making payments directly to Mr. Esherick’s ex-wife and providing rent-free housing in the District.

Officials said the payments allowed Mr. Esherick to evade about $100,000 in taxes.

Prosecutors also said Douglas Jemal, his son and Mr. Esherick submitted false documentation to a lending company to draw down about $400,000 from a construction loan, later using the money for “personal use and benefit.”

Mr. Wainstein said none of the defendants have been arrested and that a court hearing has not been scheduled in the case.

He singled out D.C. Council member Jim Graham, Ward 1 Democrat, for holding hearings in 2003 that brought to light corrupt leasing practices.

“We knew there was serious wrongdoing and we revealed it,” Mr. Graham said yesterday. “I think we did our duty, and we got to the bottom of this.”

D.C. Mayor Anthony A. Williams yesterday said the District will continue to “cooperate fully” in the investigation. “I encourage Mr. Wainstein to aggressively root out corruption anywhere he finds it, whether it is in the government or in the private sector,” he said.

Lorusso, who is awaiting sentencing, faces up to six years in prison.

Fernando J. Villegas, a contractor who also has pleaded guilty in the case, is also cooperating with prosecutors. Villegas is awaiting sentencing and faces up to five years in prison.

Mr. Wainstein said the probe is “ongoing,” but declined to say whether more indictments are expected.

• Robert Redding Jr. contributed to this report.

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