- The Washington Times - Thursday, October 26, 2006

A U.S. District Court jury yesterday found D.C. developer Douglas Jemal guilty of one count of wire fraud but acquitted him on all counts connected with charges that he bribed a city official.

The jury also acquitted Mr. Jemal’s son, Norman, on all charges and found Douglas Development Corp. leasing official Blake Esherick guilty of wire fraud and two counts of tax evasion.

The wire fraud charge carries a maximum penalty of 20 years in prison. Each tax evasion charge carries a maximum penalty of five years in prison.

Douglas Jemal said he could not comment on the outcome of the case. But his attorney, Reid Weingarten, said the prominent developer had a “sense of relief that we were vindicated on all the important counts.”

Jeffrey A. Taylor, U.S. attorney for the District, said he was “very pleased” with the verdict. He said that the prosecution’s case was founded on three theories — bribery, fraud and tax evasion — and that his team got convictions on two of them.

“We consider it a significant victory in a hard-fought case,” Mr. Taylor said.

Judge Ricardo M. Urbina announced the jury had reached its verdict at about 2:15 p.m., after deliberations that began Tuesday morning.

After the verdict was read, the three defendants huddled together, their arms around one another, before departing the courtroom with the large entourage of family and friends that was present for most of the 33-day trial.

The guilty verdict for Douglas Jemal seemed to take many in the courtroom by surprise, read after not-guilty verdicts on the bribery, mail fraud and conspiracy to bribe charges.

Those counts related to charges that the defendants gave $25,000 and gifts, including sports tickets, trips and cowboy boots, to a D.C. official in exchange for favorable leasing deals with the District.

Michael A. Lorusso, a former deputy in the D.C. Office of Property Management, pleaded guilty last year to taking bribes.

The jury found that Douglas Jemal set up a fraudulent corporation and claimed the corporation was billing him for work done at the People’s Building on New York Avenue in Northeast. He and another man, New York businessman Joseph Cayre, were partners in a company called Cayre Jemal’s Gateway LLC, which owned the building.

The count charged that Douglas Jemal and Esherick submitted an invoice worth more than $430,000 from the fraudulent corporation to money lender Morgan Stanley, which had granted Cayre Jemal’s Gateway a $67 million loan to cover building-renovation expenses.

Prosecutors said Douglas Jemal and Esherick submitted the invoice to fool Morgan Stanley and Mr. Cayre so that they could improperly draw down cash being held in reserve from the bulk of the loan in a multimillion-dollar tenant-improvement fund.

They said the defendants needed the money to complete the purchase of a building at 111 Massachusetts Ave. Northwest, nicknamed the Darth Vader building because of its sleek, black glass exterior.

However, Mr. Cayre and a representative from Morgan Stanley undercut the prosecution’s case, testifying that they made money from the deal and would do business again with Douglas Jemal.

Mr. Weingarten repeatedly told jurors that there was no victim because no loss had been established. He said he plans to ask the judge to review the count and was confident the judge would dismiss it.

“The count is riddled with legal issues,” Mr. Weingarten said, adding that he had “a sense of complete confidence that nothing is going to happen to Douglas Jemal as a result of this no-loss fraud count.”

Judge Urbina asked that the defense submit its brief requesting a verdict review by Nov. 29. The prosecution will have until Dec. 6 to respond. Sentencing for Esherick was set for March 15. Douglas Jemal’s sentencing was set for April 16.

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