The U.S. attorney for the District halted efforts to seize money and land owned by former Riggs Bank vice president Simon P. Kareri, an indication the government is preparing criminal charges against him.
The U.S. attorney has been trying to seize a Maryland property owned by Kareri and his wife as well as nearly $1 million in bank accounts, arguing in a civil suit that the assets were connected to money laundering. Kareri ran the African and Caribbean embassy business for Riggs, including the accounts of Equatorial Guinea and Benin, until he was terminated early last year after the bank's internal investigators uncovered evidence of fraud.
In a filing yesterday, the U.S. attorney and Kareri's lawyer agreed to stay the civil proceeding because further discovery in the case could reveal elements of each party's legal strategy in a criminal proceeding. Judge Ricardo M. Urbina agreed to stay the civil case "pending the outcome of the current criminal investigation and possible filing of formal charges against Simon Kareri," according to an order signed by the judge.
U.S. attorney's office spokesman Channing Phillips declined to comment on whether criminal action against Kareri is imminent. A source close to the case said yesterday's filing is a signal the government will file charges against Kareri soon unless Kareri enters into negotiations for a plea agreement.
Kareri could be the first individual charged in an ongoing investigation of money laundering allegations at Riggs's defunct embassy banking operation. Riggs and its holding company are negotiating with the Department of Justice for a settlement of all criminal charges against them, according to sources close to the talks who spoke only on the condition that they not be identified because of the sensitive nature of the negotiations. The settlement would not prohibit charges against individuals.
Kareri's lawyer Jonathan Shapiro did not return phone calls.
In a September court filing, the government alleged that Kareri developed a relationship with Hardutt Singh, owner of Potomac Construction Co. of Hyattsville. The filing alleged that Kareri arranged for Singh to perform a renovation project at Benin's embassy in the District in the spring of 2000. According to the filing, Singh prepared a written estimate of $186,000 for the work. Kareri then told Singh to submit an estimate for $410,000 to the embassy and to pay Kareri the $224,000 difference. Singh was paid the $410,000 in a check drawn on Benin's Riggs Bank account overseen by Kareri, the filing alleges. Singh then issued several checks directly to Kareri, according to the filings.
Sources close to the case said the Singh relationship began as a referral from Riggs employee Michael Parris, who worked for Kareri. Parris's wife is the sister of Singh's wife, said sources familiar with the case, who spoke only on the condition they not be named because of the continuing investigation. Parris, who is not alleged to have engaged in any wrongdoing, left Riggs last summer.
Singh, who is not named as a defendant in the civil action, did not return repeated phone calls. His lawyer, Martha Rogers, declined to comment. Parris referred questions to his attorney, Thomas Connolly, who declined to comment yesterday.
The government claims Kareri used some of the funds generated by the scheme to buy a property near Potomac, which the government was attempting to seize.
The Singh family relationship to Parris was not the only tie to a Riggs executive. Riggs National Corp. chief executive Robert L. Allbritton's wife, Elena, a dermatologist, is a cousin of the wives of both Singh and Parris. Sources with knowledge of the matter said Allbritton met his wife after the events in question. Paul Clark, a spokesman for Robert Allbritton, said, "Dr. Allbritton's family ties are totally coincidental, and she has never had any communication with Mr. Kareri, either directly or through her family."