By Carol D. Leonnig and Dana Hedgpeth
Washington Post Staff Writers
Friday, October 27, 2006
Douglas Jemal, one of Washington's most prominent developers, was acquitted yesterday of charges that he bribed a city official to get sweetheart contracts and inflated profits at taxpayers' expense.
The jury in U.S. District Court convicted Jemal of one lesser count of wire fraud. But the panel resoundingly rejected the crux of the government's case, acquitting Jemal and two top lieutenants of his company, Douglas Development Corp., of the more serious charges of conspiracy and bribery.
"God bless you all," a tearful Jemal told jurors when he saw them leaving the courthouse. Giving them hugs, he declared: "Thank you, sweetheart. Thank you, dear."
From the start, Jemal, 63, denied wrongdoing in his dealings with the city. When he was indicted along with son Norman Jemal and leasing agent Blake Esherick in September 2005, Jemal said he was looking forward to the chance to clear his name and theirs after nearly two years of overlapping city and federal investigations.
Just before 3 p.m. yesterday, Jemal stood ramrod-straight in the courtroom as the jury foreman began to read the group's decision. When the foreman said, "Not guilty," on the chief counts, Jemal bent forward, his eyes beginning to water and rimmed with red. All told, he was acquitted of six of seven charges.
Prosecutors said Jemal could face up to 20 years in prison on the wire fraud charge. But under federal sentencing guidelines, his sentence could be much lighter, and he could wind up with just probation.
Known as a maverick developer who helped turn the city's East End near the Verizon Center from run-down storefronts into a vibrant area of housing, restaurants and shops, Jemal has an array of ambitious projects ahead, stretching from downtown to the banks of the Anacostia River in Southeast to Richmond. Now he will return to his daily routine -- and his trademark cowboy boots and jeans, which he had ditched for business attire for court.
He, his son and Esherick had recruited a veritable who's who of preeminent Washington defense lawyers to represent them in the trial that began Sept. 11. The jury acquitted Norman Jemal, the company's vice president, of all charges but found Esherick guilty on the wire fraud count as well as two counts of tax evasion relating to underreporting his income from Jemal. The bribery charges were always considered the most toxic in the case, but Esherick's conviction on the three felony counts is a serious blow, carrying the possibility of significant jail time.
Defense attorneys said they hoped to get the convictions overturned.
"We're relieved, of course," said Reid H. Weingarten, the lead defense attorney for Douglas Jemal. "He was charged with horrible crimes, of ripping off the District -- charges that never should have been brought."
U.S. Attorney Jeffrey A. Taylor said the guilty verdicts against Douglas Jemal and Esherick were a "vindication of a majority of our case." He defended the prosecution, saying, "This was a tough case, but given the serious allegations, we had to bring it."
The wire fraud charge stemmed from a document that Jemal and Esherick falsified and then used as a justification to get a mortgage company to release $430,000 in loan proceeds. The money went to a different business deal than the one specified in the mortgage. The defense contended that Jemal had a right to the money and that no one was hurt.
The prosecution's case focused most heavily on the angle of public corruption -- citing exorbitantly priced leases and invoices that a D.C. government property official arranged for the city to pay Douglas Development from 2001 to 2003. The government said Jemal and his team needed those deals to keep the company's overextended real estate empire alive in the years before the boom in District property prices and used phony documents and bribes to get them.
The government's star witness, former deputy director of property management Michael Lorusso, testified that he arranged overpriced deals, costing the city millions, for an impoundment lot in Prince George's County and office space at 77 P St. NE. Lorusso said he also authorized payments for nonexistent work.
Lorusso said that his goal was to enrich Jemal and that as payback Jemal's team gave him $10,000 cash in a humidor, a Rolex, trips to Las Vegas and other gifts. Lorusso pleaded guilty to taking bribes in 2004; he could get a lesser sentence in return for his cooperation.
Defense attorneys said Jemal was fiercely loyal to friends and generous with gifts. But prosecutors Mark H. Dubester and Tim Lynch argued that the gifts came with expectations and said that no reasonable person could believe Jemal would give another man a Rolex -- just to be friends -- a few months after meeting him.
Jurors said they saw no proof that Jemal meant to bribe anyone.
"We went strictly on the evidence, and there was none," said juror Stephanie Vasquez, 20.
Defense attorneys argued that Jemal profited on city deals because he was a good businessman.
In some of the trial's most dramatic moments, Weingarten tried to shred Lorusso's credibility. In one withering exchange, Weingarten got Lorusso to admit that nearly every line of the résumé he wrote to get his city job was falsified.
Some jurors said they considered Lorusso a "colossal liar."
"Oh, God -- Lorusso, " said juror Rosanne Goodie, 43. "What could you believe with him?"
A female juror who spoke on condition of anonymity said Jemal seemed to be the victim. "A man in high places will probably have people tend to gravitate toward him who want to use him," she said.
Friends and competitors in the close-knit circles of D.C. real estate welcomed the news that Jemal was cleared of the bribery charges.
"I'm happy for him," said Jim Abdo, a major housing developer. "I think what was driving him crazy was that anybody in the development business doesn't like uncertainty. He had this cloud of uncertainty over him. To have that removed is going to give him a significant peace of mind."
Ernie Jarvis, a managing director in the D.C. office of CB Richard Ellis, said: "I am relieved that Douglas was cleared, and I'm hopeful that he will continue to be a presence in our city as well as the local real estate market."
Jemal will be sentenced April 16 and Esherick on March 15.
During his trial, Jemal went into his office on H Street NW at 8 a.m. and worked for two hours before court. He returned to the office in the evenings, returning phone calls and e-mails to brokers, partners and potential buyers and sellers. A longtime supporter of Mayor Anthony A. Williams (D), Jemal is a builder and a manager of 10 million square feet of office, retail, commercial and residential properties in 185 buildings in the region.
"I'm very ecstatic to be judged by a jury of my peers, and I'm happy with the outcome. . . . In the end, I don't even know what it was about," Jemal said.
Before leaving the courthouse grounds, Jemal told jurors that he was glad they got his case, then got big laughs and slaps on the back with his parting joke:
"Let's get together every year around this time."