Justice Department Seeks to Forfeit Beverly Hills Mansion Purchased with Proceeds of Scheme to Defraud U.S. Military and Bribe an Iraqi Official

The Justice Department filed a civil forfeiture complaint today in the U.S. District Court for the Central District of California seeking the forfeiture of a mansion located in Beverly Hills, California, alleged to have been purchased and renovated with approximately $30 million in proceeds of a scheme to defraud the U.S. Department of Defense’s Defense Logistics Agency (DLA), pay bribes to an official of the Kurdistan Region of Iraq, and violate U.S. money laundering laws. As alleged in the complaint, from 2016 through 2020, a Virginia-based defense contractor and others engaged in a corrupt scheme to obtain more than $700 million from DLA for fuel deliveries to the U.S. military during Operation Inherent Resolve, the U.S. campaign against the Islamic State of Iraq and Syria. The Erbil International Airport (EIA) located in Kurdistan, where Kurdish Peshmerga forces provided internal security and controlled entry to the facility, served as a critical delivery point for fuel used by the U.S. military in Iraq and Syria during the campaign. The complaint alleges that officers of the contractor agreed to pay General Mansour Barzani, a senior Peshmerga official, a bribe of $0.25 per liter for exclusive access to deliver jet fuel in Kurdistan for the U.S. military and coalition forces and received hundreds of millions of dollars under DLA contracts. During the same period, the contractor’s competitors were blocked from accessing EIA for jet fuel deliveries on behalf of DLA, and DLA issued one-time-buy contracts to the contractor often at noncompetitive and greatly inflated prices. According to the civil forfeiture complaint, funds that the contractor received from DLA as a result of the scheme were transferred to NYJD Trust No.1, a trust established in Virginia for the private benefit of Barzani. In 2018, approximately $30 million of those funds were transferred from Barzani’s trust to purchase the Beverly Hills mansion as well as the renovation and improvement of the property from 2019 to 2022.