A federal judge has sided with prosecutors in refusing to return $2 million the government seized in a theft investigation targeting the founder of a private school in the District of Columbia.
Lawyers for Charles Emor, founder of Sunrise Academy, contend the government is impeding the ability of Sunrise to pay Emor’s legal bills. Senior Judge Paul Friedman of Washington federal district court rejected the argument in a ruling published July 1.
Defense attorneys for Emor, Duane Morris partners Joseph Aronica and Robert Dietrick, argued recently in U.S. District Court for the District of Columbia that Emor is unable to pay his legal bills. The government seized $2 million from a company called Core Ventures, which Emor formed in 2008.
Prosecutors allege Emor diverted hundreds of thousands of dollars in local or federal funds to pay for personal expenses that include rent, child support payments, jewelry and vehicles. Emor is also accused of transferring $2 million from Sunrise into Core.
Lawyers for Sunrise, Core and Emor have tried to convince prosecutors to return the money seized from Core's accounts. DLA Piper’s Peter Zeidenberg in August said the money in Core’s bank accounts belonged to Sunrise and that the school needed the cash to pay bills and to pay severance to nearly 50 teachers and aides.
Zeidenberg said in a follow-up letter, according to court records, that prosecutors were blocking the ability of Sunrise to pay Emor’s legal bills. Emor was indicted in November on fraud and theft counts. Friedman recently dismissed 15 mail and wire fraud counts with prejudice.
“Tax dollars earmarked for schools are intended to buy textbooks, not luxury vehicles and diamond jewelry,” U.S. Attorney Ronald Machen Jr. said in a prepared statement announcing the charges. “This indictment charges Charles Emor with stealing funds intended to benefit our children’s education.”
Friedman in his ruling this month rejected motions from Sunrise for the return of the money seized from Core, saying that the school was a third-party barred from challenging forfeiture in the middle of a pending criminal proceeding.
The judge said there’s no evidence of prosecutorial misconduct in Emor’s case.
“Mr. Emor’s unconvincing attempts to attribute bad motives to the prosecutors in his case do nothing to undermine the conclusion that those prosecutors had reasonable and legitimate grounds for arranging for the pretrial seizure of the assets in question,” Friedman said.
Friedman rejected Emor’s demand for a hearing in which the government would be forced to show how the money can be forfeited. A defendant in Washington federal district court, the judge said, is entitled to such a hearing only when the assets are necessary to retain counsel of a person’s choosing.
The U.S. Court of Appeals for the D.C. Circuit, Friedman said, has not “held that a defendant must receive such a hearing simply because he claims that he needs the assets for legal fees.”
Friedman said Emor has failed to show that he lacks money to pay for an attorney and he hasn’t demonstrated that the seized assets would be used to pay legal fees if the money were released from custody.
“Mr. Emor has provided the Court with absolutely no reason to believe that his current counsel—privately retained attorneys from Duane Morris, LLP—are not his counsel of choice, that he is in danger of losing the services of those counsel, or that those counsel have restricted or will restrict their defense of him because of a lack of funds,” Friedman said.
Aronica said this afternoon he was disappointed with Friedman's ruling but said the return of the money will be litigated at trial.
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