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United States of America v. Imaad Shah Zuberi
Case Number: 2:19-cr-00642-VAP
Judge: Virginia A. Phillips
Court: United States District Court for the Central District of California (Los Angeles County)
Plaintiff's Attorney: Daniel J. O’Brien and Elisa Fernandez
Call 918-582-6422 if you need help finding a violation of foreign agents registration act criminal defense lawyer in Los Angles, California
Los Angeles, CA - Campaign Fundraiser Agrees to Plead Guilty to Falsifying Records to Conceal Work as Foreign Agent, Evading Taxes on Income Obtained by Lobbying on Behalf of Foreign Entities, and Illegal Campaign Contributions
Federal prosecutors today filed a criminal case charging Imaad Shah Zuberi, a Southern California campaign fundraiser, with falsifying records to conceal his work as a foreign agent while lobbying high-level U.S. government officials. The criminal charges allege that Zuberi engaged in lobbying efforts that earned him millions of dollars, much of which was pilfered from his clients.
In addition to violating the Foreign Agents Registration Act (FARA), Zuberi is charged in a criminal information with tax evasion and making almost $1 million in illegal campaign contributions that included funneling money from foreign entities and individuals to influence U.S. elections.
Zuberi, a 49-year-old resident of Arcadia, California, has agreed to plead guilty to the three counts in the information. A plea agreement also filed today in United States District Court notes that Zuberi faces a statutory maximum sentence of 15 years in federal prison once he pleads guilty to the charges.
Zuberi, who operated a venture capital firm called Avenue Ventures, solicited foreign nationals and representatives of foreign governments with claims he could use his influence in Washington, D.C. to change United States foreign policy and create business opportunities for his clients and himself. According to court documents, clients gave Zuberi money for consulting fees, to make investments, or to fund campaign contributions. As part of his efforts to influence public policy, Zuberi hired lobbyists, retained public relations professionals and made campaign contributions – which gave him access to high-level U.S. officials, some of whom took action in support of his clients. As evidence of his access and influence, Zuberi distributed to his clients photographs of himself discussing policy with elected officials.
While some U.S. officials were willing to take action on issues Zuberi put forward, most of Zuberi’s business efforts were unsuccessful and his clients suffered significant losses. Many of the lobbyists, public relations consultants, and other subcontractors also suffered losses when Zuberi refused to pay them, according to the information.
Zuberi, on the other hand, became wealthy, primarily as the result of fraudulent representations about his background, influence, and the use of client funds, much of which constituted an “outright conversion of client money for defendant Zuberi’s own personal benefit,” the information states.
The information details dozens of illegal campaign contributions – including those paid by Zuberi using the names of other people, “conduit contributions” made by others that Zuberi reimbursed, and contributions to U.S. political campaigns that were financed by foreign entities and individuals.
The information further states that Zuberi accepted money from two foreign companies with promises that the funds would be used to contribute to political campaigns, but Zuberi took the majority of the money – more than $1.1 million – for his own personal use.
“Mr. Zuberi’s multi-faceted scheme allowed him to line his pockets by concealing the fact that he was representing foreign clients, obtaining access for clients by making a long series of illegal contributions, and skimming money paid by his clients,” said United States Attorney Nick Hanna. “Mr. Zuberi circumvented laws designed to insulate U.S. policy and our election process from foreign intervention. This investigation has halted his illegal conduct, will result in several felony convictions, and could send him to prison for a lengthy period of time.”
“American influence is not for sale,” said Paul Delacourt, the Assistant Director in Charge of the FBI’s Los Angeles Field Office. “Mr. Zuberi lured individuals who were seeking political influence in violation of U.S. law, and in the process, enriched himself by defrauding those with whom he interacted.”
The information details other aspects of Zuberi’s scheme through which he personally profited. Zuberi mounted efforts to convince the government of Bahrain to lift sanctions on a citizen of Bahrain in connection with the development of a large resort in that country. The scheme falsely created the appearance that Avenue Ventures had made a major investment in the Bahrain project. Zuberi lobbied members of Congress to apply political pressure on Bahrain to cease its interference in the project, claiming that it was adversely affecting him as a U.S. investor. In fact, Zuberi designed these efforts to assist the citizen of Bahrain. Zuberi illegally received compensation for these efforts because he failed to register as a foreign agent of the Bahraini citizen.
Zuberi also converted to his own benefit money invested in U.S. Cares, a company established to export humanitarian items to Iran, according to the information. In 2013 and 2014, investors put approximately $7 million into U.S. Cares, but Zuberi used over 90 percent of the investor funds for his personal benefit – to purchase real estate, pay down mortgages, remodel properties, invest in brokerage accounts, donate $250,000 to a non-profit organization established by a former high-ranking elected official, and to pay down personal credit card debt, according to court documents.
In 2014, Zuberi entered into a contract with the government of Sri Lanka to rehabilitate Sri Lanka’s image in the United States, which had suffered as a result of allegations of persecution of the country’s minority Tamil population. Zuberi promised to make substantial expenditures on lobbying efforts, legal expenses and media buys, which prompted Sri Lanka to agree to pay Zuberi a total of $8.5 million over the course of six months in 2014. According to court documents, days after Sri Lanka made an initial payment of $3.5 million, Zuberi transferred $1.6 million into his personal brokerage accounts and used another $1.5 million to purchase real estate.
The information states that Sri Lanka wired a total of $6.5 million pursuant to the contract, and Zuberi directed more than $5.65 million of that money to the benefit of himself and his spouse. Zuberi paid less than $850,000 to lobbyists, public relations firms and law firms, and certain subcontractors did not receive full payment after Zuberi falsely claimed that Sri Lanka had not provided sufficient funds to pay invoices, according to the information.
“This case should deter individuals who seek to provide false statements to the Department and covertly influence our political process on behalf of foreign governments,” said Assistant Attorney General for National Security John C. Demers. “Through misrepresentations in his FARA filing, Mr. Zuberi attempted to deceive our elected officials and the American public on behalf of Sri Lanka. The Department of Justice treats these crimes with the gravity that they deserve and will continue to aggressively identify, investigate and prosecute FARA violations.”
“Mr. Zuberi was the primary organizer of paid political efforts to mold the opinion of political officials, including members of Congress, to benefit Sri Lanka. Instead, he used shell business entities to divert millions of dollars for his own personal use,” stated Special Agent in Charge Ryan L. Korner of IRS Criminal Investigation’s Los Angeles Field Office. “Today's announcement of Mr. Zuberi’s anticipated guilty plea to tax and campaign finance violations demonstrates IRS-CI’s continued commitment to work alongside our federal law enforcement partners to ensure the system remains fair for everyone.”
In relation to the FARA charge in the information, Zuberi agreed to plead guilty to submitting false registration statements in which he concealed his direction of the Sri Lanka lobbying effort, as well as the millions of dollars he received.
In relation to the tax charge in the information, Zuberi agreed to plead guilty to one count of tax evasion for failing to report on his 2014 tax return millions of dollars in income he received from Sri Lanka. While the 2014 income tax return claimed income of $558,233, Zuberi failed to report more than $5.65 million he received in relation to the Sri Lanka lobbying effort. Zuberi admits in his plea agreement that his tax evasion over the course of four years – 2012 through 2015 – caused tax losses of at least $3.5 million and as much as $9.5 million.
In relation to the campaign finance charge, Zuberi agreed to plead guilty to a charge of violating the Federal Election Campaign Act in 2015 by making conduit contributions in the names of other people, reimbursing contributions made by others, and being reimbursed for contributions he made. In his plea agreement, Zuberi admits that over a five-year period – 2012 through 2016 – he made or solicited more than $250,000 in illegal campaign contributions.
Zuberi is expected to make his initial appearance in this case in United States District Court in downtown Los Angeles on October 30.
This matter is being investigated by the FBI and IRS Criminal Investigation.
Outcome: 10/22/2019 1 INFORMATION filed as to Imaad Shah Zuberi (1) count(s) 1, 2. Offense occurred in LA. (mhe) (Entered: 10/25/2019)
10/22/2019 2 CASE SUMMARY filed by AUSA Daniel J O'Brien as to Defendant Imaad Shah Zuberi; defendants Year of Birth: 1970 (mhe) (Entered: 10/25/2019)
10/22/2019 4 NOTICE of Related Case(s) filed by Plaintiff USA as to Defendant Imaad Shah Zuberi Related Case(s): 19CR537 (mhe) (Entered: 10/25/2019)
10/22/2019 5 PLEA AGREEMENT filed by Plaintiff USA as to Defendant Imaad Shah Zuberi (mhe) (Entered: 10/25/2019)
10/22/2019 8 MEMORANDUM filed by Plaintiff USA (See attachment) (mhe) (Entered: 10/25/2019)
10/22/2019 9 MEMORANDUM filed by Plaintiff USA (See attachment) (mhe) (Entered: 10/25/2019)