The Kontogiannis Rabbit Hole. Quite a coincidence, huh?

Documents show that the daughter of Thomas Kontogiannis, a New York developer who pleaded guilty to laundering bribe money for Cunningham, bought a home owned by the late uncle of Assistant U.S. Attorney Phillip Halpern, one of the prosecutors on the Cunningham case.

Michael's defense attorney, Ray Granger, says the deal gives the appearance of favoritism to Kontogiannis. He also alleges in papers filed in federal court yesterday that the federal government likely knew about the transaction, which he said involved a bank account that was used to launder bribes for the ex-congressman.

Michael, who is Kontogiannis' nephew, is scheduled to go on trial next month on charges of conspiracy, money laundering, obstruction of justice and unlawful monetary transactions.

The papers allege that Kontogiannis' daughter, Annette Apergis, purchased a Nassau County, N.Y., home from a member of the Halpern family in June 2005. The prosecutor's uncle died in 2003 and the home, on a privately owned and maintained street, was bought from his widow, according to the papers.

But the transaction wasn't recorded until this year � after Kontogiannis took a plea deal from prosecutors. Kontogiannis pleaded guilty to one count of money laundering for his role in hiding the bribes given to former congressman Randy "Duke" Cunningham through mortgages. ...

The court filing includes copies of the land records and checks detailing the land sale, which took place days after The San Diego Union-Tribune first wrote about the questionable sale of Cunningham's Rancho Santa Fe home. ...

Included in the filing is a declaration from Michael, which says that in late 2006 or early 2007 Kontogiannis told him that he had a “common bond” with one of the prosecutors on the case – Halpern – and that Kontogiannis and Halpern's uncle had been neighbors for years. ...

Granger's motion is as much an attack on Kontogiannis as it is on the prosecutors.

Search warrant applications by government investigators for Kontogiannis' businesses alleged that Kontogiannis used numerous bank accounts connected to his various businesses to further his mortgage frauds, according to the papers filed by Granger.

One of the bank accounts was used in May 2004 to launder bribes to Cunningham to pay off a mortgage on the former congressman's Rancho Santa Fe mansion, according to Granger's motion.

Granger said that same account was used by Annette Apergis in June 2005 – more than a year later – to buy the Long Island home of Halpern's uncle. Granger argues that “in all likelihood that the proceeds of criminal activity were used to purchase the Halpern residence.”

Further, Granger said, because of the intense investigation of Kontogiannis it is unlikely the government did not know of the connection between the two families. ...

The motion also alleges that by turning a “blind eye” to Kontogiannis' continuing fraudulent practices, the federal government is in essence offering an improper inducement to secure his cooperation – which is also ground for dismissing the case.

Update: Marcy has posted the court filings:

http://thenexthurrah.typepad.com/the_next_hurrah/files/070807_michael_motion_to_dismiss.pdf

Her comment: "Michael has a point here. The government has acknowledged that Kontogiannis was involved in extensive mortgage fraud. But the plea only included one count. So there is one giant unanswered question why the government is choosing not to charge the rest of them."

Posted by Laura at August 18, 2007 03:33 PM