Sunday, June 12, 2005, the San Diego Union-Tribune published a story about a US defense contractor buying a house, reselling it less than a year later for a $700,000 loss. The seller was a US Congressman.
Soon the story included two yachts, a condo, another house, successful businessmen with various legal problems and a common inability to hold their own in financial dealings with the uncannily canny Congressman.
Several federal agencies opened investigations. There were raids of businesses and homes in California, DC, and New York. In July the Congressman announced he would not seek reelection to a ninth term. In August the US Attorney's office charged the Congressman had "demanded and received" a bribe. November 28th the Congressman resigned his seat, an admitted felon.
1. The Rep Randy 'Duke' Cunningham (R) Shenanigan Program & Worksheet attempts to visually organize and track the unfolding story. First version, mid-July with updates in August and November.
2. The Plea Agreement (pdf) from United States v Randall Harold Cunningham, filed November 28, 2005.
Exercise: put both documents on a common timeline, one side showing the real time news coverage, the other what the defendant admitted in open court.
| Brent Wilkes | #1 | |
| MW | Mitchell Wade | #2 |
| TK | Thomas Kontogiannis | #3 |
| Coastal Capital | #4 | |
| JR | Joseph M Della Ratta |
| from Shenanigans Worksheet | time | from US v RH Cunningham | |
|---|---|---|---|
Brent Wilkes, president of defense contractor ADCS (Automated Document Conversion Systems), was not mentioned in the Shenanigans Worksheet until an update noting that ADCS headquarters and his home were raided by Federal agents on August 16, 2005.
Retired Navy officer Mitchell J Wade founded MZM in 1993 moving on from a program manager position in the Pentagon. In August of 2002 he bought a 42 foot boat, the Bouy Toy, renamed it Duke Stir.
MZM started to grow in late 2002 when it received a blanket purchase order from the Pentagon, good for $163M. (update: New work orders were cut off in June 2005.) MZM helps the government with "enigmatic problems".
In November of 2003 MZM bought the Del Mar house from Duke for $1.675M. Soon after, MZM put the Del Mar up for sale, listing it $1.68M and selling it in October, 2004 for $975K.
In April of 2004 Duke moved onto the Duke Stir, docked at Duke's slip at the Capital Yacht Club. MZM let Duke live on the boat in exchange for slip fees and maintenance.
Wade resigned as CEO of MZM and is trying to sell his interest in the company.
– chronology –
| date | amount | |
|---|---|---|
| Nov 2003 | $1,675,000 | MZM buys Del Mar house |
| Oct 2004 | $975,000 | MZM sells Del Mar house |
Thomas Kontogiannis is a New York real estate developer. In Oct, 2002 he pleaded guilty in a bid rigging scam involving computers for New York schools. His co-defendants received about $1M in cash, trips, houses, and phony loans.
He contacted Duke for help arranging a pardon for the fraud conviction. He purchased the Kelly C from Duke. (update: Duke wrote a letter to the Queens District Attorney on TK's behalf in 2000, before TK was charged.) Coastal Capital, a company owned by his nephew and daughter, provided financing for the Arlington condo and the Rancho Santa Fe house.
– chronology –
| date | amount | |
|---|---|---|
| Mar 2002 | $150,000 | loan (Coastal Capital) for Arlington condo |
| late 2002 | $627,000 | buy the Kelly C |
| late 2003 | $1,095,000 | loan (Coastal Capital) for Rancho Santa Fe |
| Mar 2005 | $500,000 | retire a 10% Rancho Santa Fe note |
Coastal Capitol made three loans to Duke to purchase the Arlington condominium and the Rancho Santa Fe home. The company was owned by the nephew and daughter of Thomas Kontogiannis.
Joseph M Della Ratta was an officer of Della Ratta Inc, a construction firm, and Commercial Management Company, a real estate management firm. He was also a trustee of profit sharing plan associated with the two companies.
The profit sharing plan was terminated in 1999. In Dec of 2000 a law suit was filed by participants in the plan. The court issued a restraining order prohibited the trustees from further withdrawing assets of the plan.
In April 2002 Della Ratta sold an Arlington VA condominium to Duke. The condo is in a building overlooking the Potomac, just across the river from the Capital Yacht Club.
In July 2003 a federal court appointed an independent fidiciary to distribute the remaining assets of the profit sharing plan. JR and an associate were removed as trustees, ordered to restore $166,000 to the plan and were permanently barred from administering Employee Retirement Income Security Act plans.
| date | amount | |
|---|---|---|
| Apr 2002 | $350,000 | sells Eads Street condo to Duke. Coastal Capital provides a loan of $150,000 – the balance cash. |