Enforcement
October 22, 2019

Businessman to Plead Guilty to Fraudulent Foreign Lobbying Efforts

By Samuel Rubenfeld

A California-based venture capitalist and high-profile political fundraiser has agreed to plead guilty to falsifying records to conceal his work as a foreign agent while lobbying U.S. government officials, prosecutors said Tuesday.

Imaad Zuberi, who was vice chair of venture-capital firm Avenue Ventures, also will plead guilty to 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, the prosecutors said. He faces up to 15 years in prison after making the plea in U.S. federal court.

Court records filed as part of Zuberi’s plea deal show some of the misconduct in his case involved interactions with the U.S. Treasury Department’s Office of Foreign Assets Control (OFAC), and with parties eventually sanctioned by OFAC. 

Zuberi, who has raised money for Democrats and Republicans, has been under investigation for several years over his ties to foreign governments. Prosecutors said that he had agreed to plead guilty to a three-count criminal information that included a charge of violating the Foreign Agents Registration Act (FARA), a law requiring disclosure of lobbying on behalf of foreigners.

Zuberi solicited foreign nationals and representatives of foreign governments with claims he could use his influence in Washington, D.C. to change U.S. foreign policy and create business opportunities ⁠— for his clients and for himself, prosecutors said. 

Though some U.S. officials were willing to take action on Zuberi’s behalf, most of his efforts were unsuccessful and his clients suffered significant losses, prosecutors said. But Zuberi became wealthy, primarily as a result of fraudulent representations about his background, influence and his misuse of client funds, much of which he used for himself, prosecutors said. 

“Zuberi circumvented laws designed to insulate U.S. policy and our election process from foreign intervention,” said U.S. Attorney Nick Hanna, in a statement.

 

U.S. CARES

Zuberi took for himself investments he solicited for U.S. Cares, a company he established to export humanitarian items to Iran, according to the court filings. 

Investors in 2013 and 2014, including Al Aqili Group LLC, put about $7 million into U.S. Cares, but Zuberi used more than 90 percent of the money for his personal benefit, prosecutors said. Avenue Ventures owned 28.5 percent of U.S. Cares and Al Aqili Group took a 9.5 percent stake as a result of its investment, according to an operating agreement cited by prosecutors. Another investor, identified as Company D, held 20 percent.

Neither Saeed Al Aqili, who is chief executive of Al Aqili Group LLC, nor the company are  named in the court record, but the filing notes that the person and company involved were sanctioned April 29, 2014 ⁠— as they were ⁠— for facilitating oil sales for Iran and the country’s Islamic Revolutionary Guard Corps (IRGC). Both were delisted by the U.S. in 2016, however. 

The Al Aqili Group investment into U.S. Cares was made around October 2013, but it sold its shares in November 2014, after the company was sanctioned, to Company D, the filing said.

Zuberi used the majority of the funds he took from U.S. Cares to buy real estate, pay down mortgages, remodel properties, invest in a brokerage account, pay down credit card debt and donate $250,000 to a non-profit launched by a former elected official, according to prosecutors.

He also paid a law firm to prepare an application for an OFAC license to make humanitarian exports to Iran, which Zuberi submitted in November 2014, court records said. Certain U.S. sanctions on Iran were removed in January 2016 with the implementation of the nuclear deal, and a month later OFAC said in a response to the application that the transactions sought in the license application “appear to be generally authorized.” 

Zuberi took no further action after that regarding the license application, according to the court record. The U.S. left the nuclear agreement in May 2018 and has since re-imposed sanctions.

 

Kharon research

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