The Justice Department filed a civil forfeiture complaint in the U.S. District Court for the Central District of California seeking the forfeiture of a mansion located in Beverly Hills, California, alleged to have been purchased and renovated with approximately $30 million in proceeds of a scheme to defraud the U.S. Department of Defense’s Defense Logistics Agency (DLA), pay bribes to an official of the Kurdistan Region of Iraq, and violate U.S. money laundering laws.
The DOJ filed the complaint this week to seize the French-style villa known as Foothill Manor owned by Kurdish General Mansour Barzani, a senior Kurdish military figure and brother of Masrour Barzani, the prime minister of the semi-autonomous Kurdistan Region of Iraq, according to multiple reports.
The Alleged Scheme
From 2016 through 2020, a Virginia-based defense contractor and others engaged in a corrupt scheme to obtain more than $700 million from DLA for fuel deliveries to the U.S. military during Operation Inherent Resolve, the U.S. campaign against the Islamic State of Iraq and Syria.
The Erbil International Airport (EIA) located in Kurdistan, where Kurdish Peshmerga forces provided internal security and controlled entry to the facility, served as a critical delivery point for fuel used by the U.S. military in Iraq and Syria during the campaign.
The complaint alleges that officers of the contractor agreed to pay General Mansour Barzani, a senior Peshmerga official, a bribe of $0.25 per liter for exclusive access to deliver jet fuel in Kurdistan for the U.S. military and coalition forces and received hundreds of millions of dollars under DLA contracts.
Inflated Fuel Prices
The complaint did not directly name the company that allegedly bribed Barzani, calling it “Contractor 1.” However, the case provides contract numbers, which identify the company as Virginia-based logistics company DGCI, according to the Organized Crime and Corruption Reporting Project.
The contractor secured a lucrative foothold in a tightly controlled supply chain, billing the U.S. government as much as $10 per gallon for jet fuel, well above the Department of Defense’s typical range of roughly $2 to $3 per gallon, according to The Real Deal.
A 2017 Kurdish government memo reportedly listed only three companies authorized to deliver fuel to Erbil International Airport: DGCI, its Kurdish subcontractor Triple Arrow, and a third firm, Rainfloods.
Money Trail to Beverly Hills
According to the civil forfeiture complaint, funds that the contractor received from DLA as a result of the scheme were transferred to NYJD Trust No.1, a trust established in Virginia for the private benefit of Barzani.
In 2018, approximately $30 million of those funds were transferred from Barzani’s trust to purchase the Beverly Hills mansion as well as the renovation and improvement of the property from 2019 to 2022.
The property features a private theater, pool and European-style gardens, according to reports.
Barzani Family Holdings Under Scrutiny
This is not the first time the Barzani family’s financial activities have come under scrutiny. A previous investigation by OCCRP revealed that Mansour Barzani, along with his brothers—including Prime Minister Masrour Barzani—used a network of anonymous shell companies registered in jurisdictions such as Delaware and the British Virgin Islands to acquire more than $100 million worth of assets in the United States.
OCCRP stated that it reached out to the Kurdistan Regional Government’s office in Washington, DC, as well as to Barzani and DGCI, but received no replies before publication.
Investigation and Legal Process
The case was investigated by the FBI Washington Field Office, the Defense Criminal Investigative Service, and IRS Criminal Investigation.
Deputy Chief Michael B. Redmann and Senior Trial Attorney Steven Parker of the Criminal Division’s Money Laundering, Narcotics and Forfeiture Section (MNF) are handling the case. The U.S. Attorney’s Office for the Central District of California and the Justice Department’s Office of International Affairs also provided significant support.
A civil complaint is merely an allegation. The government has the burden of establishing the assets are subject to forfeiture by a preponderance of the evidence.