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Cross-Border Corruption Claim in Texas

SAN ANTONIO (CN) - Three Mexican businessmen sued a U.S. investment firm this week, accusing its owners of using "various racketeering activities" to con them in a real estate deal and have them falsely arrested at the request of corrupt officials in Mexico.

Their arrests in the United States were influenced by Mexico's then-attorney general after he was bribed with a luxury penthouse in the multimillion-dollar development in Acapulco called Punta Mar, according to the lengthy federal complaint.

The businessmen, Ernesto Karam Garcia and Miguel Angel Leyva Urquia, both of whom own homes in San Antonio, and Salvador Rio De La Loza Postigo, of Florida, sued Clarion Partners LLC, its subsidiary Lion Mexico Consolidated LP, two Clarion owner-directors and a Clarion employee.

The individual defendants are James Christian Hendricks, Onay Safia Patrice Payne, both described as "an equity owner and director of Clarion," and Clarion employee Ronald Scott Brown. All three worked at Clarion's Dallas office, according to the Dec. 14 lawsuit.

Clarion Partners, based in New York, is a real estate investment firm with more than $38 billion in assets.

The businessmen claim that Clarion Partners persuaded them to invest in the Acapulco resort, "and then took illegal and fraudulent steps to extinguish plaintiffs' interest in the development."

"Defendants found it easy to use the power of money to corrupt public officials in Mexico and resorted to various racketeering activities such as fraud, extortion, bribery, and obstruction of justice to illegally take property and business interests of plaintiffs and others to enrich themselves," the complaint states.

Lead plaintiff Ernesto Karam Garcia was arrested in San Antonio and deported in 2013.

U.S. Immigration and Customs Enforcement said in a statement on Nov. 21 that year that according to the Mexican Attorney General's Office, "Karam-Garcia and two other associates allegedly defrauded several hundred Mexican citizens of their earnings, totaling more than $150 million in U.S. currency. ICE officers worked with Mexican authorities to identify that Karam-Garcia was wanted for fraud in Mexico. The PGR [Mexican attorney general's office] assisted ICE by providing copies of the warrant and helped coordinate the removal at the U.S./Mexico International Border at Laredo, Texas."

Karam-Garcia et al. say that's not the real story. They claim that Clarion Partners and its employees orchestrated from the United States a fraudulent criminal complaint to be filed in Mexico, and extorted a trial judge there to issue a false arrest warrant against them.

They claim the defendants used "numerous and continuing acts of fraud, bribery, extortion, obstruction of justice, and the manipulation and misuse of U.S. government resources - all for defendants' private and personal financial gain and at the expense of all others."

They say their 2013 arrests by U.S. Immigration and Customs Enforcement were carried out at the request of Jesus Murillo Karam, Mexico's attorney general from 2012 until February this year.

They do not accuse ICE of wrongdoing.

"Unbeknownst to ICE, it was manipulated by Mexico's attorney General Murillo to use its governmental powers to further the private and illicit interest of defendants," the complaint states.

The 61-page lawsuit names several other U.S. and Mexican citizens who allegedly were involved with the conspiracy, including a Mexican attorney, the president of a local Mexican court system, the man who allegedly arranged the penthouse bribe, and a woman who allegedly "disguised" their equity investments as "credit."

None of these people, however, are named as defendants.

Nor is Mexico's former attorney general, Jesus Murillo Karam, named as a defendant, though the lawsuit explicitly accuses him of taking a bribe to have the plaintiffs arrested.

"Murillo Karam received as a bribe a lien-free luxury penthouse from defendants and

immediately thereafter Murillo got personally involved in requesting U.S. law enforcement agencies to pursue the individual plaintiffs pursuant to false allegations in an effort to keep plaintiffs from pursuing their rights against defendants," the complaint states.

The plaintiffs claim that after he accepted the penthouse condo, the attorney general used his office "to pursue the harassment, arrest and extortion of the plaintiffs Ernesto, Miguel and Salvador."

"The effects of the criminal enterprise is [sic] broad in that it affects all of the innocent purchasers of properties in Punta Mar, as well as the plaintiffs," the complaint states.

Murillo Karam, 67, resigned in February under public pressure, as he presided over the bungled and incompetent investigation of the murders of 43 college students in Guerrero state. Investigators looking for the bodies turned up dozens of other corpses. Acapulco is in Guerrero state.

Murillo Karam, a member of the Party of the Institutional Revolution, or PRI, was governor of Hidalgo state from 1993 to 1998. He did not leave the government when he resigned in February. He was transferred to the Ministry of Agrarian and Urban Development.

The plaintiffs say the "the most heinous RICO acts" took place in Texas and that the harassment has been continuing since 2012.

Clarion Partners did not immediately respond to an emailed request for comment Wednesday afternoon.

The plaintiffs seek punitive damages "because of the reprehensible and outrageous nature of these acts:" RICO conspiracy, fraud, tortious interference with contract, malicious prosecution, and unjust enrichment.

The complaint alleges extortion 16 times, but extortion is not listed as a cause of action.

It is unclear whether plaintiff Karam Garcia and the former attorney general, Murillo Karam, are related.

The plaintiffs are represented by Rebecca Vela with Pena Garcia Guerrero, of McAllen.

Mexico's political and court systems are notoriously corrupt, and buying or investing in land there is particularly tricky for foreigners, particularly on or near the coasts.

Typically, foreigners are informed that it is easier to acquire land, often on a 99-year lease, by doing so with a Mexican partner.

Typically, the Mexican partner gets 51 percent of the partnership.

And so it goes.

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