SAN FRANCISCO (CN) – Records used to justify seizing more than $4.5 million in assets from a man suspected of bribery and fraud in a $1.8 billion Hurricane Maria recovery project will likely stay sealed for now, a federal judge said in court Tuesday.
"It's hard for me to take a position until I've seen the affidavit, but I don't have a right to see it," U.S. District Judge Jon Tigar said.
Donald Keith Ellison, former president of Cobra Acquisitions Energy, asked Tigar to make the government hand over records used to authorize the seizure of $4.4 million in cash and securities from his Charles Schwab account along with his boat, pickup truck and farm equipment.
Cobra secured $1.8 billion in contracts to rebuild Puerto Rico’s power grid after Hurricane Maria caused massive destruction and widespread power outages in September 2017. Cobra is a wholly owned subsidiary of Mammoth Energy Services based in Oklahoma City.
The contracts were awarded by the Puerto Rico Electric Power Authority (PREPA), the island's state-owned electric provider, with grant money from the Federal Emergency Management Agency (FEMA).
In April, a federal magistrate judge in Puerto Rico authorized the government to seize $1 million from Ellison's bank account. A different judge later granted a request to seize another $3.4 million in cash and investments.
Ellison's lawyer argued in court Tuesday that the government is depriving his client of due process and the means to support his family by indefinitely holding the assets while it conducts a slow-moving investigation.
"The only way that we have to invoke our due process rights is to see the underlying affidavit," said Ellison's lawyer, William "Bill" Leone of Norton Rose Fulbright in New York.
The government said the seizure was based on a finding of probable cause that Ellison committed major fraud against the government, bribed a public official and engaged in a conspiracy.
In a sworn declaration, an FBI agent stated FEMA officials "should not be in direct contact with or advising contractors" that vie for government-funded projects.
Leone said the case is really about a close friendship that developed between Ellison and Ahsha Tribble, a FEMA deputy regional administrator who was sent to Puerto Rico to oversee power grid reconstruction after Hurricane Maria. Tribble is under investigation on allegations she diverted contracts to Cobra and was placed on administrative leave in May, according to the Wall Street Journal.
Leone said he interviewed witnesses and conducted his own investigation, which found several allegations involving Ellison are based on hearsay, including a false story about Ellison giving a Tribble a helicopter ride to a casino.
"There was no helicopter ride," Leone said. "This was just gossip."
If the affidavits are unsealed, Leone predicted they would be full of rumors and second-hand accounts.
Leone, who served as U.S. Attorney for the District of Colorado from 2004 to 2006, said he would be stunned if the sealed affidavit contains any actual evidence of wrongdoing by his client.
"If that's in this affidavit, then I will eat my hat," he said.
Tigar told Leone he lacks authority to unseal those files because the warrant was issued in the District of Puerto Rico.
"It was issued in a different district by a different judge," Tigar said. "I believe that judge has power that I don't have."
Ellison served as president of Cobra from January 2017 until June 7, 2019. In a sworn declaration, Ellison said the seizure of his assets has prevented him from paying child support and supporting his family. He also argues $250,000 was deposited in his account before he did any business in Puerto Rico, and that much of his initial $300,000 annual salary, which was later increased to $600,000 in 2018, was earned before Hurricane Maria.
He filed a motion to return his property in the Northern District of California on June 12. The case was filed in San Francisco because that's where Charles Schwab & Co., where Ellison's assets were held, is based.
The Department of Justice asked Tigar to transfer the case to Puerto Rico.
Tigar said he intends to issue a ruling by the end of this week.
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