LOS ANGELES (CN) — An attempt by the former defense minister of Kuwait to claim more than $100 million in California real estate and other assets the U.S. government says were acquired with stolen money looks in trouble after a federal judge tentatively granted the government motion to strike his claims.
U.S. District Judge Christina Snyder didn't issue a final ruling at a hearing Monday on the U.S. request to reject the claims by Khaled al-Sabah in the consolidated forfeiture lawsuits federal prosecutors filed in 2020 to seize three homes in Beverly Hills, a penthouse and an apartment in LA, a private jet, a yacht, a Lamborghini sports car and about $40,000 worth of Manny Pacquiao memorabilia.
An attorney for al-Sabah argued at the hearing that the late emir of Kuwait had given his client complete authority to use the funds that belonged to the royal family, not the Kuwaiti government. A Kuwaiti court in 2022 exonerated al-Sabah of charges he had misappropriated the funds, according to his lawyer Bryan Merryman.
"This was not army money or government money," Merryman said. "It's royal family money, and Mr. al-Sabah is a member of the royal family."
The Kuwaiti government, however, has said in response to al-Sabah's argument that he has standing, purportedly as an agent of the late emir, to claim the assets in the forfeiture litigation that this was "outlandish." Kuwait claims al-Sabah's acquittal was based on a letter from his brother that has since been declared "null and void" by the current emir. Kuwait last year sued al-Sabah, who was the country's minister of defense from 2013 to 2017, for fraud in California court.
According to the U.S. Justice Department, starting around 2010, al-Sabah and other Kuwaiti officials used the defense ministry'’s London attaché office to illegally funnel more than $100 million of Kuwaiti public funds from the office's procurement account to bank accounts in California.
Al-Sabah used the money for an investment with a California father-and-son duo in the notorious "Mountain" in Beverly Hills — a 157-acre, undeveloped hilltop property that over the years has belonged to the sister of the last shah of Iran, Merv Griffin and the late Herbal Life founder Mark Hughes. The site has at one point been valued at $1 billion.
The investment, according al-Sabah, turned out to be a fraud scheme. His California business partners, Victorino Noval, a convicted felon, and his son Victor Franco Noval, stole most of the $165 million in investment funds they received from him, according to al-Sabah. They were the ones. al-Sabah said, who used the funds to buy the Beverly Hills properties, the private airplane, yacht and Lamborghini that the U.S. now seeks to seize.
The Novals and various business entities that hold title to the assets are also pursuing claims in the forfeiture lawsuits.
At Monday's hearing Ronald Richards, a lawyer representing the Novals' businesses, supported the government's motion to strike al-Sabah's claims to the assets and said that, under U.S. forfeiture law, only entities that have actual title in a property can file a claim to them.
Assistant U.S. Attorney Daniel Boyle told the judge that al-Sabah only sought to bring claims on behalf of himself and his children, not on behalf of the Kuwaiti royal family. Al-Sabah's wife, who allegedly provided a large chunk of the money that went into the failed "Mountain" investment, never filed a claim herself, the government lawyer said.
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