Federal government discloses interest in congressman's home - Yahoo! News

SAN DIEGO (AP) -- The federal government said for the first time in court that it is seeking to seize a California congressman's home because prosecutors believe it was purchased with ill-gotten gains.


The charge, disclosed Thursday in an amendment to a complaint that was previously filed secretly, said Rep. Randy "Duke" Cunningham, R-Calif., sold his previous home at an inflated price to a defense contractor whose company was seeking federal contracts. Cunningham then used the money from that sale to buy his current home for $2.55 million, according to the complaint.


"Cunningham demanded and received this money in return for being influenced in the performance of his official acts as a public official," according to the complaint, filed in federal court in San Diego.


Cunningham's attorneys have sought to either unseal the earlier complaint or force the government to lift a notice filed last month with the San Diego County recorder's office that indicates the government's interest in the property.


Lee Blalack, an attorney for Cunningham, called the amended complaint a "public relations exercise."


"In this country, it is illegal to take someone's property simply on the say-so of the government and we intend to show that this complaint is false," he said in a statement. "Duke Cunningham strongly denies these allegations and we will contest them in court as soon as the judge permits us to do so."


A hearing is scheduled Sept. 9.


The eight-term congressman said last month he would not seek re-election. He conceded showing "poor judgment" in the way he handled the sale of his home, but insisted he did nothing illegal.


In 2003, Cunningham sold a 3,826-square-foot house in the north San Diego suburb of Del Mar to Mitchell Wade, who took a $700,000 loss when he resold it a year later. During that span, home prices in San Diego County rose an average of nearly 25 percent.


At the same time, Wade's company, MZM Inc., was increasing its federal contracting business.


After selling the home, Cunningham bought a five-bedroom home in exclusive Rancho Santa Fe for $2.55 million. According to the complaint, he gained $1.4 million from selling the Del Mar home to Wade and drew on it for an initial payment.


Cunningham listed the Rancho Sante Fe home this month for $3.5 million.


The amended complaint repeats information that has previously been widely reported. It avoids other controversies that have dogged the congressman, including his living rent-free on Wade's 42-foot yacht in Washington.