Businessman Adam Kidan pleaded guilty Thursday to defrauding lenders
New York businessman Adam Kidan pleaded guilty Thursday to defrauding lenders of more than $20 million in the purchase of SunCruz Casinos -- a deal that police believe is linked to the mob-style slaying of former SunCruz owner Gus Boulis.
Kidan agreed to help prosecutors build their fraud case against his former partner Jack Abramoff, a once-influential Washington lobbyist.
''Mr. Kidan has acknowledged today that he, along with co-defendant Jack Abramoff, made false representations to lenders,'' Kidan's lawyer, Joseph Conway, told news reporters after the brief hearing in Miami federal court.
A sentencing hearing is scheduled for March 1. Kidan, who declined to speak to the media, faces up to seven years in prison and has to repay the money.
But the fraud case involving the $147.5 million sale of SunCruz is the least of Kidan's or Abramoff's legal problems.
Kidan's possible role in Boulis' 2001 slaying is of keen interest to Fort Lauderdale detectives, who already have charged three suspects, including one linked to a New York organized crime family. And Justice Department prosecutors are interested in Abramoff, a key player in an ongoing public-corruption investigation in the nation's capital.
Boulis was gunned down only months after Kidan and Abramoff bought SunCruz. Kidan, 41, has not been implicated in the murder, but one defendant, Anthony Moscatiello, told Fort Lauderdale police that Kidan explicitly ordered the February 2001 hit against Boulis. Moscatiello, charged with Boulis' murder in September, is an associate and close pal of the late Gambino family crime boss John Gotti. He had been paid $145,000 by SunCruz for catering services approved by Kidan.
Conway, Kidan's attorney, dismissed the allegations.
''Mr. Kidan has no knowledge of the murder and had no participation in the murder,'' he said, noting that Kidan is cooperating with Fort Lauderdale police.
Abramoff, 46, has legal problems of his own beyond Miami and the SunCruz case.
Abramoff's former lobbying partner, Michael Scanlon, has already pleaded guilty to bribery charges stemming from their representation of a half-dozen Indian tribes that own casinos.
Abramoff has not been charged in the Washington investigation, but he is seeking to work out a plea deal that would involve providing information about his campaign fundraising and gifts showered upon certain Republican congressmen in exchange for legislative favors, the sources said. The outcome of Abramoff's negotiations could affect his defense in the SunCruz case in Miami, the sources said.
Abramoff is scheduled for trial in Miami on Jan. 9. His attorney, Neal Sonnett, declined comment Thursday, but has said he is preparing to defend his client at trial.
The story of SunCruz begins with Boulis. He made his first fortune with the Miami Subs chain, then launched his Broward-based fleet of gambling ships in 1994. He eventually built the business into 11 ships, 2,300 slot machines and 175 gaming tables. The ships sailed from nine Florida ports and Myrtle Beach, S.C., to international waters.
A FORCED SALE
Boulis was forced to sell SunCruz in 1999 after federal prosecutors reached a settlement with him on civil charges of violating the Shipping Act because he purchased his fleet as a non-U.S. citizen.
Through Washington contacts, Boulis met Abramoff. He turned to Kidan as a potential buyer. They had known each other as Republican activists in college.
In 2000, Kidan had just sold his Dial-a-Mattress business in Washington. He and Abramoff teamed up to buy SunCruz, but they needed to secure a loan to seal the deal.
They contacted Foothill Capital, a California-based unit of Wells Fargo & Co. Joining Foothill in the financing was Citadel Equity Fund, based in the Cayman Islands.
According to an indictment returned in August, Abramoff and Kidan lied about their personal wealth to qualify for the loan and about the millions of dollars they were putting into the deal.
The two lenders agreed to put up $60 million in financing, as long as the business partners guaranteed the loans and invested $23 million of their own money. Boulis also agreed to accept promissory notes from Kidan and Abramoff for the balance of the sale and keep a 10 percent interest in SunCruz.
But at the September 2000 closing in New York, the lenders alleged that Kidan and Abramoff -- as well as SunCruz representatives -- hoodwinked them into believing the partners had transferred $23 million to Boulis.
When the lenders demanded proof, both Kidan and a smaller partner, Ben Waldman, a former Reagan administration official, sent a Foothill executive a faxed copy of a ''wire transfer'' record that purportedly documented the transfer on the last day of the closing.
Foothill and Citadel provided the Kidan-Abramoff group with the $60 million -- only to learn later that the partners had given Boulis promissory notes, not cash.
''Adam Kidan agreed and conspired with the co-defendant and others to commit wire fraud,'' said Assistant U.S. Attorney Lawrence LaVecchio, who was assisted by prosecutors Paul Schwartz and Guy Singer.
WIRE FRAUD
On Thursday, before U.S. District Judge Paul Huck, Kidan pleaded guilty to one conspiracy charge and to a separate wire fraud count based on his Sept. 26, 2000, faxed transmission of the SunCruz closing statement bearing his signature. For his part, Abramoff claims it was Kidan who was supposed to put up all that money.
Law enforcement sources say, however, that correspondence between the SunCruz partners and Scanlon, the Washington lobbyist, implicates both Abramoff and Kidan in the alleged scheme. Scanlon, a former aide to U.S. Rep. Tom DeLay, R-Texas, before joining Abramoff, is helping Washington prosecutors as well as those in South Florida, according to his plea agreement.
New York businessman Adam Kidan pleaded guilty Thursday to defrauding lenders of more than $20 million in the purchase of SunCruz Casinos -- a deal that police believe is linked to the mob-style slaying of former SunCruz owner Gus Boulis.