News

Statement on Indictments in Property Management Scandal

FOR IMMEDIATE RELEASE

September 27, 2005

Contact: Alan Heymann
(202) 727-8229

Today’s announcement of federal indictments against Douglas Jemal, Norman Jemal and Blake Escherick is the latest outcome of a process that began in 2003 with a Council investigation into fraud, waste and abuse involving Michael Lorusso, then Deputy Director of the DC Office of Property Management (OPM).

Councilmember Jim Graham (D-Ward One), as chair of the Council Subcommittee on Human Rights, Latino Affairs and Property Management, presided over 63-1/2 hours of investigative hearings into allegations of fraud at OPM. The hearings initially focused on the proposed $12.5 million purchase of an impoundment lot in Prince George’s County from Douglas Development, Mr. Jemal’s company. The purchase price was based on an inflated appraisal and higher-than-market rental rates that were approved by Mr. Lorusso. Among the findings, the Council’s investigation later revealed nearly $1 million in early lease payments for District office space at 77 P Street, NW, to Douglas Development after fraudulent invoices were submitted and approved by Mr. Lorusso.

Douglas Jemal refused to testify at a hearing on May 19, 2003 and took the 5th Amendment when he was compelled by subpoena to appear at hearings on June 6 and June 9. Councilmember Graham referred the results to the District of Columbia Corporation Counsel (now the Attorney General), the FBI, and the U.S. Attorney for the District of Columbia.

“I did all I could to protect the people and the assets of the District of Columbia,” said Councilmember Graham. In a tenacious and fair way, we did our duty regarding wrongdoings in the Office of Property Management. I commend Kenneth Wainstein, the U.S. Attorney, for his diligence in pursuing this matter.”

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