SAN DIEGO – The federal government revealed publicly in court for the first time Thursday that it is seeking to seize a California congressman's home because prosecutors believe it was purchased with ill-gotten gains.
A government complaint had previously been filed under seal, but an amendment to that complaint became public when it was filed Thursday in federal court in San Diego.
The government alleges Rep. Randy "Duke" Cunningham (search), R-Calif., sold his previous home at an inflated price to a defense contractor whose company was seeking federal contracts. Cunningham, a member of two committees involved in military issues (search), then used that money 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," the complaint says.
Cunningham's attorneys have sought to either unseal the original complaint or force the government to lift a notice filed last month with the San Diego County recorder's office indicating the government's interest in the property. Such a claim can make selling a property difficult, and Cunningham recently listed his for $3.5 million.
"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," said his attorney, Lee Blalack. "Duke Cunningham strongly denies these allegations and we will contest them in court."
A hearing is scheduled Sept. 9.
The congressman, whose term ends in 2007, said last month he would not seek a ninth term. He has conceded he may have showed "poor judgment" with the sale of his home but insists he did nothing illegal.
In 2003, Cunningham sold his 3,826-square-foot house in the suburb of Del Mar to Mitchell Wade, who took a $700,000 loss when he resold it a year later. According to the complaint, Cunningham gained $1.4 million from the sale.
At the same time, Wade's company MZM Inc. was increasing its federal contracting business. A federal grand jury (search) is investigating.