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Morris acquitted in federal court on all 12 counts

Morris acquitted in federal court on all 12 counts

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Author: TJ Cooney
Published: Justice Integrity Project

Morris acquitted in federal court
Did Feds Indict Him Just To Create A ‘Witness’?
Case Status: A jury acquitted Jerome Ballarotto’s client in November, 2008

The 2008 jury acquittal of an American businessman accused of a fraud conspiracy in Iraq raises serious questions about the fairness of his treatment, which included pre-trial detention overseas for three months, ruination of his business and $2 million in legal fees. Seymour Morris Jr., the holder of an MBA from Harvard Business School, was accused by authorities in more than 100 news reports. One sample was CBS News, under the headline: 5 Charged In Iraq Fraud: Alleged Scheme Duped Provisional Authority Out Of $8M for Reconstruction. The fraud claims were reported by nearly all major national television networks. Morris says not one news organization to his knowledge reported his jury acquittal.

In early 2007, Romanian police arrested Morris at the request of officials from the U.S. Justice Department. Morris was an American businessman in Romania who owned an auto leasing company. He was charged with one count of conspiracy and 11 counts of wire fraud in Iraq, where he’d never been. Authorities jailed him in Bucharest for three months while the DOJ prepared the extradition papers, and then brought him back to the United States in handcuffs. The DOJ wanted Morris to testify against two military officers in Iraq for whom Morris’ company had sourced cars. Morris, whose sole contact with them had been via email through an intermediary, Philip Bloom, said he had no idea these people were military officers — much less receiving bribes from Bloom. Also, Morris said that he had no information that would help the DOJ convict them. The DOJ claimed Morris was an integral part of the conspiracy. Morris denied this, rejected any plea deal and went to trial. He won acquittal on all 12 counts.

To defend himself, Morris incurred legal bills of approximately $2 million. As described below, he now seeks reforms in the justice system to prevent abuses in the future.

Government Allegations
The Department of Justice announced the defendant’s indictment on Feb. 7, 2007 along with three U.S. Army reserve officers in a bid-rigging scam that steered millions of dollars for Iraq reconstruction projects to a contractor in exchange for cash, luxury cars and jewelry. In DOJ’s press conference announcing the indictment, Morris was accused of one count of conspiracy and 11 counts of wire fraud as a go-between for the military officers and the contractor. The husband of one of the reservists was accused of helping smuggle tens of thousands of dollars into the United States that the couple used to pay for a deck and a hot tub at their New Jersey house.

Together, the five used the $26 billion Iraqi rebuilding fund “as their own personal ATM machines,” claimed Deputy Attorney General Paul McNulty in announcing the charges. “These defendants actually took bricks of stolen cash … and smuggled them out of Iraq and back to the United States for their own personal use,” McNulty said. The indictment was part of an investigation of $8.6 million in Iraq contracts awarded to Bloom. Bloom, an American citizen who ran construction and services companies under Global Business Group, admitted to laundering at least $2 million that was stolen from reconstruction funds managed by the U.S.-led Coalition Provisional Authority in Iraq. The three reservists — Col. Curtis G. Whiteford of Utah, Lt. Col. Debra M. Harrison of New Jersey and Lt. Col. Michael B. Wheeler of Wisconsin — were responsible for helping supervise the funding and progress of the CPA contracts in al-Hillah, Iraq, which is southwest of Baghdad.

Defense
The rebuttal by Morris was that the prosecution’s case rested on the testimony of a felon and two or three emails taken out of context. The defendant’s lawyers provided the context for the emails that explained Morris’ actions as reasonable, and they showed how Morris had been totally transparent in his business dealings. In their cross-examination, they exposed the government’s sole witness as a liar.
The trial began in September 2008 after three delays, the last because the DOJ failed to produce 250,000 pages of discoveries helpful to the defense. Bloom, the DOJ’s key witness and the leader of the conspiracy, was serving a 48-month sentence for bribery in Iraq. But Bloom was granted early release after changing his story and providing testimony against Morris. Lawyers for Morris destroyed Bloom’s credibility by demonstrating his prior conviction for passing $480,000 of bad checks, transferring almost $1 million into a private bank account while in jail, and altering emails to the defendant to hide the military titles of the car buyers. The jury acquitted Morris on all counts.

Claims of Government Misconduct
Morris has alleged the following misconduct by prosecutors:
1. DOJ engaged in selective prosecution. DOJ was anxious to show the American public a crackdown on the massive corruption and fraud in Iraq. They focused on a small-time American contractor, Bloom, accused of over-billing $3.6 million on $8 million of construction contracts. Army officers awarding him contracts were accused of accepting bribes. The DOJ needed more evidence to secure a conviction, and seized upon Morris as a possible helpful witness. Because Morris lived in Romania, the DOJ played it safe by including him in the indictment and arresting him, abusing their discretion by holding him as a “flight risk.”
2. In the rush to judgment, DOJ failed to conduct a professional investigation of the defendant. They called his Cyprus-based offshore leasing company a “financial services company” (implying money laundering) rather than an auto-leasing company. The only factual information in the FBI report was that Morris was a member of the Harvard Club of New York. Nothing more substantial was provided. The FBI office in Romania never interviewed Morris or questioned anybody familiar with his business and professional activities. The DOJ couldn’t even get Morris’ name right: In its arrest warrant and numerous press releases, it erroneously identified him as “Michael Morris,” and claimed he owned two New York homes that actually belonged to an “R. Morris.”
3. After arresting Morris, the DOJ refused to extradite him immediately as he requested. To soften him up, they kept him in Romanian prison for three months where he was denied bail and denied full access to a lawyer. He and his reputation were subjected to international media frenzy, and his leasing company was forced into voluntary liquidation.
4. In its zeal to convict, SIGIR (the Special Inspector General for Iraq Reconstruction) jumped the gun and gave testimony before the Senate Judiciary Committee announcing that “Morris was convicted.” (See page 4 of testimony, third bullet.) This took place on March 20, 2007, while Morris was held in jail in Romania, awaiting extradition.
5. After Morris refused a plea deal DOJ realized it had a problem because it had no evidence on Morris. But instead of doing further investigation itself, the DOJ delegated this function to Bloom’s lawyers.
6. In need of “evidence” against Morris, the DOJ put the squeeze on Bloom. In his sixth witness statement, dated July 2007, Bloom contradicted his five earlier statements and told the prosecutors that Morris knew Bloom’s clients were military officers receiving bribes. The DOJ rewarded Bloom for his “cooperation” by releasing him early, and allowing him to pay his $3.6 million restitution at the rate of $300/month…for 1,000 years.

Case Status. A jury acquitted Jerome Ballarotto’s client in November, 2008

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