FORT LAUDERDALE, Fla. – Mega-lobbyist Jack Abramoff was indicted Thursday on federal fraud charges involving his purchase of SunCruz Casinos, whose former owner was gunned down gangland-style four years ago.

Abramoff, 40, has strong ties to House Majority Leader Tom DeLay, a Texas Republican who once described the lobbyist as “one of my closest and dearest friends.”

In the six-count indictment unsealed in Miami by U.S. Attorney R. Alexander Acosta, Abramoff and Adam Kidan, a New York businessman, were charged in a complex $23 million fraud scheme arising from their purchase of SunCruz in September 2000 from Konstantinos “Gus” Boulis.

Boulis, 51, was murdered in Fort Lauderdale on the night of Feb. 6, 2001, months after he sold the highly profitable SunCruz. As he was driving from his office around 9:30, another car stopped in front of his. A second car pulled alongside Boulis and someone shot him three times.

The 13-page indictment, resulting from a three-year investigation, does not mention Boulis’ murder. It does allege Abramoff and Kidan used “flash funds,” lied on financial statements and created counterfeit documents to persuade lenders to provide the bulk of the $147.5 million sale price of SunCruz’s Dania Beach-based operation.

Abramoff’s surrender was being negotiated Thursday evening by his Miami lawyer, Neal Sonnett, who would only say his client was outside South Florida. “We’re making arrangements for Mr. Abramoff to turn himself in so we can begin to defend this case,” Sonnett said.

The Associated Press reported Abramoff was preparing to surrender in Los Angeles.

Assistant U.S. attorney Tim Delaney said the charges show no one is immune from prosecution. “This demonstrates that regardless of position, status or wealth, fraudulent activity will not be tolerated,” he said.

Kidan, 36, is expected to surrender this morning and be arraigned at federal magistrate’s court in Fort Lauderdale.

The disbarred attorney and former owner of Dial-A-Mattress issued a statement through his attorney, Martin Jaffe of Hollywood: “I have cooperated fully with the federal investigation for the past three years because I have nothing to hide,” he said. “I did nothing wrong and these allegations are totally unfounded.”

Each of the indictment’s six counts carries a maximum penalty of five years in prison and a $250,000 fine.

Abramoff is known as “Casino Jack” for his work on behalf of Indian gambling interests. He is also the subject of a separate investigation out of Washington, in which a grand jury is reviewing his lobbying activities to determine if he overcharged his Indian clients by millions of dollars.

Under pressure from Democrats and some fellow Republicans, DeLay has asked the House Ethics Committee to review expensive trips he and other members of Congress took to Britain and Russia – trips that were organized by Abramoff.

Abramoff has close ties to several other Republican leaders, and raised more than $100,000 for President Bush’s 2004 re-election campaign.

DeLay and his spokesman could not be reached for comment Thursday evening.

In the SunCruz sale, federal authorities charge that Abramoff and Kidan deceived two lenders, Foothill Capital, a subsidiary of Wells Fargo, and Citadel Equity Group, neither technically defined as banks.

Boulis, a Greek immigrant, had founded the lucrative gambling “cruises to nowhere” in 1994 after making a fortune as owner of the Miami Subs restaurant chain. He quickly built SunCruz into a $30-million-a-year enterprise with a fleet of 11 boats in Florida and South Carolina.

The government sued Boulis, however, because as a foreign citizen he wasn’t eligible to own SunCruz. In early 2000 he agreed to settle the case by selling the operation.

Abramoff, Kidan and Ben Waldman, a failed congressional candidate who worked in President Reagan’s administration, offered to buy SunCruz with a $23 million down payment and $60 million loan from Foothill and Citadel.

Boulis did not disclose that he was under pressure from the government to divest. And neither the buyers nor the seller told Foothill or Capital that Boulis had agreed at the last minute to waive the buyers’ $23 million cash down payment, instead accepting a $20 million promissory note and a role in the company. A fraudulent document was presented at the closing, the indictment says, indicating the $23 million in cash had been paid when, in fact, it had not.

The indictment alleges Abramoff and Kidan used borrowed money as “flash funds” to impress the lenders, filed false statements about their financial health and created the fake document presented at the sale’s closing.

Waldman is not named in the indictment and has never been a target, his attorney, Jane Moscowitz of Miami, has said.

Bankruptcy and related lawsuits resulted, as well as the grand jury investigation. Within just a few months, Kidan defaulted on the promissory note to Boulis and was behind on payments to Foothill. SunCruz filed for bankruptcy on June 21, 2001, nine months after the new owners took over, and four months after Boulis’ murder.

Kidan admitted in bankruptcy court that the promissory notes were substituted for the $23 million. He also acknowledged that he had not made any payments to Boulis.

SunCruz recently moved out of active bankruptcy after four years, trustee Jeffrey Beck of Boca Raton said earlier this year.

Now, only miscellaneous claims and tax bills are left to be resolved before the SunCruz is completely liquidated, perhaps by early next year. Boulis’ estate signed off on the plan earlier this year.

South Florida Sun-Sentinel William Gibson and Ihosvani Rodriguez contributed to this report.


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