Businessman admits buying Cunningham's influence

By: TERI FIGUEROA - Staff Writer | Thursday, August 30, 2007 11:45 PM PDT ∞

SAN DIEGO ---- An international businessman with a criminal past bribed a North County congressman in order to buy influence and suggested that he fed the lawmaker national security intelligence, the man said in newly unsealed court transcripts.

In a closed federal courtroom, Thomas Kontogiannis admitted to helping finance former Rep. Randy "Duke" Cunningham's purchase of a $2.5 million Rancho Santa Fe mansion. Kontogiannis pleaded guilty to one felony count of engaging in a monetary transaction in which "he knew the transaction involved criminally derived property."

Kontogiannis was charged with hiding the house transaction that ultimately brought down Cunningham by funneling it through a relative's mortgage company.

On Thursday, the North County Times obtained the previously sealed transcripts of three February hearings in Kontogiannis' case.

The case has been shrouded in secrecy for months. The newly released documents shine more light on the bribery scandal that landed Cunningham, an Escondido Republican, in federal prison.

During his plea on Feb. 23, Kontogiannis ---- a New York businessman charged with bribery three times in 14 years ---- told U.S. District Judge Larry Alan Burns that his relationship with Cunningham had an element of national service.

Kontogiannis twice made reference to gathering and sharing information for the good of national security.

"It was never personal interest, your honor," Kontogiannis said. "My interest is the United States, basically. And he (Cunningham) was in a position that I could reach and tell them information that I was gathering all over the world."

Burns pressed Kontogiannis to explain how he benefited from laundering money to pay Cunningham's mortgage. After talking about national security, the businessman said he needed Cunningham in his corner.

"It is good to have a powerful congressman that if you ever need anything, you can ask him to help you or assist you in something that you might need," Kontogiannis said.

Burns then asked Kontogiannis if he was buying Cunningham's influence.

"Definitely," Kontogiannis replied.

The statements are part of closed-court transcripts that the trial judge ordered unsealed this week. Peppered throughout the transcripts are blacked-out pieces of the hearing.

Federal prosecutors asked for the private hearings in February to keep Kontogiannis' cooperation secret.

Burns later agreed to keep Kontogiannis' guilty plea under wraps for a short time, saying that he was "convinced" that making it public could endanger the defendant.

Kontogiannis' plea agreement with federal prosecutors was made public in June, but transcripts of the hearings had remained sealed. Burns eventually decided to unseal most of the transcripts from the February hearing, a decision that last week won the backing of the 9th U.S. Circuit Court of Appeals.

Kontogiannis faces a maximum sentence of 10 years in federal prison and a maximum fine of $250,000. He has also agreed to forfeit $1 million to the government.

This is Kontogiannis' third guilty plea in federal court since the 1990s.

The Long Island, N.Y., resident pleaded guilty to fraud and conspiracy in federal court in 1994 in an overseas visa scam involving bribery. In 2002, Kontogiannis pleaded guilty for his role in a multimillion-dollar bribery scheme involving a school district in Queens, N.Y.

In the thick of that school scandal, Cunningham wrote a letter to the Queens County district attorney in defense of Kontogiannis.

In both of his old cases, Kontogiannis received probation. He never served a day behind bars.

In accepting Kontogiannis' guilty plea in the Cunningham scandal six months ago, Burns warned Kontogiannis to keep his nose clean.

"One of the worst things you could do is be involved in a shady loan deal or something like that," the judge said.

Kontogiannis is not in custody, and sealed documents and redacted transcripts leave it unclear about whether he has the court's permission to travel out of the country. In February, Burns ordered Kontogiannis to turn over his passport and to get the government's OK before leaving U.S. soil. Portions of the transcript that appeared to address his travel restrictions were blacked out.

A July court document stated that Kontogiannis could travel out of the country with federal agents.

Last week, the North County Times tracked Kontogiannis to a five-star hotel in Greece. Kontogiannis answered a phone call to his hotel room, then sharply referred all questions to his attorney.

His New York defense attorney, Gregory O'Connell, did not return repeated phone calls. Officials with the U.S. attorney's office declined to comment on any travel restrictions the court levied against Kontogiannis.

Staff writer Scott Marshall contributed to this report. Contact staff writer Teri Figueroa at (760) 631-6624 or tfigueroa@nctimes.com.

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