Ex-congressman Rivera wins another fight against feds in bid to hire top lawyer

A federal judge has almost cleared the way for former Miami Congressman David Rivera to sell a few real estate properties in Florida so he can hire his top-flight attorney to defend him against charges of illegally working as an unregistered agent for Venezuela, money laundering and tax evasion.

U.S. District Judge Darrin Gayles on Monday upheld a magistrate’s decision saying federal prosecutors exceeded their authority when they placed legal holds on three of Rivera’s properties and two others belonging to a political associate charged with him in late 2022.

Although the five properties were unrelated to the alleged criminal activity, prosecutors put liens on them in Miami-Dade County Court with a plan to seize them if necessary as “substitute assets” upon their convictions at trial.

Gayles affirmed the unprecedented ruling by Magistrate Judge Edwin Torres, saying it was “well-reasoned.” In July, Torres found that prosecutors with the U.S. Attorney’s Office in Miami could not legally “constrain innocent assets in this manner prior to trial and conviction.”

Torres cited a U.S. Supreme Court case from South Florida that blocks prosecutors from freezing a defendant’s substitute assets before trial when they are needed to hire a lawyer, noting “it is the government that stubbornly fails to comprehend” the protection of this law under the Constitution.

Rivera and his defense attorney, Edward Shohat, said they were grateful for Gayles’ decision backing Torres.

“The legal issue decided [Monday] by Judge Gayles is one of national importance,” said Shohat, who has represented numerous high-profile clients over the past 50 years. “The order of Magistrate Judge Torres, which was upheld, has already been cited favorably by other federal judges both within [the South Florida] district and in other federal districts.”

Rivera, who has still not been arraigned because of his inability to hire Shohat permanently, took a jab at the prosecutors.

“Thank God for fair-minded judges who believe in the rule of law,” said Rivera, 58, a Republican. “They’re all America has left protecting against government lawfare and overreach.”

Beachfront condo being fought over

Despite the twin judicial rulings in his favor, Rivera is still fighting with Assistant U.S. Attorney Harold Schimkat over selling one of his three Florida properties — a valuable oceanfront condo in New Smyrna Beach — that the prosecutor claims is traceable to his income from working as an unregistered agent for Venezuela. Shohat said that the prosecutor’s position is wrong.

Gayles, the judge, is soon expected to decide on that final dispute, which could determine whether Rivera can raise enough money to pay Shohat’s legal fees.

At the same time, Rivera’s co-defendant, Miami political consultant Esther Nuhfer, can sell her two properties in Miami and Marathon in the Florida Keys to hire her attorneys on a permanent basis because prosecutors agreed those assets are not traceable to any criminal activity.

Since their arrests in December 2022, Rivera and Nuhfer have been unable to retain two of Miami’s top criminal defense attorneys to represent them and unable to enter formal not guilty pleas in Miami federal court. Their arraignments were recently postponed until March 11. As a result, their criminal case, aside from the indictment unsealed in December and later amended in July, has not made much progress.

Nuhfer is represented by Miami attorney David O. Markus and partner Margot Moss, who previously condemned the prosecutors’ strategy of targeting the defendants’ substitute assets before trial as “hyper aggressive” and an “unprecedented money grab.”

An indictment unsealed in December charged Rivera and Nuhfer with conspiring to commit offenses against the United States, failing to register as foreign agents as part of their consulting work for Venezuela’s oil subsidiary, PDV USA, and money laundering. Prosecutors obtained a judge’s order seeking to take about $24 million of their income by freezing their bank accounts, securities and four Florida properties linked to the alleged crime.

Hired by Venezuelan oil company

In 2017, Venezuela’s state-owned oil company hired Rivera for a costly public relations campaign to prop up the Venezuelan firm in the United States and to prevent U.S. sanctions. In just a few months, Rivera’s business, Interamerican Consulting, collected $20 million from Venezuela’s U.S. subsidiary, PDV USA, but its $50 million contract with the former politician abruptly ended when he was accused of doing little work, according to a lawsuit in New York that was filed before the federal indictment in Miami.

Court documents in both the civil and criminal cases revealed that Rivera diverted more than half of his PDV USA income — $13 million — to three subcontractors including Nuhfer, who supposedly provided “international strategic consulting services” for the Venezuelan firm.

Then last July, Rivera was additionally accused of failing to report hundreds of thousands of dollars in income — and diverting some of that money through a political campaign account to himself, according to an amended indictment.

The new indictment accused Rivera — who served a decade ago in Congress in a district covering parts of West Miami-Dade, including Kendall — of three tax crimes. The accusations include submitting a false corporate return for his consulting firm in 2017 and attempting to evade taxes on his personal return the following year.