Miami federal magistrate backs ex-Rep. Rivera’s bid to unfreeze assets to pay lawyer

When former Miami Congressman David Rivera and an associate were charged with acting as unregistered foreign agents for Venezuela, federal 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.

But on their own, U.S. prosecutors also placed legal holds on eight other Florida and Georgia properties belonging to the two defendants — unrelated to the alleged criminal activity — with a plan to seize them if necessary as “substitute assets” upon their convictions at trial.

On Thursday, in an unprecedented ruling, Magistrate Judge Edwin Torres found that the prosecutors could not legally restrain the defendants’ substitute assets before trial by placing holds on them in Miami-Dade County Court.

In his 23-page decision, Torres agreed with the defendants that “neither state nor federal law grants [prosecutors] the authority to constrain innocent assets in this manner prior to trial and conviction.” In particular, 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.

If Torres’ decision passes muster with U.S. District Judge Darrin Gayles, who was assigned the high-profile case, it would pave the way for Rivera and political consultant Esther Nuhfer to sell some Florida and Georgia real estate properties to hire their attorneys on a permanent basis and pay them legal fees.

Because of the dispute, both Rivera and Nuhfer, who were arrested in December, have been unable to retain two of Miami’s top criminal defense attorneys to represent them and have also been unable to enter formal not guilty pleas in Miami federal court. As a result, their criminal case, aside from the indictment unsealed in December, has barely gotten under way.

“If this decision stands, we will get paid from the sale of the substitute assets for our legal services and move forward with defending our clients,” said attorney Edward Shohat, who is representing Rivera along with lawyers David Weinstein and Monique Garcia.

Attorney David O. Markus, who is representing Nuhfer along with partner Margot Moss, condemned the prosecutors’ strategy of targeting the defendants’ substitute assets before trial as “hyper aggressive.”

“This case is a perfect example — trying to lock up assets that have no connection to the alleged offense before the clients can even hire counsel, forget about conviction,” Markus said. “It was an outrageous and unprecedented money grab.”

Rivera, 57, a Republican who served one term in Congress a decade ago, posted a statement about the magistrate judge’s decision on Twitter, saying “The Founding Fathers understood perfectly the potential dangers of an unchecked Department of ‘Justice.’ “

Assistant U.S. Attorney Harold Schimkat is expected to ask Gayles to reverse Torres’ decision, and, if that fails, he may bring the matter to the 11th U.S. Circuit Court of Appeals in Atlanta.

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.

As Venezuela’s economy was crashing in 2017, the country’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 in Miami who supposedly provided “international strategic consulting services” for the Venezuelan firm. The three recipients of the proceeds were his Venezuelan lawyer, Raul Gorrin, known as a TV medial mogul in Caracas with political connections, Rivera’s associate, Nuhfer, and a formerly convicted drug trafficker, Hugo Perera. Both Perera and Gorrin owned homes on exclusive Fisher Island.

In a new court filing, Rivera and his lawyers have asked the district judge, Gayles, to let him consult with Gorrin in Venezuela, saying he can both help him with his unregistered-foreign agent case and with the related civil business dispute in New York. Rivera says he hired Gorrin as a lawyer in 2017, but U.S. authorities allege that Gorrin was actually a subcontractor on Rivera’s high-paying consulting deal with Venezuela’s state-owned oil company, PDVSA — the contract that is at the heart of the criminal case against Rivera.

Gorrin, who is not charged in Rivera’s case, was indicted by a Miami federal grand jury on foreign corruption and money laundering charges in 2018. In court papers, prosecutors describe Gorrin as a “fugitive” from justice.