A U.S. Magistrate judge on Thursday ordered Radu and Diana Nemes to remain detained pending the resolution of their extradition case.
The Nemeses' lawyer said she would appeal the decision.
Court documents reveal that agents found an underground bunker at the couple's property where they were building a "luxury home," and found more than a half dozen firearms, including an AR-15 "assault rifle," in the residence where the couple was living.
The Nemeses were students of the Ramtha School of Enlightenment, which is reported to encourage students to build underground bunkers.
Radu Nemes, 39, and his wife Diana Nemes, 38, who were arrested on Tuesday under an extradition treaty with Romania, are accused of defrauding the Romanian government of the equivalent of about $73 million, according to court documents. The Nemeses are also accused of laundering money, and allegedly used the funds to purchase vehicles, business interests and living expenses, and to construct a luxury home. Court documents also state they purchased a 67 percent interest in Eagleview Hill, LLC, the corporation that owns Eagleview Hill Winery in Rainier and Salida Wine Bar in Yelm. Winery owner Doug McCrea said Diana Nemes didn't fulfill her contractual obligations and no longer has a stake in the company. Additionally, her investment in the company never amounted to more than 50 percent, he said.
Diana Nemes had requested a bail hearing, arguing she was not a flight risk and that "special circumstances" justified her release on bail.
U.S. Magistrate Judge Karen Strombom wrote in a detention order that Diana Nemes "is a flight risk" and "did not ... (present) sufficient special circumstances to justify release on bail."
Radu Nemes didn't request a bail hearing and was ordered detained.
The Nemeses' lawyer argued in court documents that her client was not a flight risk, not a danger to the community, and said the evidence against her laid out by the U.S. government in court documents was weak.
U.S. Attorneys argued in court documents that Diana Nemes would pose a "significant risk of flight and a substantial danger to the community" if released, and wrote that she has access to "millions of dollars in hidden profits" generated by the Romanian tax fraud scheme she's accused of helping to orchestrate.
Martha Boersch, the Nemeses' lawyer, argued Thursday the fact that Diana Nemes is approximately five months pregnant constitutes a "special circumstance" allowing her release on bail. The Nemeses also have two boys, ages 6 and 9, Boersch said. She argued her client should be released to care for the boys, who are currently in custody of the state of Washington Department of Child and Family Services.
Incarceration may jeopardize Diana Nemes' pregnancy, Boersch wrote in a memorandum supporting Diana Nemes' release, and "given the likely duration of extradition proceedings, incarceration will mean her child will be born in jail and her existing children will be wards of the state."
The U.S. government contended in court documents that the federal detention center where the Nemeses are being held is capabale of fulfilling Diana Nemes' medical needs during her pregnancy, and said the center offers prenatal visits from OB/GYN specialists, prenatal vitamins are provided, and ongoing medical issues are monitored. When inmates are ready to deliver a baby, U.S. Marshals take them to an outside hospital to deliver the child.
Boersch argued there is no specific evidence of Diana Nemes' involvement in the tax evasion scheme the government alleges she and her husband participated in. Diana Nemes is not charged with money laundering in Romania, according to Boersch.
"(Diana Nemes) was arrested at or near the home she has lived in since she moved to the United States," Boersch writes in court documents. "Since she has been here she has lived openly with no effort to conceal her identity or whereabouts. Although she has known that the Romanian authorities would likely pursue her here, she has not fled. She has, instead, put her faith in this country's legal system, hoping to obtain its protections against a charge that is unsupported by reliable evidence, but entails the grave risk that she will be jailed on those unsupported charges in a country with a judicial system that is notoriously corrupt."
Boersch laid out in court documents various facts she said assert that Diana Nemes is not a flight risk: she has lived in the Yelm area, with her children attending school there, and has "substantial ties" to the area; she has "known about the Romanian investigation and made no effort to flee" and "lived openly and did not flee from authorities"; she has attempted to "legalize her presence" in the United States; her failure to appear for extradition hearings would impact her immigration status and "destroy any hope she has of being allowed to stay here"; and she "made no effort to flee even when she received suggestions of the Romanian authorities' continuing interest in pursuing her."
Boersch argued there is "absolutely nothing" in the government's complaints against Diana Nemes suggesting she presents any danger to the community.
If the court were to accept at face value the charges against Nemes, Boersch wrote, the charged conduct was "abberational," and the alleged crimes are financial and not violent; "indeed, they are allegations of tax evasion in a country with a notoriously corrupt government; and Diana Nemes' role appears minor," she wrote.
In its memorandum opposing release on bail, U.S. attorneys write that there is a presumption against bail in international extradition cases, because it's necessary for the U.S. to meet its treaty obligations.
"A person sought for extradition already is an international fugitive from justice; it is reasonable to think that person would flee if alerted to the charges," they write. "Even if the person were not in flight, the fact of an impending extradition to a foreign country to face serious criminal charges, the outcome of which is uncertain, is itself a strong incentive to flee."
Honoring extradition treaties is also necessary so the U.S. can expect reciprocation from other countries, they add.
"It is important that the United States be regarded in the international community as a country that honors its agreements in order to be in a position to demand that other nations meet their reciprocal obligations to the United States," they write.
In the memorandum, U.S. attorneys write, "during the execution of the search warrants of the Nemes' property located at 16549 Vail Road SE, Yelm, Washington, the property upon which the Nemes were constructing a massive log home, agents found and searched as well a fully equipped and furnished underground bunker, the entrance of which was controlled by steel doors which could be sealed from the inside." They write that the bunker could have comfortably housed the entire Nemes family for months or years, judging by the amount of food stored in the structure. Because the bunker has not been seized pending a forfeiture case, it would still have been available to Diana Nemes pending her release, they write.
More than half a dozen firearms, including an AR-15 "assault rifle," were found at the couple's residence at 16621 Deer Ridge Lane, according to court documents. Because the Nemeses' visas had expired and U.S. immigration authorities had issued detainers for them, according to the U.S. attorneys, the Nemeses were in possession of the guns illegally.
Boersch said there was no evidence any of the guns belonged to Diana Nemes.
In response to the claim by Boersch that the government will be unable to establish probable cause that Diana Nemes was involved in the Romanian crimes for which she was charged, U.S. attorneys argue there is documentation establishing her involvement in the scheme, and cites the evidence gathered by Romanian authorities submitted as part of its extradition request.
"This evidence establishes Diana Nemes' integral involvement in hiding the excess profits generated by the sale of the higher priced diesel fuel, via an account in Dubai in the name of Corralys Investments Limited, through the retention of an attorney at the time Romanian law enforcement authorities searched the attorney's office, in which Ms. Nemes expressed her concern that the authorities would discover financial documents regarding accounts held in Dubai, UAE, together with the discovery of a bank statement from Barclay's Bank in Dubai in the search clearly constitute probable cause to establish her involvement in the tax fraud scheme and in support of the criminal organization carrying it out," they write.
Strombom said there is no presumption of release in extradition cases, unless the person being extradited can show to the court that they are not a flight risk, not a danger to the community, and had other special circumstances.
Strombom said the only possible special circumstance raised was the need for Nemes' two sons to be cared for, but it didn't constitute a legal special circumstance, she said. The children are being cared for by the state, she said.
Strombom set an extradition hearing for 1:30 p.m. May 22.
[Note: This story was updated with additional information about Diana Nemes' investment in Eagleview Hill Winery.]
A Yelm couple accused of defrauding the Romanian government of $68.9 million was arrested by the FBI on Tuesday for extradition to Romania on charges of tax evasion.
According to documents filed in U.S. Western District Court in Tacoma (scroll below the story to read the documents in full), Radu Nemes, 39, and his wife, Diana Nemes, 38, have been charged in Romania with tax evasion stemming from a tax fraud scheme that defrauded the Romanian government of nearly $69 million. The couple was also reportedly charged with setting up an organized criminal group.
The Nemeses are also accused of laundering money, and allegedly used the funds to purchase vehicles, business interests and living expenses, and to construct a luxury home. Court documents also state they purchased a 67 percent interest in Eagleview Hill, LLC, the corporation that owns Eagleview Hill Winery in Rainier and Salida Wine Bar in Yelm.
Doug McCrea, owner of the winery, told the Nisqually Valley News Wednesday he was introduced to the Nemeses by Greg Simmons, who retired from his position as director of marketing at the Ramtha School of Enlightenment (RSE) last March. McCrea also identified the Nemeses’ as former RSE students.
A message left for a representative of the Ramtha School of Enlightenment Wednesday afternoon wasn’t returned by press time.
McCrea said Wednesday morning he had no idea of the Nemeses’ alleged criminal past when they invested in his company. The couple has not been involved in the business since October, he said.
According to court documents, a company the Nemeses controlled imported diesel fuel into Romania. The company sold approximately 990,000 tons of diesel fuel and falsely reported it as lower-grade industrial and maritime fuel at a lower tax rate, avoiding a tax liability of approximately 53 million Euros — the equivalent of about $68.9 million at current exchange rates, court documents state.
Romanian investigators discovered a large portion of the money was reportedly transferred out of Romania and laundered through accounts controlled by the Nemeses in Dubai, United Arab Emirates. The Nemeses and their associates opened numerous shell companies used to “launder the excess criminal proceeds of these sales and give the false appearance that the funds represented proceeds of sales of lower grade fuel,” court documents state.
According to court documents, the Nemeses were living in Yelm on expired visas, and had several U.S. bank accounts used to transfer “the proceeds of their Romanian crimes” into the U.S. from accounts in Dubai.
The Nemeses allegedly used the funds to purchase vehicles, business interests and living expenses, and to construct a luxury home at 16545 and 16459 Vail Road SE in Yelm.
“The Nemeses and their associates have utilized multiple bank accounts and shell corporations in the United States to conceal and disguise the nature, source, location, and control of the proceeds generated by the activity that resulted in charges being filed in Romania,” court documents state.
A complaint for forfeiture filed in district court lists several Yelm properties the Nemeses owned that were allegedly tied to money laundering.
They include properties at 9144 Burnett Road SE; 16621 Deer Ridge Lane SE; and the properties where they were allegedly building a luxury home.
The property at Deer Ridge Lane was believed to be the Nemeses’ current primary residence, court records state.
According to court documents, an amended operating agreement filed March 30, 2013, added Diane Nemes as a 67 percent member of Eagleview Hill, LLC, in exchange for a capital contribution of $300,000, of which $100,000 was payable within three business days. Diana Nemes was identified as the managing member.
Between Jan. 29 and April 12, 2013, Diana Nemes wired $65,000 in U.S. funds to Eagleview Hill, LLC, court documents state.
According to court documents, Diana Nemes’ contribution to the business is “more likely than not” traceable to the transfer of funds representing the proceeds of a specified unlawful activity into the U.S. “in a manner to conceal their source and/or a transaction” involving the proceeds of the unlawful activity.
“Diana Nemes’ … (67 percent) interest in Eagleview Hill, LLC … therefore constitutes property involved in money laundering and property traceable to such property.”
According to McCrea, Simmons first introduced him to the Nemeses’ sometime in the fall of 2012. The couple ultimately decided to invest in the winery.
Diana Nemes was the only one who actually signed paperwork investing in the company, McCrea said.
Diana Nemes initially expressed she wanted to invest in the company to obtain an E-2 visa, McCrea said. Such a visa allows a non-citizen to stay in the United States predicated on their being the majority owner of a business. McCrea said he wasn’t concerned at the time about making Diana Nemes the majority owner of the business.
McCrea said sometime last September, the couple told him they weren’t pleased with where the business was going. Simmons and the Nemeses met with McCrea’s accountant, who outlined the nature of the business and pointed out when the company was likely to break even, and when it was likely to make a profit, he said. By the nature of the business, he said, there’s a large gap between when the product gets made and when it gets sold.
The couple came to McCrea in September, when the company had already committed to purchasing all of its grapes — $60,000 in grapes, McCrea said.
McCrea said he remembers the exact words Radu Nemes said to him: “Old business, no good. New business, good.”
McCrea said he and his wife asked him to explain what he meant. All Nemes said was, “You will know soon,” he said.
Simmons came to McCrea a few days later with a purchase and sales agreement; the Nemeses wanted to purchase the entire company, McCrea said. If he made a decision not to sell the company within 72 hours, the Nemeses would stop funding the company, McCrea said he was told.
He said the price the Nemeses offered to pay was about a third of the value of the company’s inventory.
He said he refused to sell the company and on Oct. 1, the Nemeses cut the company off financially. Since then, McCrea and the company have had no contact with the Nemeses or with Simmons, he said.
Diana Nemes at that point failed to provide the financial investment necessary to comply with the operating agreement, and ceased to be the majority owner of the company, McCrea said.
With the company having already committed to a $60,000 grape purchase, the Nemeses’ departure hurt the company, McCrea said.
“They have … already crippled the company by having fundamentally pulled the plug on the financing,” he said.
Even so, the company is holding on and seeking new investors, he said.
McCrea said he learned of the Nemeses’ alleged crimes in Romania a couple weeks before they were arrested, but was concerned about potentially being retaliated against if he contacted law enforcement agencies.
“I was concerned about retribution, that there could potentially be some problems there,” he said. “Who knows? I wasn’t going out looking for it, because what they did, they did. It was over. And I’m not the kind of person to go back and say ‘Oh, I’ll get ‘em.’
“I figured, OK, they will create their own destiny. And they have.”