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Mar 30, 2023
Ex-Fugee Pras Michel Driven by Greed in Aiding 1MDB Tycoon, Jury Told
(Bloomberg) -- Grammy-winning rapper Pras Michel was driven by greed and “profited exorbitantly” as he sought to lobby the US government illegally on behalf of a financier accused of orchestrating the looting of billions of dollars from Malaysian development fund 1MDB, a prosecutor told jurors Thursday.
Jurors also began hearing testimony against Michel, 50, a member of the hip-hop group the Fugees accused of joining an illegal campaign to lobby President Donald Trump and the Justice Department to drop its investigation of the financier, Jho Low.
“This is a case about foreign money, foreign influence and concealment,” US prosecutor Nicole Lockhart told jurors in her opening statement in federal court in Washington. “The defendant wanted money and was willing to do anything necessary to get paid.”
Prosecutors charged Michel with acting as an unregistered agent of China in pushing the US to extradite Chinese billionaire Guo Wengui, a vocal critic of Beijing with ties to former Trump adviser Steve Bannon. Michel is also accused of witness tampering and illegally funneling millions of dollars of Low’s money into President Barack Obama’s campaign in 2012.
Lockhart said Michel made $18 million from the campaign-finance scheme and more than $70 million from his later lobbying.
A bearded Michel, who denies the charges, wore a dark suit and striped tie as he listened intently to Lockhart’s statement in a packed courtroom. His lawyer, David Kenner, took the unusual step of not giving his opening statement right after Lockhart, saying he may do so after the prosecutors conclude their case.
Jurors will hear the arc of how Michel grew wealthy in the 1990s with the success of the Fugees, lived lavishly as he worked on social-justice and political issues, and connected friends in politics, entertainment and finance. He was one of many celebrities in Low’s coterie, which drew him into the 1MDB scandal and negotiations between the US and China.
By 2012, Lockhart said, Michel was “looking for other ways to get paid.” He seized his chance through Low, who “spent exorbitant sums of money” to get close to famous people.
“Low wanted to buy his way into high places,” Lockhart said. “Michel was willing to help Low along the way as long as he got paid.”
Lockhart laid out a tale of international intrigue involving allegations that Low looted billions of dollars from 1Malaysia Development Bhd., which was ensnared in a global bribery scandal. Low, who was indicted with Michel, is considered a fugitive.
Goldman Sachs Group Inc. admitted it conspired to violate US anti-bribery laws and paid more than $2.9 billion, the largest penalty of its kind in US history, and more than $5 billion globally for its role in the scheme. Ex-Goldman banker Roger Ng was sentenced to 10 years in prison.
The trial is expected to feature testimony from a former Low friend, actor Leonardo DiCaprio. Low lavished actor DiCaprio with gifts, partied with him across the globe and financed his 2013 movie The Wolf of Wall Street. Other witnesses who may appear are Bannon and Steve Wynn, the casino magnate. The Justice Department had filed a civil lawsuit seeking to force Wynn to register as a foreign agent acting for China, claiming he lobbied for Guo’s removal. But a judge dismissed that case last year.
Kenner claims Michel acted in “America’s best interests” when he approached the FBI in 2017 to advocate for Guo’s return in exchange for American hostages. He also denied acting under the control of Low or China, saying he forged international relationships to get investments for entertainment projects that promote Black capitalism. He also says Michel was unaware of any requirements to register as a foreign agent, and he didn’t tamper with witnesses.
After her opening statement, the lead FBI agent, Robert Heuchling, testified as the government’s first witness. Prosecutors say Low gave Michel millions of dollars to put into Obama’s campaign to boost his influence in the US. Michel is charged with using about 20 straw donors to conceal the source of Low’s money.
Heuchling traced the flow of Low’s money through Michel to those donors, saying the rapper received $9 million in August 2012 into an account called PJ 2012 Holdings. He withdrew $100,000 to distribute to his personal account and the donors, whose contributions to Obama’s campaign nearly always matched the amount they got from Michel, the agent testified.
Prosecutors also showed jurors communications between Michel and Frank White, Obama’s top individual fundraiser, and a photo of the rapper meeting the former president at a campaign event in Miami.
In her opening, Lockhart said that at Low’s request, Michel put together a team of individuals with access to the top levels of the Trump administration and formed shell companies to fund an unregistered lobbying campaign to try to squelch a US investigation of 1MDB, Lockhart said.
That team included three people who later pleaded guilty: Elliott Broidy, a California businessman and top Trump fundraiser; George Higginbotham, a former Justice Department attorney; and Nickie Lum Davis, a Hawaii businesswoman. All three pleaded guilty to their role in the scheme. Lockhart told jurors they would hear testimony from Broidy and Higginbotham.
US District Judge Colleen Kollar-Kotelly has said the trial is expected to last about a month.
The case is US v. Michel, 19-cr-148, US District Court, District of Columbia.
(Updates with details of FBI agent’s testimony.)
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