Credit: Darrow Montgomery

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A trio of indictments against a politically connected developer—two unsealed in federal court last week and a third in D.C. Superior—allege a pattern of fraud that appears linked to the District’s pay-to-play culture.

Keith Forney is one of D.C.’s go-to construction contractors. His projects include the Deanwood Community Center and Library, the renovation of Eastern Market, and school modernization projects at Simon Elementary School and Leckie Elementary School.

Forney has reported contributing more than $37,000 to elected officials in D.C. over the last decade. In 2013 he gave $2,800 to former mayor and then-Councilmember Marion Barry, which in part led to a censure of Barry and the loss of his Council committee chairmanship.

Forney is perhaps best known, however, as a co-founder of the Stadium Club, the notorious strip club that has been marred by legal troubles for years.

In U.S. v. Keith Forney, a grand jury has charged that Forney filed business deductions related to his company, Forney Enterprises Inc., to pay for non-business expenses including personal credit card bills, home renovations for an employee, his child’s university expenses, contributions to political candidates, and reimbursement to individuals he directed to contribute to political candidates.

Forney is also charged with engaging a certified public accounting firm, identified as “Firm A” in court documents, to prepare financial statements to obtain bonding for his company’s construction projects; and a tax preparer, identified as “Firm B,” to whom he misrepresented business income and losses in order to generate false tax returns. Forney did not return a call to his office, and his lawyer declined to comment.

On the surface, the indictments appear to be routine fraud cases against a D.C. small business owner. But it’s not so simple.

The story behind the first indictment goes back to the founding of Stadium Club. In 2009, former drug kingpin Cornell Jones agreed to sell two properties on Queens Chapel Road in Northeast to a company called Stadium Group, which Forney and a drywall contractor from Maryland named James “Tru” Redding co-founded.

Jones, according to federal court documents, entered into a consulting agreement with the group for “services previously rendered” that would pay him $24,000 a month for 120 months—a total of $2.8 million. Those services consisted of arranging for a liquor license transfer and preparing the property for conversion to a nightclub.

In 2010 Jones sold the property to Stadium Group for $2.7 million, and soon, the group launched the Stadium Club, featuring strippers, expensive steaks, and private entertainment rooms.

Following articles in The Washington Times in 2011, then-D.C. Attorney General Irvin B. Nathan sued Jones and his non-profit organization Miracle Hands in Superior Court and alleged that they diverted $330,000 in government funds intended for a job training center that instead became the Stadium Club. In 2014, a jury held him liable for the funds.

Meantime, federal investigators were investigating Jones and Redding for tax evasion, according to federal court records. They both pleaded guilty in 2016.

At Jones’ sentencing, U.S. District Judge Richard Leon grilled the government about the nature of the relationship between Jones, Redding and Forney. Assistant U.S. Attorney Anthony Saler was forced to disclose a broader conspiracy investigation related to Jones and his associates. He referred to it as an ongoing “umbrella grand jury.”

Clues about that grand jury emerged in April 2016 after “Tru” Redding was sentenced to two years in federal prison and ordered to pay $1.4 million to the IRS. In phone conversations with City Paper, Redding claimed that federal investigators had approached him about Forney and contracts to renovate city properties that involved Redding as a subcontractor.

“I didn’t know [Forney’s] being investigated because of all these politicians,” Redding said, identifying former City Administrator Neil O. Albert as a person the feds were interested in.

Whatever was going on, Jones and Redding have gone to federal prison, and now Forney is facing the possibility of prison time as well. Albert’s name has yet to surface in federal court. The identities of the D.C. politicians Forney contributed to and the people who Forney allegedly reimbursed for their contributions have not been disclosed, either.

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A second indictment, unsealed last week in D.C. Superior Court, charges Forney with fraud, perjury and corrupt election practices based on an alleged scheme to misrepresent himself as a D.C. resident in order to obtain preference points as a Resident Owned Business. According to the court filing, Forney gave false information in order to obtain Maryland and D.C. driver’s licenses so that he could vote and compete as a small business in both jurisdictions.

He is also charged with violating D.C. law by reimbursing third parties for campaign contributions that, when totaled, exceeded campaign finance limits. The candidate, Delano Hunter, ran for the Ward 5 seat in 2012 and lost to Kenyan McDuffie. In addition to three $500 checks from Forney, FEI, and Stadium Club, Hunter received an additional $2,000 from four contributors who were reimbursed by Forney, the indictment states.

Forney used the same method to contribute to Mayor Muriel Bowser’s 2012 Ward 4 Council campaign, and Vincent Orange’s 2012 campaign for reelection to his at-large seat.

In the third indictment, Forney is charged with mail fraud and other unlawful activity related to a copier maintenance and repair contract with Maryland’s Administrative Office of Courts, in which his firm was retained to satisfy a Minority Business Enterprise requirement for services he allegedly did not perform.

In that case, hard money lender and business “consultant” John Vassos was responsible for maintaining the contract, after having provided approximately $2 million to Forney and Redding to finance the purchase of the property where Stadium Club is located, in addition to other loans. Vassos is identified in the case, but not charged.