Washington, D.C. (Oct. 3, 2018) — The United States District Court for the District of Columbia has denied a motion filed by the Council on American-Islamic Relations (CAIR) in a failed effort to eliminate the consumer fraud allegations in a massive fraud case set to go to trial early next year. The result of the trial court’s ruling is that CAIR National, operating out of the District of Columbia, must stand trial not only for breach of fiduciary duty and common law fraud, but also for violations of Virginia’s statutory consumer fraud, which provides for statutory penalties, punitive damages, and, importantly, legal fees and costs. The decade-long litigation exposes CAIR to more than a million dollars in legal fees alone.
The plaintiffs in this case, five victims of the CAIR fraud, are represented by David Yerushalmi and Robert J. Muise of the American Freedom Law Center.
David Yerushalmi, lead counsel for the five plaintiffs in the two consolidated cases alleging that CAIR hired a fake lawyer who defrauded the CAIR clients, explained the decisiveness of the court’s ruling: “The trial court not only denied CAIR’s motion, but also pointedly explained that CAIR’s lawyer undoubtedly committed consumer fraud, along with common law fraud and breach of fiduciary duty. The only question for the jury is whether CAIR is liable as the employer for its lawyer’s fraudulent behavior. Given CAIR’s cover-up and pubic admissions, that question will not be a difficult one for the jury.”
CAIR, a self-described Muslim public interest law firm, was previously named as a Muslim Brotherhood-Hamas front group by the FBI and the U.S. Attorney’s Office in the federal criminal trial and conviction of a terrorist funding cell organized around one of the largest Muslim charities, the Holy Land Foundation (HLF). HLF raised funds for violent jihad on behalf of Hamas, and top CAIR officials were part of the conspiracy. In addition, several of CAIR’s top executives have been convicted of terror-related crimes. As a result, the FBI publicly announced that it has terminated any outreach activities with the national organization, which bills itself as “America’s largest Muslim civil liberties and advocacy organization.”
The two lawsuits, which were consolidated by the court because they arose out of the same facts, follow an earlier lawsuit that had also alleged that CAIR’s fraudulent conduct amounted to racketeering, a federal RICO crime. In that case, the court dismissed the RICO counts, concluding that CAIR’s conduct as alleged was fraudulent but not a technical violation of RICO.
The pending lawsuits allege that Morris Days, the “Resident Attorney” and “Manager for Civil Rights” at the now defunct CAIR-MD/VA chapter in Herndon, Virginia, was in fact not an attorney and that he failed to provide legal services for clients who came to CAIR for legal representation. As alleged, CAIR knew of this fraud and purposefully conspired with Days to keep the CAIR clients from discovering that their legal matters were being mishandled or not handled at all. Furthermore, the complaints allege that according to CAIR internal documents, there were hundreds of victims of the CAIR fraud scheme.
According to court documents, CAIR knew or should have known that Days was not a lawyer when it hired him. But, like many criminal organizations, things got worse when CAIR officials were confronted with clear evidence of Days’ fraudulent conduct. Rather than come clean and attempt to rectify past wrongs, CAIR conspired with its Virginia Chapter to conceal and further the fraud.
To this end, CAIR officials purposefully concealed the truth about Days from their clients, law enforcement, the Virginia and D.C. state bar associations, and the media. When CAIR did get irate calls from clients about Days’ failure to provide competent legal services, CAIR fraudulently deceived their clients about Days’ relationship to CAIR, suggesting he was never actually employed by CAIR, and even concealing the fact that CAIR had fired him once some of the victims began threatening to sue.
David Yerushalmi, AFLC’s co-founder and senior legal counsel, remarked: “CAIR engaged in a massive criminal fraud in which literally hundreds of CAIR clients have been victimized. In this ruling, the federal court in our nation’s capital has spoken clear: CAIR National will stand trial for all of its fraudulent behavior and even a nominal judgement will require CAIR to pay all of our clients’ legal fees accumulated over the past decade. Justice might be slow and circuitous, but it has come knocking at CAIR’s door for its due. We will make certain the knock is answered.