Law360 is providing free access to its coronavirus coverage to make sure all members of the legal community have accurate information in this time of uncertainty and change. Use the form below to sign up for any of our weekly newsletters. Signing up for any of our section newsletters will opt you in to the weekly Coronavirus briefing.
Sign up for our Hospitality newsletter
You must correct or enter the following before you can sign up:
Thank You!
Law360 (April 2, 2020, 8:41 PM EDT ) An ex-hospitality executive in prison for stealing nearly $14 million from his previous employer and evading taxes on almost $28 million in income asked a New Jersey federal court Thursday to release him to home confinement, saying the facility can't "prevent COVID-19 from becoming a de facto death sentence" for him.
George Dfouni, who is serving a nearly four-year prison sentence on wire fraud and tax evasion charges, noted that "the virus thrives in densely packed populations" and claimed the Lewisburg, Pennsylvania, facility is "ill-equipped to contain the pandemic and prevent COVID-19 from becoming a de facto death sentence for Dfouni."
The former chief operating officer of a New York-based hospitality company, the 49-year-old Dfouni said he is "particularly vulnerable" to COVID-19 because he suffers from hypertension, tuberculosis, and methicillin-resistant Staphylococcus aureus, or MRSA, and had back surgery three months ago.
Letting Dfouni "finish out his sentence at home is the only prudent response to the extraordinary and compelling circumstances created by the novel coronavirus," according to his emergency motion.
While the Lewisburg facility has no documented cases of inmates with COVID-19, "it is inevitable that there will be," the motion stated. In such a facility, it's difficult to practice "hygienic and social distancing techniques," the motion stated.
Given those challenges, the "highly infectious nature of COVID-19," and Dfouni's "'high risk'" ailments, "this court should find that Mr. Dfouni's legitimate medical risk is a sufficiently extraordinary and compelling basis for granting compassionate release," the motion said.
Dfouni is scheduled to be released on April 13, 2021, according to the Federal Bureau of Prisons website. However, the motion noted that, after completing a drug abuse treatment program, Dfouni is set to be released to home confinement on Sept. 22.
Between 1996 and 2015, Dfouni served as chief operating officer for the hospitality business, which owns and operates hotels in New York and New Jersey, prosecutors said.
From 2007 to September 2015, Dfouni negotiated various contracts on the company's behalf with two other businesses that leased New York hotel properties from his then-employer, prosecutors said. Dfouni arranged for the other businesses to send their payments directly to him, and each contract included a signing bonus for him, prosecutors said.
While he was expected to keep his signing bonus and turn over the remaining dollars to his then-employer, Dfouni pocketed a portion of the money owed to the company to support his gambling expenses and lavish lifestyle, prosecutors said. He embezzled a total of $13.8 million from the business, prosecutors said.
Between 2007 and 2014, Dfouni also failed to report roughly $27.7 million in income to the Internal Revenue Service, including the money he stole from the company, prosecutors said.
After having pled guilty to the charges, Dfouni was sentenced in October 2018 to 46 months in prison.
In seeking his release over coronavirus fears, Dfouni noted how 14 U.S. senators from both major parties expressed concerns about the health of federal prison staff and inmates amid the pandemic in a recent letter to U.S. Attorney General William Barr and Michael Carvajal, director of the Federal Bureau of Prisons.
Dfouni also pointed out how "in the last few days, other jails and prisons have already started to proactively release elderly and sick inmates who are at high risk of infection, as well as releasing as many nonviolent offenders as possible in an effort to reduce the incarcerated population and thus reduce the risk of spread."
He cited in part how the New Jersey Supreme Court approved an agreement to release hundreds of certain low-risk inmates from county jails.
"Therefore, while COVID-19 remains an unprecedented emergency, many states [and politicians] have recognized that they have a duty to flatten the curve inside incarcerated spaces. So, too, should this court," the motion stated.
Counsel for Dfouni did not immediately respond to a request for comment Thursday.
Matthew Reilly, a spokesman for the U.S. Attorney's Office for the District of New Jersey, said Thursday the office declined to comment.
The government is represented by Anthony Moscato of the U.S. Attorney's Office for the District of New Jersey.
Dfouni is represented by Assistant Federal Public Defender Peter M. Carter.
The case is U.S. v. Dfouni, case number 2:18-cr-00028, in the U.S. District Court for the District of New Jersey.
--Editing by Janice Carter Brown.
For a reprint of this article, please contact reprints@law360.com.
