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Duke co-conspirator sells corporate headquarters

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NORTH COUNTY -- With a federal indictment reportedly looming for his alleged involvement in the Randy "Duke" Cunningham case, Poway defense contractor Brent Wilkes sold his company headquarters this week, county records show.

Wilkes has been tied to Cunningham, the former North County Republican congressman who pleaded guilty last year to his role in a $2.4 million bribery scheme in exchange for government contracts. Cunningham is now serving a federal sentence of 8 years and four months in an Arizona prison.

Officials with the county tax assessors office said Friday that Rancho Bernardo-based Ironwood 12 LLC made an initial payment of $3 million to Wilkes' company, Al Dust Properties LLC, for the property on Stowe Drive in Poway. The company agreed to assume all outstanding debts and/or liens relating to the former home to several of Wilkes' companies. County assessor records indicate that the sale includes the 97,000-square-foot building and all its improvements and fixtures.

Officials with the Poway Unified School District were negotiating with Wilkes to buy the building, and on Friday they said that with the sale to Ironwood, they are trying to work out a deal with the new owner to acquire the high-end property for district headquarters.

John Collins, deputy superintendent of the Poway Unified School District, said that he first learned that Ironwood was the buyer when he got a phone call from Paul Smithers on Friday afternoon, offering the district the property. The Poway school board has called a special meeting for Monday to discuss a potential deal.

Smithers is listed in records filed with the California secretary of state as the agent for Ironwood 12 LLC, who according to Federal Election Commission records was the attorney for the Wilkes Corp. in 2002.

Smithers could not be reached for comment Friday.

A San Diego federal grand jury has been considering evidence for more than a year against Wilkes, who was a longtime contributor to Cunningham's congressional campaigns.

On Wednesday, two sources close to the case said that an indictment is being prepared that would charge Wilkes and two of the others -- New York businessman Thomas Kontogiannis and his nephew, John T. Michael -- with bribery and several conspiracy counts related to the Cunningham case.

In earlier court documents, federal prosecutors alleged that four co-conspirators, including Wilkes, lavished the former 50th Congressional District Republican with cash, loans and gifts in a complex bribery scheme to steer government business to defense contractors, including Wilkes' ADCS.

Early last year, the owner of Washington defense contractor MZM Inc., Mitchell Wade, pleaded guilty in federal court to having bribed Cunningham with more than $1 million and is awaiting sentencing.

Wilkes is also facing a possible second indictment, according to the same sources, who say that prosecutors plan to ask the grand jury to return charges of honest services fraud and conspiracy against him and a close friend, Kyle "Dusty" Foggo, a former CIA official.

Honest services fraud is a combination of mail and wire fraud. The charge is often used in public corruption cases in which officials engage in an ongoing pattern of activities such as accepting gifts, trips or promises of future employment from private individuals.

Wilkes' attorney, Mark Geragos, could not be reached for comment Friday. However, in an interview earlier this week, Geragos said he has seen nothing that "would merit an indictment" of Wilkes.

As recently as mid-January, Wilkes was in default on a $12.1 million real estate loan on the property and it had been scheduled to be auctioned Thursday to pay off the loan. However, on Wednesday, the title insurance company that was holding the auction announced that the event had been postponed at the last minute until late March. No reason was given for the postponement. As of Friday, Wilkes owed about $590,000 in back property taxes on the building.

In addition to the back taxes on the ADCS property, he is delinquent on $5,000 in property taxes that he owes on three homes he owns in San Diego and Chula Vista, officials with the county treasurer tax collector's office said Friday.

In addition, the online newspaper Voice of San Diego reported Thursday that Wilkes had received notices of default or preforeclosure notices on real estate loans for his primary residence -- a 5,325 square-foot home in a gated Poway development -- and on another home he owns in Chula Vista.

Staff writers Teri Figueroa and Andrea Moss contributed to this report. Contact staff writer William Finn Bennett at (760) 740-5426, or wbennett@nctimes.com. Comment at nctimes.com.

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