Money in arms dealing, extortion scheme tied to Panama City Beach

PANAMA CITY — A federal judge will now be considering whether tactics taken during an FBI raid are grounds to dismiss charges against a Washington, D.C., lawyer allegedly connected to an arms dealing and extortion scheme that stashed thousands of dollars in Panama City Beach, according court records.

Clark Onstad appeared Friday in the U.S. District of Northern Florida courthouse in Panama City to make the case for why the litany of charges against him should be dismissed. He is one of three people — including Amanda Giovanni and Kenneth Cook — indicted on federal charges of conspiring to defraud Middle Eastern governments with promises of an arms deal with the U.S. and extorting a Colorado lawyer with threats of exposing his role in illegal arms deals. Each member of the group faces one count of mail fraud, 13 counts of wire fraud, four counts of extortion, a count of impersonating a U.S. officer and a count of interstate money laundering, court records stated.

A tentative trial date for all three defendants has been scheduled for Oct. 30.

In court Friday, Onstad’s defense counsel, Jean Marie Downing, argued that his portion of the case should be dismissed because FBI investigators violated attorney-client privilege by seizing documents regarding his case. She made the case that the prosecutors’ knowledge of his possible defense disclosed in those documents has tainted the case. Downing acknowledged that dismissing the indictment against her client would be extreme but said it was called for because of the extent to which the FBI allegedly violated his constitutional rights.

“This Court has no other remedy that would protect [Onstad’s] Sixth Amendment rights but to dismiss the indictment against Onstad,” Downing wrote.

U.S. District Judge Robert Hinkle took the prosecution and the defense’s positions under consideration at the conclusion of the hearing. It is unclear when a ruling could be expected.

Prosecutors have accused Giovanni and Onstad of creating a corporation called “BIDS” — Giovanni as the CEO and Onstad as the CFO — to carry out the scheme. It operated from October 2013 through March 2016, storing money at times in Panama City Beach and Pensacola as well as other areas of the country, and Giovanni was allegedly the central character, court records stated.