Judge Threatens Houston Developer With Jail For Not Complying With DOJ Subpoena

Houston real estate developer Ali Choudhri has been threatened by a federal judge with imprisonment and monetary sanctions after months of efforts to get the Jetall Cos. CEO to turn over emails related to a federal investigation into potential financial crimes.

Choudhri, who is also fighting legal battles on properties once in his control, is the subject of an investigation into potential Financial Institutions Reform, Recovery and Enforcement Act violations, according to court records.

Attorneys haven't said what that investigation is looking into. But the Department of Justice has been seeking email records from the businessman as part of their inquiry since April 2022, first suing Choudhri and Jetall Cos. in September 2023 to force compliance with investigative subpoenas, court records show.

Choudhri has since failed to produce the requested documents in a usable format, prompting U.S. District Judge Lee Rosenthal to issue several dire warnings of punishment for contempt over a series of hearings that began March 28. 

Rosenthal said late last month that if documents weren't produced by a Friday hearing, she would begin fining Choudhri $1K a day. When they weren't produced by Friday's deadline, the judge escalated, demanding that Choudhri appear in person Monday and bring either the documents or a “proverbial toothbrush,” suggesting that he and his attorneys should be prepared to spend time behind bars.

“I am now convinced that we are not worrying about a technology problem, we’re worrying about a failure of will,” Rosenthal said Friday.

At the Monday hearing, Rosenthal granted a new attorney added to Choudhri's defense team a few extra days to turn over the emails. While she didn't impose financial sanctions or have anyone arrested, those options remain on the table. 

The DOJ is seeking emails related to certain transactions as part of the investigation, Anthony Gill, a trial attorney with the fraud section of the DOJ’s civil division, said during court hearings.

Choudhri’s lawyers have said at several appearances that they ran into technical challenges when trying to turn over email records in a format compliant with the subpoena. Late last month, they instead offered a 9,000-page, unsearchable PDF document with no indication of where one email ends and another begins, according to Gill and court documents.

At Monday’s hearing, Choudhri was granted a temporary reprieve to give newly appointed attorney Mark Bennett time to produce the information. While a file of Jetall Capital’s emails were turned over Sunday, the oldest email in that file is from March of this year, Gill said in court. 

Bennett told Rosenthal he had only been able to complete Google email processing for correspondence to and from a Jetall Capital address and that other requested emails are in a Jetall Cos. inbox that Google is still processing. That could take days, he said, and Rosenthal set another hearing for a status update on Wednesday.

Bennett also turned over a hard drive with the contents of two other email inboxes during Monday’s hearing, adding he wants to show good faith and swiftly get his client into compliance with court orders. 

Rosenthal's agreement to extend the production deadline to at least Wednesday is the third extension for Choudhri within two weeks. 

Gill expressed “continued frustration” with the case, noting in court that Bennett could be dropped from the case like other Choudhri attorneys before him. Bennett signed on to the case Sunday and is the fifth attorney to be listed as Choudhri’s counsel in the matter, according to court records.

“Unfortunately, we’re leaving the courthouse again without full production of these documents,” Gill said during Monday morning's hearing. 

Gill added that Choudhri has repeatedly responded to the DOJ’s subpoenas and federal court orders with excuses or incomplete productions of the emails, often in overly complicated formats that make it difficult for investigators to read and search them.

On Friday, Rosenthal urged Choudhri and his legal team to comply expeditiously or face consequences.

“This could be one of those cases in which the attempt to resist or cover up any kind of transaction that is of interest to the government … is going to be a whole lot worse than providing the documents in the first place,” Rosenthal said. 

Choudhri has been involved in a laundry list of litigation in recent years, including losing possession of a Galleria-area office building through a federal court-ordered bankruptcy sale last year. That was followed by accusations of Choudhri refusing to vacate a suite in the building.  

Other litigants have also complained of Choudhri's delay tactics in court. A Bisnow review in 2023 found that Choudhri has been involved in more than 100 lawsuits throughout different courts.