Facing FBI scrutiny, former Democratic candidate files amended campaign finance report

August 26, 2012

Miami Herald on August 24, 2012 released the following:

“An ex-Democratic candidate whose cam- paign may have had links to Rep. David Rivera filed documents saying he loaned himself $64,000.

BY MARC CAPUTO AND MANNY GARCIA

A failed Democratic congressional candidate whose campaign is under federal grand jury investigation abruptly amended his financial disclosures to show he loaned himself nearly $53,000 more than he originally reported.

Before filing the new report, Justin Lamar Sternad, 35, insisted his finances were in order and steadfastly refused to say how he paid for tens of thousands of dollars worth of campaign-mail services.

Many of the transactions were in cash — sometimes in the form of $100 bills stuffed in envelopes, a campaign vendor said.

The big cash payments drew the attention of the FBI, which began examining the working-class hotel employee, a political unknown who now claims to have dropped about $64,000 of his own money in his Aug. 14 primary loss.

Campaign vendors told The Miami Herald and El Nuevo Herald that Sternad’s congressional Democratic primary run was backed by Republican Rep. David Rivera, who says he has never met or helped Sternad. During the campaign, Sternad bashed Rivera’s main rival, Joe Garcia. Garcia handily won and faces Rivera in November.

Rivera and Sternad have denied working in concert. Rivera has publicly attacked Sternad’s campaign vendors who spoke about his role, calling them liars or Herald lackeys. Sternad has blamed them for his reporting problems.

“I did not previously report this loan because I was unaware of the final monetary obligation incurred by my campaign,” Sternad wrote to the Federal Election Commission, which posted his letter Thursday. “I have now received invoices for the expenditures … and this amendment represents satisfaction of those invoices.”

The filing of an amended report doesn’t mean that law enforcement is done examining his case, say legal experts. They say it’s unlawful to knowingly and willfully file a false federal campaign report — even if it’s amended later.

John Borrero, president of Rapid Mail & Computer Services in Hialeah, told El Nuevo Herald last week that Sternad’s campaign paid about $43,000 in cash for mailings.

Some payments were allegedly made by Ana Alliegro, Sternad’s campaign consultant, totaling at least $7,000, in crisp hundred dollar bills, stuffed in envelopes, several sources familiar with the criminal probe said.

Alliegro, according to the sources, also went to Rapid Mail after the initial Herald story, published on Aug. 16, demanding all records linked to Sternad, ordering employees to throw out everything and finally telling Borrero and his staff “I hope you have a lot of clients.”

Alliegro told The Herald Thursday night that she never paid cash, and that she went to Rapid Mail solely to collect the invoices and documents associated with the Lamar mailings, so he could file his amended financial disclosure.

Borrero said he turned everything over — to law enforcement.

As a result, investigators have ramped up the probe, interviewed witnesses and subpoenaed campaign records. A federal grand jury is now involved.

Kenneth Gross, a Washington-based campaign-finance expert not connected to the case, amending a report may help him “mitigate” criminal exposure. “But it depends on the gravity of the case, the amount involved and the intent,” he said. “Was the report amended of the candidate’s own volition, or were there other pressures at play?”

It’s unclear how Sternad afforded the $64,000 in loans he gave himself.

His financial disclosures show he earned about $30,000 last year from working at local hotels.

Sternad noted he had a trust fund, but reported no income from it this year or the previous year. He reported having a one-third interest in the fund, whose value ranges between $50,000 and $100,000.

Under campaign finance disclosure rules, candidates do not have to provide an exact amount of assets — only a range of value. But they are required to disclose loans in the reporting period in which the money was used. Sternad failed to comply.

Sternad has also had financial troubles in the past. He declared bankruptcy in 1997 and more recently Capital One Bank won a default judgment against Sternad’s wife for $1,746.48 on Jan. 11, records show. There is no record that the judgment has been satisfied.

Sternad’s explanation about needing invoices before he could report his loans and expenditures conflicts with what Borrero, the owner of Rapid Mail and Computer Service, told The Herald.

Borrero said he was paid for all the work, mostly in cash, before the mailings were sent. The amended report notes that the payments totaled $46,973.10. So some, if not all, of the loan should probably have been reported at the time.

Sternad seemed to blame Borrero for the problem, noting in an unusual statement tucked in his amended report that “Vendor refused to provide invoices until 8/17/12. Invoice provided dated 8/8/12. Vendor did not provide detailed postage information.”

The only expense not paid by cash to Rapid Mail came from Expert Printing. Sternad’s latest report shows Expert Printing billed him for a $6,000 expense. That expense was not listed in his previous report.

An owner of Expert Printing declined comment.

Sternad’s latest report and accounting irregularities sharply contrast with the image he portrayed as a fiscal hawk during a May interview with CBS-4’s Elliot Rodriguez.

“I do auditing,” Sternad bragged in talking about his hotel management job, “And I want to get in there [Congress] and cut out some of the fat, some of the pork.”

Questions about Sternad’s finances and ties to Rivera were first raised by Garcia’s campaign in early August after one mailer attacked the Democrat over his divorce. The Garcia campaign noted that Rapid Mail had done more than $100,000 worth of business with Rivera in 2010.

Another firm, Campaign Data, also performed work for Rivera in 2010. Owner Hugh Cochran said Rivera helped the Democrats targeted by Sternad in his sophisticated 11-piece mail campaign.

Rivera has responded to the charges by questioning the honesty of Cochran and Borrero, who say they’re telling the truth.

In his final pre-primary report, Sternad showed he had only $120.97 in the bank. His reports showed no payments to Rapid Mail, Campaign Data or Expert printing. Sternad was repeatedly asked how he could afford the mailers with no money in his campaign, but he refused to answer.

“Kiss my ‘lily-white’ ass,” he said in an Election Day email.

He has since refused comment.

Ironically, Rivera — a Republican lawmaker who’s implicated in the unreported cash-for-mailers scheme — is defending Sternad, a Democratic political newcomer.

Even though the congressman said he doesn’t know Sternad or have any connection to his campaign, Rivera was the first to obtain the new campaign-finance reports for Sternad.

An FEC spokeswoman said Thursday that the FEC’s mailroom had received the reports Tuesday, however they weren’t made public until Thursday. Until that point, they weren’t public record.

Rivera, who will not address specific questions from The Herald, refused to explain Thursday on Spanish-language Radio Mambi how he got the reports. Also, Rivera suggested that Sternad could afford the personal expenses because he has a trust fund.

Rivera accused The Miami Herald and El Nuevo Herald of working in league with Garcia.

“What I know is that nothing that is written in the Miami Herald can be believed,” Rivera said Friday morning on Radio Mambi, dismissing a suggestion by one of the hosts, Oscar Haza, that the Herald story was accurate.

Haza, who also hosts Spanish-language América Tevé’s (Channel 41) A Mano Limpia, interviewed Miami-based Reuters reporter David Adams on his program Wednesday night. Adams said he spoke to the campaign vendors quoted in the Herald and that they told him the same information.”

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Douglas McNabb – McNabb Associates, P.C.’s
Federal Criminal Defense Attorneys Videos:

Federal Crimes – Be Careful

Federal Crimes – Be Proactive

Federal Crimes – Federal Indictment

Federal Crimes – Detention Hearing

Federal Mail Fraud Crimes

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To find additional federal criminal news, please read Federal Criminal Defense Daily.

Douglas McNabb and other members of the U.S. law firm practice and write and/or report extensively on matters involving Federal Criminal Defense, INTERPOL Red Notice Removal, International Extradition Defense, OFAC SDN Sanctions Removal, International Criminal Court Defense, and US Seizure of Non-Resident, Foreign-Owned Assets. Because we have experience dealing with INTERPOL, our firm understands the inter-relationship that INTERPOL’s “Red Notice” brings to this equation.

The author of this blog is Douglas C. McNabb. Please feel free to contact him directly at mcnabb@mcnabbassociates.com or at one of the offices listed above.


Former Council Chairman Kwame R. Brown Pleads Guilty to Bank Fraud and Campaign Finance Violation

June 11, 2012

7thSpace.com on June 9, 2012 released the following:

“WASHINGTON— Kwame R Brown, the former Chairman of the Council of the District of Columbia, pled guilty today to a federal charge of bank fraud and a second criminal charge involving a violation of the District of Columbia’s campaign finance laws.

The guilty pleas were announced by United States Attorney Ronald C Machen Jr; Ronald T Hosko, Special Agent in Charge of the FBI Washington Field Office’s Criminal Division; and Rick A Raven, Special Agent in Charge of the Washington Field Office of the Internal Revenue Service-Criminal Investigation (IRS-CI).

Brown, 41, pled guilty to the bank fraud charge in the United States District Court for the District of Columbia. In a separate proceeding, he pled guilty in the Superior Court of the District of Columbia to the campaign finance violation. As part of the plea agreement, he agreed to submit his immediate resignation from the District of Columbia Council. Brown also has agreed to cooperate as the investigation continues.

The Honorable Richard J Leon scheduled sentencing in the federal case for 11 AM on September 20, 2012.

The Honorable Juliet McKenna scheduled sentencing in the campaign finance case for 2:30 PM on the same date.

The bank fraud charge carries up to 30 years in prison. Under federal sentencing guidelines, the parties have agreed that the applicable range for this offense would be up to six months in prison and a possible fine of up to $5,000. The campaign finance charge carries a maximum of six months of incarceration and a possible fine of up to $5,000.

Brown is the second member of the Council of the District of Columbia to plead guilty to criminal charges this year. In January, in a separate and unrelated case, Harry L Thomas, Jr pled guilty to federal theft and tax charges.

Thomas, who resigned as part of his plea agreement, has since been sentenced to a prison term of 38 months. Thomas was the first sitting member of the DC. Council to be charged with and convicted of a felony.

The charges against Kwame Brown involve two separate matters. In one case, Brown admitted providing false documentation to secure two personal loans, totaling more than $220,000.

In the other, Brown admitted aiding and abetting another individual, a relative, to make a cash payment of $1,500 to a campaign worker for the 2008 council campaign. The relative was a signatory on the campaign’s bank accounts; Brown also admitted failing to disclose the relative’s identity to the District of Columbia Office of Campaign Finance.

“For the second time this year, a member of the DC. Council has pled guilty to a felony offense and been forced to resign,” said United States Attorney Machen. “While sitting on the council, Kwame Brown repeatedly falsified and forged documents to deceive the bank into giving him money, even faxing one of the fraudulent documents from his council office.

Brown also gave a family member free license to make illegal and untraceable cash expenditures from his 2008 campaign in violation of DC. law. The people of the District of Columbia deserve better from their elected officials. Today’s pleas take us one step closer to a culture of integrity and accountability that will not tolerate politicians engaging in dishonesty and self dealing.”

“This week, Mr Brown admitted to forging bank documents and withholding information about his re-election campaign finances,” said Special Agent in Charge Hosko.

“This investigation and today’s guilty pleas demonstrate that the FBI and our law enforcement partners will pursue all allegations of illegal conduct that clouds the judgment of our elected officials and deprives our citizens of the honest government to which they are entitled.”

“No matter what your position, it is unacceptable to submit false information to a financial institution in an effort to secure a loan,” said Special Agent in Charge Raven. “IRS-Criminal Investigation will make every effort to aggressively investigate financial fraud of any kind and not give a free pass to anyone who blatantly fails to comply with the law.”

Brown was elected as an at-large member of the District of Columbia Council in 2004 and took office in January 2005. He was re-elected in 2008, and then, in 2010, he was elected chairman. He took office in that position in January 2011.

According to a statement of offense signed by the government as well as the defendant, Brown submitted false information in securing a $166,000 home equity loan, as well as a $55,335 loan that he used to purchase a boat.

Both loans were issued by Industrial Bank, NA.

In paperwork for the home equity loan, which Brown sent by facsimile from his council office on September 26, 2005, Brown provided a Verification of Employment Form. In it, he falsely wrote that he held the position of “Vice President of Strategy” in an unnamed company; that he earned $3,000 per month; that his probability of continued employment was “great”; that he was projected to earn a $10,000 pay increase on January 3, 2006; and that he was a full-time employee. At the bottom of this form, Brown forged the name and signature of a friend from college who was purportedly the president of the company. In fact, Brown did not have his friend’s permission to sign this form, and his friend was never Brown’s employer.

Brown filed and submitted this form to overstate his annual income in an effort to win approval of his loan application, believing that, without artificially inflating his income, his request would be rejected.

Based on Brown’s purported income, Industrial Bank issued a loan to Brown on October 12, 2005, in the amount of $166,000.

Brown submitted the second loan application on July 25, 2007, this time seeking money for the purpose of purchasing a boat. As part of the application, he submitted an Internal Revenue Service form, purporting to be from a company for which he had worked as a consultant. The form that Brown submitted showed his 2006 income from the company to be $85,000. In fact, Brown’s income from the firm that year totaled $35,000.

Before submitting the form, Brown had altered the “3” on the document to an “8,” so that it appeared he earned $85,000, not $35,000.

As with the 2005 loan, Brown believed that this loan would not be approved without artificially inflating his income. Based on Brown’s purported income, Industrial Bank issued a loan to Brown on August 30, 2007, in the amount of $55,335.

In the campaign finance case, Brown admitted aiding and abetting an unlawful cash campaign expenditure, in excess of the $50 limit imposed on individual cash transactions. According to a statement of offense in that matter, signed by the government as well as the defendant, the “Committee to Re-Elect Kwame Brown” was formed for Brown’s 2008 re-election campaign for the at-large seat on the council.

In or around April 2007, Brown allowed a relative to be a signatory on the committee’s bank account, which was held at Industrial Bank. The relative and the committee’s treasurer jointly opened the account.

In his Statement of Candidacy, filed with the Office of Campaign Finance, Brown listed this account as the committee’s sole bank account. He failed, however, to disclose that his relative was a signatory on the account.

In August 2008, with Brown’s knowledge and permission, the relative opened a second bank account at Industrial Bank, called the “side account,” purportedly to pay for “get-out-the-vote” campaign activities. Brown authorized the relative to make withdrawals on behalf of the committee from the side account. However, he failed to amend his Statement of Candidacy to disclose the existence of the second account.

Later, on or about September 11, 2009, Brown’s relative paid an expense in the amount of $1,500 related to the 2008 re-election campaign, using cash withdrawn from the side account.

This case was investigated by the FBI’s Washington Field Office and the Washington Field Office of IRS-Criminal Investigation.

In announcing the guilty pleas, United States Attorney Machen, Special Agent in Charge Hosko, and Special Agent in Charge Raven commended those who investigated the case for the FBI and IRS-CI.

They also acknowledged the efforts of Assistant United States Attorneys David S Johnson, Maia L Miller, Matt Graves, Ellen Chubin Epstein, and Daniel Butler of the Fraud and Public Corruption Section of the United States Attorney’s Office; Assistant United States Attorney Anthony Saler of the Asset Forfeiture and Money Laundering Section of the United States Attorney’s Office; and Trial Attorney Peter Mason of the Public Integrity Section of the Department of Justice’s Criminal Division, who have prosecuted the case.

Finally, they expressed appreciation to Forensic Accountant Crystal Boodoo; Paralegal Specialists Diane Hayes, Lenisse Edloe, Tasha Harris, Shanna Hays, and Sarah Reis; Legal Assistants Krishawn Graham, Nicole Wattelet, and Christopher Samson; former Legal Assistant Jared Forney; Criminal Investigators Matthew Kutz and Duncan Templeton; Litigation Support Services Specialist Thomas Royal; Information Technology Specialist Kimberly Austin; Victim-Witness Coordinator Dawn Tolson-Hightower; former Student Law Clerks Carl Barnes, Iris Postelnicu, and Danielle Rosborough; and Intelligence Specialist Lawrence Grasso, all of the United States Attorney’s Office for the District of Columbia.

Reported by: FBI”

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Douglas McNabb – McNabb Associates, P.C.’s
Federal Criminal Defense Attorneys Videos:

Federal Crimes – Be Careful

Federal Crimes – Be Proactive

Federal Crimes – Federal Indictment

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To find additional federal criminal news, please read Federal Criminal Defense Daily.

Douglas McNabb and other members of the U.S. law firm practice and write and/or report extensively on matters involving Federal Criminal Defense, INTERPOL Red Notice Removal, International Extradition Defense, OFAC SDN Sanctions Removal, International Criminal Court Defense, and US Seizure of Non-Resident, Foreign-Owned Assets. Because we have experience dealing with INTERPOL, our firm understands the inter-relationship that INTERPOL’s “Red Notice” brings to this equation.

The author of this blog is Douglas C. McNabb. Please feel free to contact him directly at mcnabb@mcnabbassociates.com or at one of the offices listed above.


Nevada Lobbyist Harvey Whittemore Indicted for Allegedly Making Unlawful Campaign Contributions and Lying to Investigators

June 7, 2012

The Federal Bureau of Investigation (FBI) on June 6, 2012 released the following:

“WASHINGTON— Nevada lobbyist and lawyer Harvey Whittemore was indicted today in the District of Nevada by a federal grand jury on charges that he made unlawful campaign contributions to an elected member of Congress, caused false statements to be made to the Federal Election Commission (FEC), and lied to the FBI, announced Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division and Daniel G. Bogden, U.S. Attorney for the District of Nevada.

F. Harvey Whittemore, 55, of Reno, Nevada, was charged with one count of making excessive campaign contributions, one count of making contributions in the name of others, and two counts of making a false statement to a federal agency. If convicted, Whittemore faces up to five years in prison and a $250,000 fine on each count.

“Mr. Whittemore allegedly used his family members and employees as conduits to make illegal contributions to the campaign committee of an elected member of Congress,” said Assistant Attorney General Breuer. “Furthermore, according to today’s indictment, he attempted to conceal his crimes by lying to the FBI. Our campaign finance laws establish maximum limits on individual contributions, and failure to adhere to those rules jeopardizes the integrity of our elections. We will continue to pursue those who engage in such conduct.”

“We remain committed to investigating and prosecuting illegal behavior that jeopardizes the integrity of our elections and corrupts our political process,” said U.S. Attorney Bogden. “Campaign finance laws exist to protect that process and criminal violations of those laws will be vigorously prosecuted by this office.”

Under federal law, it is illegal to contribute to a federal political campaign using a conduit in order to hide the identity of the true contributor. Federal law also sets limits on the amount that an individual can contribute to a campaign. In 2007, the maximum individual contribution was $2,300 for a primary election and $2,300 for a general election; thus, the maximum for one candidate was $4,600.

The indictment states that Whittemore was the chief executive of Company A. On about February 21, 2007, Whittemore allegedly met with an elected member of Congress (identified in the indictment as Federal Elected Official 1) and agreed to try to collect $150,000 in contributions for the elected official’s campaign committee by March 31, 2007, which marked the end of a legally required quarterly reporting period. Aware of the strict limits on individual federal campaign contributions, Whittemore allegedly devised a scheme and plan whereby he used family members, employees of Company A, and their respective spouses as prohibited conduits through which to funnel his own money to the federal elected official’s campaign committee under the guise of lawful campaign contributions. This scheme allowed Whittemore to make an individual campaign donation to the federal elected official in excess of the limits established by federal law. Whittemore allegedly concealed the scheme from the FEC, the elected official, and the elected official’s campaign committee.

In March 2007, Whittemore allegedly solicited the employees, family members, and their respective spouses to make the maximum campaign donations to the federal elected official and reimbursed the contributors with personal checks and wire transfers. The indictment alleges that Whittemore attempted to conceal some of the reimbursements he made to the contributors by telling the employees that they were bonuses. Whittemore also allegedly paid the contributors additional money on top of the reimbursements. If a conduit contributed $4,600, Whittemore reimbursed the individual $5,000; likewise if a couple contributed $9,200, he paid the couple $10,000.

On about March 28, 2007, Whittemore allegedly caused a Company A employee to transmit $138,000 in contributions to the federal elected official’s campaign committee, the vast majority of which were conduit contributions that Whittemore had personally funded in order to satisfy his pledge to the federal elected official. On April 15, 2007, the campaign committee then unknowingly filed false reports with the FEC stating that the conduits had made the contributions, when in fact, Whittemore had made them.

On about February 9, 2012, Whittemore allegedly made false statements during an interview with FBI agents by claiming that he never made a request for campaign contributions; never asked employees of Company A to contribute to the elected official’s campaign; never provided payments to anyone with the expectation that they would serve as reimbursements for campaign contributions; never spoke to any candidate about raising money for the candidate; and never gave money to family members to make political contributions.

The case is being investigated by the FBI and is being prosecuted by First Assistant U.S. Attorney Steven W. Myhre, Assistant U.S. Attorney Sue Fahami, and Trial Attorney Eric G. Olshan of the Public Integrity Section in the Justice Department’s Criminal Division.

An indictment contains only charges and is not evidence of guilt. The defendant is presumed innocent and is entitled to a fair trial at which the government has the burden of proving guilt beyond a reasonable doubt.”

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Douglas McNabb – McNabb Associates, P.C.’s
Federal Criminal Defense Attorneys Videos:

Federal Crimes – Be Careful

Federal Crimes – Be Proactive

Federal Crimes – Federal Indictment

Federal Crimes – Detention Hearing

————————————————————–

To find additional federal criminal news, please read Federal Criminal Defense Daily.

Douglas McNabb and other members of the U.S. law firm practice and write and/or report extensively on matters involving Federal Criminal Defense, INTERPOL Red Notice Removal, International Extradition Defense, OFAC SDN Sanctions Removal, International Criminal Court Defense, and US Seizure of Non-Resident, Foreign-Owned Assets. Because we have experience dealing with INTERPOL, our firm understands the inter-relationship that INTERPOL’s “Red Notice” brings to this equation.

The author of this blog is Douglas C. McNabb. Please feel free to contact him directly at mcnabb@mcnabbassociates.com or at one of the offices listed above.


Prosecutors also have stake in Edwards’ trial verdict

May 22, 2012

Myrtle Beach Online on May 21, 2012 released the following:

“By Anne Blythe

GREENSBORO — John Edwards might be the one with the most to win or lose with the jury deliberating his fate, but the U.S. Department of Justice has a lot riding on his case, too.

When the eight men and four women return to the federal courthouse in downtown Greensboro Tuesday morning, they will begin their third day of deliberations in a case that also has put the Justice Department’s small public-integrity section under scrutiny.

Edwards’ trial came almost four years after the unit’s federal prosecutors bungled a corruption case against Ted Stevens, the U.S. senator from Alaska accused of failing to properly report more than $250,000 in gifts.

Stevens was convicted, , but the verdict was appealed and later vacated after it was revealed prosecutors and FBI agents had conspired to conceal and withhold evidence from the defense.

An investigation was launched into the integrity and professional practices of prosecutors in the public-integrity division. A scathing report from that investigation was released earlier this year, showing that prosecutors had “repeatedly ignored the law” and the ethical standards of their profession.

The Public Integrity Section was set up to root out corruption through the prosecution of elected and appointed public officials at all levels of government.

The section has exclusive jurisdiction over allegations of criminal misconduct on the part of federal judges and also supervises the nationwide investigation and prosecution of election crimes.

New chief for federal unit

Since the Stevens case, the unit has a new chief, former New York-based federal prosecutor Jack Smith. The Justice Department also has ordered training to make sure prosecutors disclose key evidence to defense attorneys.

Attorneys who have attended Edwards’ trial have commented throughout that the prosecution as well as the defense has a lot at stake in the case.

Edwards, a former two-time Democratic presidential candidate and U.S. senator who branched into politics after achieving success as a trial lawyer, was indicted last June on six counts related to violations of campaign-finance laws. The violations allegedly occured during Edwards’ campaign for the 2008 nomination, when two wealthy Edwards’ supporters gave more then $900,000 used to help hide Edwards’ extramarital affair with Rielle Hunter and her pregnancy.

Each of the six counts Edwards faces carries a penalty of up to five years in prison and a $250,000 fine. However, Kieran Shanahan, a former federal prosecutor from Raleigh who sat through the trial, said Edwards – if convicted and unable to successfully appeal – would likely recieve a concurrent sentence and serve no more than five years.

Peter Henning, a law professor at Wayne State University in Detroit and co-author of “The Prosecution and Defense of Public Corruption,” said Monday that a not-guilty verdict would be “a black eye” for the justice department.

“It would call into question their decision even to pursue the case,” Henning added.

But he added that he had seen no surprises from the prosecution, and that ultimately the questions that arise from the trial might be those raised by rulings made outside the jury’s presence by Judge Catherine Eagles, who was appointed to the federal bench in 2010 by President Barack Obama.

Eagles prohibited a former Federal Election Commission chairman from offering his opinion to the jury on whether the money from billionaires Rachel “Bunny” Mellon and Fred Baron would typically be classified as a campaign contribution or gift. Scott Thomas, who had more than 30 years with the FEC, testified while the jury was out of the courtroom that he thought the money that went from Mellon and Baron to other people was used for personal expenses that did not need to be publicly reported or subject to campaign limits.

The jury, during its first two days of deliberations, has asked for many exhibits related to testimony about the $925,000 in checks issued by Mellon in 2007 and 2008.

Though only the 12 people on the jury know what is being discussed behind closed doors, the first two counts on the jury verdict sheet are related to the Mellon money.

Toward the end of the trial, the jurors sounded as if they were a collegial group, laughing and talking as they walked into and out of the jury box.

On Monday, the second day of deliberations, the jurors were quieter and somber-looking, barely looking at prosecutors or Edwards as they waited for the judge to answer questions or release them for lunch or the evening break.

As many await the verdict inside the federal courthouse in downtown Greensboro, national political organizations are seeking answers and raising questions outside the tense atmosphere.

Objections to judge’s instructions

On Monday, the Center for Competitive Politics, a conservative group that promotes the deregulation of U.S. elections, harshly criticized the final juror instructions issued last week in the trial, particularly sections about the definition of “influencing an election.”

“If Edwards goes to prison, we will have an Alice in Wonderland world where conduct that would not be punished by a civil fine can result in jail time,” Allison Hayward, vice president for policy of CCP, said in a prepared statement.

The organization’s spokeswoman pointed to a U.S. Supreme Court case decided in 1976, the landmark Buckley v. Valeo case, which states that under “due process” a person of ordinary intelligence must understand that his actions could be considered illegal.

“There is no legislative history to guide us in determining the scope of the critical phrase ‘for the purpose of … influencing,’ ” Hayward further stated.

“The Supreme Court said the phrase ‘for the purpose of influencing’ is so vague and broad that it cannot be constitutionally applied to define campaign spending.””

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Douglas McNabb – McNabb Associates, P.C.’s
Federal Criminal Defense Attorneys Videos:

Federal Crimes – Be Careful

Federal Crimes – Be Proactive

Federal Crimes – Federal Indictment

————————————————————–

To find additional federal criminal news, please read Federal Criminal Defense Daily.

Douglas McNabb and other members of the U.S. law firm practice and write and/or report extensively on matters involving Federal Criminal Defense, INTERPOL Red Notice Removal, International Extradition Defense, OFAC SDN Sanctions Removal, International Criminal Court Defense, and US Seizure of Non-Resident, Foreign-Owned Assets. Because we have experience dealing with INTERPOL, our firm understands the inter-relationship that INTERPOL’s “Red Notice” brings to this equation.

The author of this blog is Douglas C. McNabb. Please feel free to contact him directly at mcnabb@mcnabbassociates.com or at one of the offices listed above.


John Edwards’ defense team rests

May 16, 2012

CBS News on May 16, 2012 released the following:

“(AP) GREENSBORO, N.C. — John Edwards’ defense team rested Wednesday without calling the two-time Democratic presidential candidate or his one-time mistress to the witness stand, a sign of confidence after presenting little more than two days of testimony and evidence.

The defense had called a series of witnesses aimed at shifting the jury’s focus from the lurid details of a political sex scandal to the legal question of whether the Edwards’ actions violated federal campaign finance laws.

Prosecutors spent nearly three weeks trying to convince a jury that Edwards masterminded a conspiracy to use nearly $1 million secretly provided by two wealthy donors to help hide his pregnant mistress, Rielle Hunter, as he sought the White House in 2008.

Many people watching the case believed Edwards would testify so the jury could hear directly from the former U.S. senator and trial lawyer, who had a reputation for his ability to sway jurors. But putting Edwards on the stand was also a gamble: It would have exposed him to withering cross-examination about his past lies and personal failings.

Most experts were convinced calling Hunter to testify would have dredged up more negatives and lies. The defense also elected not to question Edwards’ oldest daughter, Cate, who has sat behind Edwards nearly every day of the trial and could have helped humanize him.

At one point during the trial, she ran out of the courtroom in tears during testimony about her cancer-stricken mother confronting her father about his extramarital affair.

The judge told jurors that no more witnesses would be called. It’s unclear exactly when closing arguments would start, but most likely Thursday.

Edwards is charged with six criminal counts including conspiracy to violate the Federal Election Campaign Act, accepting contributions that exceeded campaign finance limits, and causing his campaign to file a false financial disclosure report.

He faces up to 30 years in prison and $1.5 million in fines if convicted of all charges.

Edwards has sat quietly at the defense table throughout his trial, whispering with his lawyers and rarely showing reaction to the often emotional testimony from witnesses who were once among his strongest supporters and closest friends. He has made no public statements since October, following a pre-trial hearing where a judge refused to throw out the criminal case against him.

“After all these years, I finally get my day in court and people get to hear my side of this, and what actually happened,” Edwards said last year on the steps of the federal courthouse in Greensboro. “And what I know with complete and absolute certainty is I didn’t violate campaign laws and I never for a second believed I was violating campaign laws.”

At the trial, prosecutors have shown two members of Edwards’ inner circle, campaign finance chairman Fred Baron and once-close aide Andrew Young, engaged in a yearlong cover-up to hide the married presidential candidate’s mistress from the media. Young, who is married, falsely claimed paternity of his boss’ baby and received $725,000 in secret checks from an elderly heiress, using some of the money to care for Hunter.

Baron, a wealthy Texas lawyer, provided Young and Hunter with more than $400,000 in cash, luxury hotels, private jets and a $20,000-a-month rental mansion in Santa Barbara, Calif.

Prosecutors have introduced phone records, voicemails and other evidence showing Edwards was in frequent contact with Baron, Young and Hunter, all while his mistress was in hiding. Former members of Edwards’ campaign also testified that Baron spoke of “moving Hunter around” in the candidate’s presence and that Edwards told his speechwriter he knew “all along” what Baron was up to.

However, in 14 days of testimony, no witness ever said Edwards knew he was violating campaign finance laws, a key element of criminal intent the government must prove to win a conviction.

The defense also undercut the credibility of Young, whom bank records showed siphoned off most of the money from Mellon to build his expansive $1.6 million dream house. Baron wired another $325,000 to the company building Young’s house.

Jurors were also read a stipulation about a sex tape the Youngs had, purportedly showing Edwards and a pregnant Hunter. Jurors were told Andrew Young considered selling the tape, and during his last personal encounter with Edwards on a rural North Carolina road, he told Edwards he had the tape.

The tape had only briefly been mentioned during the trial until Wednesday.

Before his indictment, Edwards rejected a potential plea agreement with federal prosecutors that would have allowed him to serve as little as six months and keep his law license.

A graduate of the University of North Carolina law school, John Edwards made his fortune handling medical malpractice and corporate negligence cases before turning to politics following the death of his 16-year-old son Wade in a 1996 auto accident. Edwards was elected to the U.S. Senate in 1998 and was John Kerry’s running mate in 2004.

Edwards’ wife, Elizabeth, died of cancer in December 2010. He is now a single parent of two school-aged children, ages 13 and 11, who live with their father at the family’s gated estate outside Chapel Hill. Edwards’ 30-year-old daughter Cate is a lawyer who married last year.

After years of denials, Edwards admitted fathering his Hunter’s baby in January 2010, shortly after agreeing to pay child support. The girl, now 4, lives with her mother in Charlotte.”

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Douglas McNabb – McNabb Associates, P.C.’s
Federal Criminal Defense Attorneys Videos:

Federal Crimes – Be Careful

Federal Crimes – Be Proactive

Federal Crimes – Federal Indictment

————————————————————–

To find additional federal criminal news, please read Federal Criminal Defense Daily.

Douglas McNabb and other members of the U.S. law firm practice and write and/or report extensively on matters involving Federal Criminal Defense, INTERPOL Red Notice Removal, International Extradition Defense, OFAC SDN Sanctions Removal, International Criminal Court Defense, and US Seizure of Non-Resident, Foreign-Owned Assets. Because we have experience dealing with INTERPOL, our firm understands the inter-relationship that INTERPOL’s “Red Notice” brings to this equation.

The author of this blog is Douglas C. McNabb. Please feel free to contact him directly at mcnabb@mcnabbassociates.com or at one of the offices listed above.


John Edwards Defense Relies on Definition of ‘The’

May 14, 2012

ABC News on May 14, 2012 released the following:

By JAMES HILL and BETH LOYD

“Not since Bill Clinton challenged the definition of “is” has so much hinged on a very short word.

John Edwards appears to basing much of his defense, which begins today in a North Carolina courtroom, on the legal interpretation of the word “the.”

Edwards has listened to three weeks of testimony meant to prove that he violated federal campaign finance laws by using nearly $1million in donations to hide his mistress Rielle Hunter and her pregnancy during his bid for the 2008 presidential election and in the months after he dropped out — but was still angling to be vice president or attorney general.

If convicted Edwards could be sentenced to 30 years in prison.

The statute governing illegal receipt of campaign contributions “means any gift, subscription, loan, advance, or deposit of money… for the purpose of influencing any election for federal office.”

The words “the purpose” suggests that in order for a conviction, the sole reason for the money would have to be to finance a presidential campaign.

Edwards’ legal team has argued he did not know it might be illegal, did not intend to break the law and that his main reason for hiding Hunter was to keep her secret from his wife, Elizabeth, who was dying of breast cancer.

Prosecutors, however, are arguing the law should be interpreted to mean “a purpose,” meaning use of the donations does not have to be solely for a political campaign.

“It is sufficient under the law if you find that the gift, purchase, or payment was made for, among other purposes, the purpose of influencing any election for federal office,” prosecutors argued in court filings last week.

Edwards’ lawyer Abbe Lowell has argued that prosecutors are asking the jury to “invent a new crime” with its interpretation of the law.

Edwards’ legal team will begin its defense today, which is expected to last a week. He may have a lot to overcome. Prosecutors concluded their case last week by showing an interview Edwards gave to ABC News’ “Nightline” program in which he clearly lied several times, including denying that he had fathered Hunter’s baby.

Judge Catherine Eagles also rejected a motion by Edwards’ team to dismiss the charges against him.

The defense is expected to go after the prosecution’s key witness Andrew Young, a former Edwards’ aide who helped hide Hunter, going on the road with her to keep her away from the press, even claiming paternity for his boss.

Edwards defense has argued that much of the money was solicited by Young and he used the scandal to enrich himself.

Among Edwards’ witnesses will likely be his daughter Cate, who has been his most visible supporter throughout the trial.

Hunter is on Edwards’ list of witnesses, but it’s not clear whether she will be called. Her presence in the courtroom could be volatile.

It’s not yet known whether Edwards will take the stand in his own defense.”

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Douglas McNabb – McNabb Associates, P.C.’s
Federal Criminal Defense Attorneys Videos:

Federal Crimes – Federal Indictment

————————————————————–

To find additional federal criminal news, please read Federal Criminal Defense Daily.

Douglas McNabb and other members of the U.S. law firm practice and write and/or report extensively on matters involving Federal Criminal Defense, INTERPOL Red Notice Removal, International Extradition Defense, OFAC SDN Sanctions Removal, International Criminal Court Defense, and US Seizure of Non-Resident, Foreign-Owned Assets. Because we have experience dealing with INTERPOL, our firm understands the inter-relationship that INTERPOL’s “Red Notice” brings to this equation.

The author of this blog is Douglas C. McNabb. Please feel free to contact him directly at mcnabb@mcnabbassociates.com or at one of the offices listed above.


Latest in Edwards corruption trial: A news guide

May 12, 2012

The Associated Press on May 12, 2012 released the following:

“RALEIGH, N.C. (AP) — A federal judge refused to throw out campaign corruption charges against John Edwards, so the former presidential hopeful will have to present his case to a jury.

Edwards is accused of masterminding a scheme to use nearly $1 million in secret payments to help hide his pregnant mistress as he ran for president. He has pleaded not guilty.

Here is a look at the first weeks of the trial, and some highlights of witness testimony:

Q: WHAT EVIDENCE HAS THE PROSECTUTION PRESENTED SO FAR?

A: Prosecutors showed two members of Edwards’ inner circle, campaign finance chairman Fred Baron and fundraiser Andrew Young, engaged in a yearlong cover-up to hide the married presidential candidate’s pregnant mistress from the media as he ran for the White House in 2008. Young, who is married, falsely claimed paternity of his boss’ baby and received $725,000 in secret checks from an elderly heiress, using some of the money to care for the mistress, Rielle Hunter. A wealthy Texas lawyer, Baron provided Young and Hunter $319,500 in cash, luxury hotels, private jets and a $20,000-a-month rental mansion in Santa Barbara, Calif.

Q: TO WHAT EXTENT HAS THE PROSECUTION SUCCESSFULLY MADE THEIR CASE?

A: After years of Edwards saying he had no knowledge of the cover up, prosecutors introduced phone records, voicemails and other evidence showing he was in frequent contact with Baron, Young and Hunter, all while his mistress was in hiding. Former members of Edwards’ campaign also testified that Baron spoke of “moving Hunter around” in the candidate’s presence and that Edwards told his speechwriter he knew “all along” what Baron was up to. However, in 14 days of testimony no witness ever said Edwards knew he was violating campaign finance laws, a key element of criminal intent the government must prove to win a conviction.

Q: WHAT STRATEGY WILL THE DEFENSE USE?

A: Defense lawyers for Edwards have hammered the credibility of Young, the prosecution’s main cooperating witness, showing he fabricated parts of his 2010 tell-all book about the affair and that he siphoned off much of the secret money to build his family’s dream home. Edwards’ lawyers will also call former members of the Federal Election Commission to testify that the scheme to hide the mistress didn’t actually violate campaign finance laws. It’s unknown whether Edwards, a former trial lawyer, will take the stand in his own defense.

Q: IF CONVICTED, WHAT KIND OF JAIL TIME MIGHT EDWARDS FACE?

A: If convicted on all six counts, Edwards faces a maximum sentence of 30 years in prison and $1.5 million in fines.

Q: WHAT HAVE BEEN SOME OF THE MOST DRAMATIC MOMENTS SO FAR?

A: During emotional testimony that saw Edwards’ 30-year-old daughter flee the courtroom in tears, former campaign advisor Christina Reynolds recounted an October 2007 fight at a Raleigh airport where an enraged Elizabeth Edwards confronted her husband about his affair, ripping open her shirt and baring her chest.

Former aide Andrew Young testified that when Edwards learned Hunter was pregnant, his first reaction was to express doubt he was the father and call his mistress a “crazy slut.”

Young also described his climatic last meeting with Edwards in August 2008 on a secluded road near the former senator’s Chapel Hill mansion. Young said Edwards was nervous and acting so paranoid the aide feared his boss had hired men to shoot him.

SOME OF THE KEY QUOTES IN TESTIMONY:

– “You can’t hurt me, Andrew. You can’t hurt me.” – Edwards’ last words to Young, as recounted by the former aide on the witness stand.

– “He said he could be to poverty what Al Gore was to the environment.” – Young recounting Edwards’ plan to solicit a $50 million donation from heiress Rachel “Bunny” Mellon to establish a foundation to combat poverty after his political career collapsed.

– “I’ve never asked anybody to pay a dime of money, never been told that any money’s been paid. Nothing has been done at my request. So if the allegation is that somehow I participated in the payment of money – that is a lie.” – Edwards in the 2008 interview on ABC’s Nightline that was played for the jury at his criminal trial. Evidence presented by prosecutors showed numerous statements made by Edwards during the interview were lies, including his denial of fathering Hunter’s baby.

– “You don’t see me anymore!” – Elizabeth Edwards yelling at her cheating husband as she exposed her breasts, as recounted by Reynolds.

– “She thought maybe you should probably pay for your girlfriend yourself.” – 101-year-old heiress Bunny Mellon’s reaction upon learning some of the $725,000 she secretly provided to help Edwards went to hide his mistress, as recounted by Charlotte interior designer Bryan Huffman.

– “She thought it was a little low.” – Huffman’s reply after a prosecutor asked if Mellon was aware of a federal law that then limited individual political contributions to $2,300 per election cycle.”

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Douglas McNabb – McNabb Associates, P.C.’s
Federal Criminal Defense Attorneys Videos:

Federal Crimes – Federal Indictment

————————————————————–

To find additional federal criminal news, please read Federal Criminal Defense Daily.

Douglas McNabb and other members of the U.S. law firm practice and write and/or report extensively on matters involving Federal Criminal Defense, INTERPOL Red Notice Removal, International Extradition Defense, OFAC SDN Sanctions Removal, International Criminal Court Defense, and US Seizure of Non-Resident, Foreign-Owned Assets. Because we have experience dealing with INTERPOL, our firm understands the inter-relationship that INTERPOL’s “Red Notice” brings to this equation.

The author of this blog is Douglas C. McNabb. Please feel free to contact him directly at mcnabb@mcnabbassociates.com or at one of the offices listed above.


Federal Prosecutors won’t call Rielle Hunter to testify at John Edwards’ Federal Criminal Trial

May 10, 2012

Boston Herald on May 10, 2012 released the following:

“Prosecutors won’t call Rielle Hunter to testify at John Edwards trial

By Anne Blythe and Martha Quillin / McClatchy Newspapers

GREENSBORO, N.C. — Prosecutors trying John Edwards have called a full cast of witnesses over the past three weeks to talk about $400 haircuts, fancy houses, posh estates, the whirlwind details in a presidential run, back-biting, betrayal and an extramarital affair that sent a one-time political star plummeting to the depths of a criminal trial.

On Wednesday, the day before prosecutors plan to wrap up their evidence, the one witness from the Federal Elections Commission, Patricia Young, an administrator in the Public Disclosure Division, was on the witness stand for not much more than 30 minutes. But prosecutors won’t be calling the woman who set the whole, sordid matter into motion — Edwards’ former mistress, Rielle Hunter.

Prosecutors told Judge Catherine Eagles late Wednesday that they still were on schedule to wrap up their side of the case on Thursday, and Hunter, the woman with whom Edwards had an extramarital affair and a child, was not one of the witnesses they intend to call.

Legal experts said prosecutors apparently will skip Hunter because she didn’t have direct knowledge of the money involved in hiding her and they can’t be certain of what she might say on the stand.

The Edwards case could test the sweep of campaign finance law.

When the government rests, the stage will be set for the first key ruling in the trial. Defense lawyers will likely ask Eagles, who will by then have heard the best evidence against Edwards, to dismiss the case in whole or in part. It is a standard maneuver in a criminal trial, but it may have a greater chance in this case in which the applicability of the law is also at issue.

Defense lawyers have argued that the campaign laws Edwards allegedly broke don’t apply to funds spent for personal reasons, such as the hiding of a mistress. Jurors will be asked to decide not only whether the expenses provided by two wealthy supporters should have been classified as campaign expenses, but whether there was any criminal intent by Edwards in not reporting that on public disclosure forms.

Prosecutors plan to call several federal agents on Thursday, but their case could go to a jury which will have to rule on the intent of key actors in a case that weighs heavily on intent without hearing from two, and possibly three, of the people at the center of the charges.

Prosecutors called the lawyer, librarian, farm manager and grandson of Rachel “Bunny” Mellon, the Virginia philanthropist who issued $725,000 in checks to help Edwards. But Mellon, just thee months shy of her 102nd birthday, was not called to testify.

Fred Baron, the wealthy Texas lawyer, who, prosecutors contend, provided several hundred thousand more dollars toward the effort to hide a pregnant Hunter from the media, died in October 2008. No one other than Edwards’ former aide and his wife, Andrew and Cheri Young, who deposited more than two-thirds of the money in their private bank account, have offered any testimony about Baron’s intent.

And Edwards, a trial lawyer who had much success with juries when he was in the courtroom, might or might not take the stand in his defense.

As prosecutors push toward the close of their case the defense team has offered themes of its own in their cross-examination of witnesses.

They contend that that most of the money prosecutors contend was coverup money say was used to hide Edwards’ pregnant mistress from the public to keep his campaign alive went to Andrew and Cheri the Youngs, key witnesses for the prosecution.

They continue to attack the character and motives of Andrew Young, making the trial as much Edwards versus Young as the government versus Edwards.

And Wednesday, they continued to push with their theory that Young was working closely with the FBI to ensure that an indictment was issued against Edwards. The defense contends he was in close contact with agent Charles Stuber, or “Chuck” as they’ve begun to call him.

The trial so far has offered political theater, psychological drama and wrought emotion from some of the witnesses.

Also on Wednesday, Jennifer Palmieri, a former Edwards’ campaign spokeswoman and friend of Elizabeth Edwards, became emotional while describing her relationship with the former Democratic presidential hopeful’s cancer-stricken wife and her last days.

“She was not able to speak at this stage,” said Palmieri, who now works for the Obama administration.

Shortly before she died, Elizabeth Edwards told Palmieri that she did not want to die alone, that when the time came, “there would not be a man around to love her.”

Palmieri said she would be there and was. So was John Edwards.

As Palmieri testified, Edwards, rubbed his eyes and pressed his forehead against his hand.

Palmieri was under cross-examination by defense lawyer Abbe Lowell after testifying for prosecutors about a rancorous October 2007 Iowa hotel meeting in which Elizabeth Edwards was angry at Baron and his wife Lisa Blue.

The Texas couple had taken Hunter on a shopping trip in California and Elizabeth Edwards was livid that they were continuing to stay in touch with Hunter. keep up with a woman with whom her husband had an extramarital affair. Edwards had told his wife a while back the affair was over and Elizabeth Edwards could not fathom why Baron and Blue were still in communication with her.

“Lisa kept saying, ’You’ve got to hold your friends close and your enemies even closer,’” Palmieri testified.

Palmieri, who has been involved with politics her entire career, offered testimony that played to contentions by prosecutors that Edwards built his campaign on a family-man image and that news of an affair could damage his chances. Therefore, the government argues, efforts to shield his family-man image were in fact campaign expenses.

Palmieri remembered the first National Enquirer story that mentioned the possibility of Edwards being involved in an extramarital affair.

It was months before the publication broke the news about Hunter being pregnant.

Palmieri talked about the efforts to keep the affair story from “jumping to the mainstream media.”

As she tried to help tamp down the story of the affair, Palmieri turned to Edwards and said: “If it’s true, don’t think you’re going to survive this.”

When pushed by prosecutor David Harbach about why she told Edwards that, Palmieri said: “A big part of his appeal was his family and his relationship with Elizabeth.”

Palmieri took the stand after speechwriter Wendy Button finished her testimony.

Button testified on Tuesday that Edwards told her in 2009 that he was aware all along that Baron had provided support to Hunter.

But on cross-examination, defense lawyer Abbe Lowell pointed out that Edwards had not specifically elaborated on what that meant.

Edwards and Button at the time were talking about Quinn, the daughter he had with Hunter. He was upset and very emotional, Button said, that he had lied on an ABC interview nearly 11 months earlier that he was not the father.

Button was helping him prepare a statement that would acknowledge his lie and perhaps clear up other lingering issues.

That statement went through at least 13 renditions, was vetted by lawyers and others, and eventually was not delivered.”

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Douglas McNabb – McNabb Associates, P.C.’s
Federal Criminal Defense Attorneys Videos:

Federal Crimes – Federal Indictment

————————————————————–

To find additional federal criminal news, please read Federal Criminal Defense Daily.

Douglas McNabb and other members of the U.S. law firm practice and write and/or report extensively on matters involving Federal Criminal Defense, INTERPOL Red Notice Removal, International Extradition Defense, OFAC SDN Sanctions Removal, International Criminal Court Defense, and US Seizure of Non-Resident, Foreign-Owned Assets. Because we have experience dealing with INTERPOL, our firm understands the inter-relationship that INTERPOL’s “Red Notice” brings to this equation.

The author of this blog is Douglas C. McNabb. Please feel free to contact him directly at mcnabb@mcnabbassociates.com or at one of the offices listed above.


FBI subpoenas in Whittemore probe aimed to surprise

February 22, 2012

LAS VEGAS REVIEW-JOURNAL on February 20, 2012 released the following:

“BY JEFF GERMAN

The big splash FBI agents made Feb. 9 when they simultaneously served subpoenas across the state in their campaign contribution investigation of power broker Harvey Whittemore was designed to interview witnesses before they had a chance to get their stories straight.

“It’s a fairly obvious law enforcement technique,” said Peter Zeidenberg, a prominent Washington, D.C., defense attorney and former prosecutor with the Justice Department’s Public Integrity Section. “For obvious reasons, you want to talk to everybody before the target of the investigation gets wind of it.”

Kenneth Gross, another Washington defense lawyer experienced in dealing with campaign investigations involving conduit contributors, said agents were trying to catch those subpoenaed by surprise.

“Typically, the people who are used as conduits are not prosecuted,” Gross said. “A lot of times people will talk to the FBI in these initial interviews without seeking counsel first.”

Added Washington defense lawyer Douglas McNabb, who has battled the Justice Department for more than a quarter-century: “This kind of approach would certainly scare the hell out of the conduits. I think the FBI was hoping that at least one of them would say something that’s incriminating.”

About two dozen FBI agents served subpoenas Feb. 9 on Whittemore business associates and employees in some 30 locations in Northern and Southern Nevada.

FBI agents are investigating whether Whittemore funneled tens of thousands of dollars in illegal campaign contributions through his employees and family members to Nevada federal candidates as far back as 2007, sources have told the Las Vegas Review-Journal.

Allegations surfaced in the Whittemore investigation that employees of his former development company, Wingfield Nevada Group Holding Co., and its subsidiaries contributed to the campaigns and were reimbursed by Whittemore with company money the same day or the next day.

The FBI views conduit contributions as a way to skirt federal campaign finance laws that put ceilings on how much individuals can contribute to candidates.

Nevada U.S. Attorney Daniel Bogden declined to comment on the Whittemore investigation.

But he added, “I don’t believe we have previously charged anyone in the District of Nevada with such an offense.”

In recent years, Whittemore, an attorney and longtime influential lobbyist with many friends in Nevada’s political hierarchy, had turned his attention to land development.

In 2007, Whittemore, who considered U.S. Sen. Harry Reid, D-Nev., among his closest friends, was orchestrating the development of Coyote Springs, a master-planned community in Southern Nevada. With the help of Reid and other members of the Nevada congressional delegation, Whittemore sought to overcome several governmental hurdles because of county water issues and federal land issues.

But in 2008, the 43,000-acre development stalled because of the housing crash and economic recession.

The FBI’s carefully planned operation on Feb. 9 took into consideration that the subjects of the investigation were a close-knit group.

Zeidenberg — who helped prosecute and convict I. Lewis “Scooter” Libby, a top aide to former Vice President Dick Cheney, in the CIA leak investigation in Washington — said serving subpoenas simultaneously in cases like this catches accomplices with their guard down.

“They’re not thinking about what they’re going to say whenever they’re asked about the money,” he said.

One of the goals of the FBI’s strategy was to get the lower-level people in the scheme, the conduits, to cooperate.

“From investigators’ point of view, serving a number of subpoenas on the same day or around the same time has shock value that may induce cooperation in witnesses that can deliver a bigger target for investigators,” said Paul Padda, a former federal prosecutor who helped maintain the integrity of elections for the Nevada U.S. attorney’s office.

Christopher Blakesley, a University of Nevada, Las Vegas professor who specializes in criminal law, said most people would be “worried” about not cooperating with FBI agents if served with a subpoena under those conditions.

“My guess is that’s the reason why the FBI took that approach,” he said.

Padda and other legal experts said there is a strong chance that some people decided on the spot to cooperate with FBI agents.

The subpoenas seek documents related to campaign contributions they made and copies of checks to and from the politically connected lobbyist.

The requested records date to January 2007, and those subpoenaed have been instructed to bring them to a federal grand jury convening Feb. 29 in Reno.

Contributions made on one date — March 31, 2007 — to Reid’s re-election campaign have attracted the interest of FBI agents, sources have said.

On that day, the Senate majority leader’s campaign received at least $133,400 from 29 Whittemore associates, including his family members and his employees and their spouses, most of whom each contributed the maximum allowed $4,600, according to federal campaign reports.

The number has ballooned from the original $115,000 figure the Review-Journal reported, as more associates and family members have been identified in the campaign reports.

Harvey Whittemore and his wife, Annette, also contributed $9,200 on March 31, 2007, bringing the total monies bundled by Whittemore to at least $142,600. Their contributions, however, are not likely to be considered conduit contributions.

Gross, former head of enforcement for the Federal Elections Commission in Washington, said he has never seen that amount of money bundled all at once in a federal race. “I can’t recall another situation where that much came in on a (single) day,” he said.

In June 2008, a federal jury acquitted Michigan attorney Geoffrey Fieger and his law partner, Ven Johnson, of making more than $113,000 in conduit contributions through employees and relatives of the employees to the 2004 Democratic presidential campaign of John Edwards.

Those contributions were spread out over a period of time. Fieger, a former Michigan gubernatorial candidate, was known for representing the late advocate of assisted suicide, Jack Kevorkian.

Prominent Los Angeles attorney Pierce O’Donnell pleaded guilty in August to two misdemeanor counts of making illegal campaign contributions to the Edwards campaign. Federal prosecutors had charged him in 2008 with three felony counts of reimbursing $26,000 to 13 of his firm’s employees and other people who had contributed to the Edwards campaign.

In November, a federal judge rejected O’Donnell’s plea deal, saying the proposed six-month sentence behind bars O’Donnell agreed to serve was too harsh.

“These cases get exciting to journalists and sometimes the public because there are politicians associated with them,” said Zeidenberg, who has been involved in conduit contribution investigations as both a prosecutor and a defense lawyer. “But that doesn’t mean the politician or public office is in any way connected to the improper activity.

“There’s no reason generally, unless proven otherwise, to think the public official would have any knowledge or awareness that this was going on.”

On the surface, the Whittemore investigation is being handled by the Nevada U.S. attorney’s office. First Assistant U.S. Attorney Steven Myhre, the Las Vegas-based No. 2 man in the office, is listed on the Feb. 9 subpoenas ordering the contributors to bring records to the Reno grand jury. Myhre requested checks to and from Whittemore, as well as documents related to campaign contributions dating to Jan. 2007.

Zeidenberg said it’s likely the Public Integrity Section, which handles public corruption investigations for the Justice Department, also has been consulted. Justice Department guidelines require it.

A former Las Vegas federal prosecutor who is now a defense attorney said the FBI’s massive coordinated effort on Feb. 9 was a sure sign that it considers the investigation serious.

“Something like that is a commitment of resources,” the former prosecutor said. “It means it’s a high-profile investigation.””

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Douglas McNabb – McNabb Associates, P.C.’s
Federal Criminal Defense Attorneys Videos:

Federal Crimes – Be Careful

Federal Crimes – Be Proactive

Federal Crimes – Federal Indictment

Federal Crimes – Detention Hearing

Federal Mail Fraud Crimes

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To find additional federal criminal news, please read Federal Crimes Watch Daily.

Douglas McNabb and other members of the U.S. law firm practice and write and/or report extensively on matters involving Federal Criminal Defense, INTERPOL Red Notice Removal, International Extradition and OFAC SDN Sanctions Removal.

The author of this blog is Douglas McNabb. Please feel free to contact him directly at mcnabb@mcnabbassociates.com or at one of the offices listed above.


John Edwards has life-threatening medical condition, judge says

January 13, 2012

Politico on January 13, 2012 released the following:

“By MACKENZIE WEINGER

John Edwards has a life-threatening heart condition that requires surgery and his trial has been delayed, according to reports Friday.

In Greensboro, N.C., U.S. District Judge Catherine Eagles revealed that two cardiologists wrote to her that the former presidential contender and senator has a medical procedure scheduled next month and starting his trial on Jan. 30 would “reduce the chance for success,” WRAL reported. The doctors said Edwards is currently on medication for the heart condition, the details of which weren’t discussed.

His attorneys wanted Edwards to have a 60-day extension to his case. Eagles said the earliest the trial could begin was March 26, according to WRAL.

Eagles held a brief closed-door meeting Friday before granting the delay request, saying “real and serious health issues” were on the line, WRAL reported.

Court documents about Edwards medical condition have been sealed.

Edwards is accused of conspiring to violate campaign finance laws and using about $1 million dollars from campaign donors to cover up his affair and child with Rielle Hunter.

He is facing a series of charges related to his alleged involvement in a scheme in which two of his political supporters paid about $925,000 of Hunter’s expenses. At the time, she was pregnant with Edwards’s child.”

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Douglas McNabb – McNabb Associates, P.C.’s
Federal Criminal Defense Attorneys Videos:

Federal Crimes – Federal Indictment

————————————————————–

To find additional federal criminal news, please read Federal Crimes Watch Daily.

Douglas McNabb and other members of the U.S. law firm practice and write and/or report extensively on matters involving Federal Criminal Defense, INTERPOL Red Notice Removal, International Extradition and OFAC SDN Sanctions Removal.

The author of this blog is Douglas McNabb. Please feel free to contact him directly at mcnabb@mcnabbassociates.com or at one of the offices listed above.