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

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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.


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.


Prosecutor Who Ran Ethics Unit Leaves Justice Department

April 17, 2012

The New York Times on April 17, 2012 released the following:

“By CHARLIE SAVAGE

WASHINGTON — The Justice Department on Monday announced the departure of a high-profile prosecutor who ran its ethics unit during the botched case against Senator Ted Stevens and has since played a prominent role in the Obama administration’s efforts to prosecute officials for leaking information to the press.

The departure of the prosecutor, William M. Welch II, was disclosed in a motion before a federal appeals court in Richmond, Va. The department informed the court that he would no longer represent the government in the case against Jeffrey Sterling, a former Central Intelligence Agency official who is accused of leaking information to James Risen, an author and a reporter for The New York Times.

“Mr. Welch is leaving the Department of Justice for a job in the private sector,” the motion said, but it did not give details.

Another department official confirmed that Mr. Welch had retired, saying that his last day was Friday, and that he was taking a job in the Boston area. A law firm that represented him during the fallout from the Stevens case also confirmed that he had left the Justice Department. NPR first reported Mr. Welch’s departure on Monday.

A hard-charging prosecutor, Mr. Welch got his start in 1989 in the Justice Department’s tax division and later worked as an assistant United States attorney in Nevada and in Massachusetts. In August 2007, he was made acting deputy chief of the public integrity section at Justice Department headquarters, and the following March became its chief.

In that position, he oversaw the trial team that won a conviction against Mr. Stevens in October 2008 for failing to report gifts from an oil-services firm. But the conviction was withdrawn and the case collapsed after it emerged that prosecutors had failed to turn over information to the defense that could have helped Mr. Stevens, an Alaskan Republican who lost re-election in November 2008 and later died in a plane crash.

The federal judge overseeing the case held Mr. Welch and other prosecutors involved in the case in contempt of court, and the judge and the Justice Department opened investigations. Last month, however, the judge made public the results of his investigation, and the findings largely exonerated Mr. Welch.

Specifically, the report found that Mr. Welch had been cut out of direct supervision of the trial team because his superiors in the criminal division had taken a strong interest in the case and so he had focused on other cases. It also found that “to his credit, on each occasion” when disclosure issues were brought to Mr. Welch for a decision, he directed prosecutors to provide the information to the defense.

Back in 2009, Mr. Welch was replaced as head of the public integrity section. In October of that year, he returned to the United States attorney’s office in Massachusetts but continued to work for the criminal division, whose new head, Lanny A. Breuer, asked him to take up several largely dormant leak investigations left over from the Bush administration years.

One of those cases was against Thomas Drake, a former National Security Agency official whom Mr. Welch eventually prosecuted in connection with leaks to The Baltimore Sun about enormous waste and mismanagement within the agency.

Mr. Welch initially sought conviction on charges that could have put Mr. Drake in prison for 35 years, winning an indictment in April 2010. But the case against Mr. Drake largely collapsed amid a dispute over what classified evidence prosecutors could use.

Mr. Drake pleaded guilty to a single misdemeanor charge and received a year of probation, while all the major charges were dropped and he avoided prison time. When the judge overseeing the case accepted the deal in July, he called the government’s handling of the case — putting Mr. Drake through “four years of hell” and devastating him financially, only to drop the major charges on the eve of trial — “unconscionable.”

Mr. Welch also helped revive an investigation against Mr. Sterling, who is accused of providing information about what was portrayed in Mr. Risen’s 2006 book, “State of War,” as a botched effort to sabotage Iranian nuclear research in 2000. Mr. Sterling was indicted in December 2010.

That case, too, is in trouble. Mr. Welch had been seeking to compel Mr. Risen to testify against Mr. Sterling, but Mr. Risen’s lawyers invoked the First Amendment and said he would not testify about any confidential sources. A district court judge ruled in favor of Mr. Risen. In appealing that ruling, prosecutors told the appeals court that if the ruling stands, it “effectively terminated the prosecution” of Mr. Sterling.”

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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 and OFAC SDN Sanctions Removal.

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 probes alleged gambling houses in Jefferson County

March 20, 2012

ENewsCourier.com on March 19, 2012 released the following:

“Associated Press

MONTGOMERY, Ala. (AP) — The FBI’s gambling corruption investigation in Montgomery wasn’t the only one going on at the same time in Alabama.

The FBI was recording phone calls and meetings in Jefferson County a few months after it did the same thing in Montgomery. Court records show one Jefferson County businessman has agreed to plead guilty and several other people are under investigation over electronic bingo machines installed in the small town of Kimberly, 20 miles north of Birmingham.

Kimberly Mayor Craig Harris said Monday he initiated the investigation and is glad he can finally talk about his role. He worked as an informant who let the FBI record his phone calls and meetings, including ones where he received cash payoffs from gambling operators in return for police protection.

“There wasn’t any fear behind it because I was doing the right thing from the start,” the 38-year-old mayor said.

But he said he regretted he couldn’t be straightforward with constituents in the town of 1,800 when they called to complain about him doing nothing about the illegal operations.

“There were several calls about, ‘Why aren’t you doing anything?'” he said.

The Kimberly investigation and the Montgomery investigation were both run out of Washington by the Justice Department’s Public Integrity Section. But they differed dramatically in size. One involved thousands of machines and millions in offers. The other involved dozens of machines and thousands in payoffs.

Justice Department spokesman Laura Sweeney said Monday she could not comment about the ongoing investigation in Jefferson County.

The Montgomery case involved two huge electronic bingo casinos in Dothan and Shorter. The Dothan operator, his two lobbyists and a former legislator pleaded guilty and will be sentenced in July and August. The operator, Ronnie Gilley, admitted offering millions in bribes to get votes for pro-gambling legislation in 2010.

The operation in Jefferson County involved at least four houses in and around Kimberly that had eight to 10 electronic bingo machines each and operated 24 hours a day as makeshift gambling halls, the mayor said.

He said one of the operators approached him on a Saturday in 2010 with an offer of about $150 a week to keep the Kimberly police away and provide notice if there was going to be a crackdown. He contacted the state attorney general’s office on Monday morning to report the offer and was meeting the next day with representatives of the attorney general and FBI to set up the undercover operation.

He said he started collecting $150 weekly payments for one gambling business and then added others, eventually collecting several thousand dollars while the FBI recorded the payoffs in late 2010 and early 2011. The mayor said he handed over all the money to the FBI each week.

Federal court records filed late last week show that Daniel “Boone” Stone of Morris has agreed to plead guilty Thursday to one count of conspiracy to commit bribery and operating an illegal gambling business. In return for his cooperation, federal prosecutors agreed to recommend a prison sentence of six to 12 months and a fine of $2,000 to $20,000.

Stone’s attorney, Scott Morro, said his client played a minor role in the case and wanted to put it behind him by reaching a plea deal.

“I guess my guy is a Gilley,” he said, referring to the casino developer who pleaded guilty in Montgomery and helped prosecutors.

Morro said federal prosecutors told him they had built a case on taped recordings, but he had not heard them.

Court documents filed in his case describe at least five others involved in the gambling businesses, and one of the houses they used was owned by Stone’s father. The father was not named, and Morro said he hopes the father will remain out of the case.

The court papers say the machines came from a convenience store owner in Gardendale and a club owner from Warrior, but they are not identified by name.

The mayor said sheriff’s deputies raided the gambling hall that was in the Stone home in 2011, and the others closed voluntarily. He said he knew Daniel Stone because he was part-owner of an IGA grocery store in Kimberly that has since closed, and the other alleged co-conspirators were friends or acquaintances who lived in the area. He said he can’t identify them because the investigation is ongoing.

This is not the first time Kimberly has had a gambling issue. In May 2008, police seized 189 gambling machines, valued at more than $1 million, from a warehouse. They destroyed them in 2011 after winning a three-year legal battle with the owner.”

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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 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 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 R. Brock, Former Department of Defense (DoD) Employee, Pleads Guilty to Submitting False Travel Claims Totaling Nearly $500,000 in U.S. District Court for the District of Columbia

October 13, 2011

The Federal Bureau of Investigation (FBI) on October 13, 2011 released the following:

“WASHINGTON— A former civilian employee of the Armed Forces Institute of Pathology (AFIP), a component of the Department of Defense, pled guilty today in Washington, D.C., to making more than $485,000 in false travel claims using the Defense Travel System, announced Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division.

John R. Brock, 52, of Crofton, Md., pled guilty today before U.S. District Court Judge Robert L. Wilkins in U.S. District Court for the District of Columbia to a criminal information charging him with one count of making a false claim against the United States. According to court documents, Brock worked as a budget analyst within the Resources Management Department of the AFIP from 2007 through 2011. As part of his guilty plea Brock admitted that, from September 2008 through April 2011, he submitted 99 false travel vouchers totaling $485,535 for expenses that were never incurred. He admitted that he submitted the claims through the Defense Travel System using the profile of a former AFIP employee.

At sentencing, scheduled for Jan. 3, 2012, Brock faces up to five years in prison and a $250,000 fine, as well as supervised release following any prison term. Brock is also subject to criminal forfeiture totaling $485,535.

This case is being prosecuted by Trial Attorney Richard B. Evans of the Criminal Division’s Public Integrity Section, and is being investigated by the U.S. Army Criminal Investigation Command, the Defense Criminal Investigative Service and the FBI’s Washington Field Office.”

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.


Florida Couple and Utah Man Indicted for Alleged Roles in Procurement Fraud Scheme Involving Foreign Military Materials

October 13, 2011

The Department of Justice (DOJ) on October 12, 2011 released the following:

“WASHINGTON — Three individuals were charged in an indictment returned today by a federal grand jury in Utah for their alleged roles in a bribery and fraud scheme involving federal procurement contracts, announced Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division and U.S. Attorney David B. Barlow for the District of Utah.

The four-count indictment returned today in U.S. District Court in Salt Lake City charges Sylvester Zugrav, 68, and Maria Zugrav, 66, both of Sarasota, Fla., and Jose Mendez, 49, of Farr West, Utah, with conspiracy to commit bribery and procurement fraud. The Zugravs and Mendez also are each charged with bribery. In addition, Mendez is charged with procurement fraud.

According to the indictment, Mendez worked as a program manager for the U.S. Air Force Foreign Materials Acquisition Support Office (FMASO). The mission of FMASO is to purchase foreign military materials on behalf of their customers, which are various U.S. military divisions. The materials are acquired outside of the United States by third party companies, or vendors, and then purchased by FMASO on behalf of its customers. There are a limited number of vendors permitted to contract for the sale of foreign materials to FMASO, one of which is Atlas International Trading Corporation (Atlas). According to the indictment, Sylvester and Maria Zugrav were the principals of Atlas.

According to the indictment, the Zugravs and Mendez conspired to enrich one another by exchanging money and other things of value for non-public information and favorable treatment in the procurement process. The Zugravs allegedly offered Mendez approximately $1,240,500 in payments and other things of value throughout the course of the conspiracy. The Zugravs allegedly made bribe payments to Mendez in three different ways: cash payments via FedEx to Mendez’s home address; in-person payments of cash and other things of value; and electronic wire transfers to a bank account in Mexico opened by and in the name of Mendez’s cousin. According to the indictment, from approximately 2008 to August 2011, the Zugravs gave Mendez and a person close to him more than $185,000 in payments and other things of value, with promises of additional bribe payments if Atlas were to receive future contracts for the sale of foreign materials to FMASO customers.

In return for the bribes offered and paid, Mendez allegedly gave Atlas and the Zugravs favorable treatment during the FMASO procurement process, including disclosing government budget and competitor bid information, which helped Atlas and the Zugravs in winning FMASO contracts.

According to the indictment, Mendez and Sylvester Zugrav allegedly communicated offers and requests for bribes in person and through email, and took steps to conceal their activity, using covert email addresses, password-protected computer documents, code words and false names. Within the encrypted documents, Mendez adopted the name “Chuco” and Sylvester Zugrav used the name “Jugo,” and they referred to cash as “literature.”

The Zugravs and Mendez each are charged with one count of conspiracy to commit bribery and procurement fraud, and one count of bribery. Mendez is also charged with one count of procurement fraud for disclosing non-public information to a separate FMASO vendor other than Atlas.

The maximum penalty for conspiracy is five years in prison and a $250,000 fine. The maximum penalty for procurement fraud is five years in prison and a $250,000 fine, while the maximum penalty for bribery is 15 years in prison and a $250,000 fine, or three times the monetary equivalent of the thing of value, whichever is greater. The indictment also seeks forfeiture from all three defendants, if convicted.

An indictment is merely an allegation and defendants are presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.

The case is being investigated by the FBI and the Air Force Office of Special Investigations, Office of Special Projects. The case is being prosecuted by Trial Attorneys Marquest J. Meeks and Edward P. Sullivan of the Criminal Division’s Public Integrity Section, and Assistant U.S. Attorney Carlos A. Esqueda for the District of Utah.”

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