Public Corruption Prosecutions in the U.S. – An Overview of Cases Involving Forfeiture and...
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![Page 1: Public Corruption Prosecutions in the U.S. – An Overview of Cases Involving Forfeiture and Restitution Issues.](https://reader034.fdocuments.us/reader034/viewer/2022042717/56649cba5503460f9498166d/html5/thumbnails/1.jpg)
Public Corruption Prosecutions in the U.S. – An Overview of Cases
Involving Forfeiture and Restitution Issues
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U.S. federal prosecutors prosecute crimes by gov’t officials at all levels• Local officials like mayors and city or
county commissioners and state prosecutors and police officers
• State officials like governors, members of state legislatures, state officials like election officials and cabinet officials like tax officials and state police officers
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• Federal officials– Federal judicial corruption– U.S. Congressmen and Senators or staff
members – Federal contracting officers– Intelligence officials– Cabinet Secretaries– State Department officials involved in
immigration visas
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Statutes Used to Prosecute Official Corruption
• Bribery and honest services fraud• Money laundering• Conspiracy to commit federal crimes• RICO – federal and state law predicates• Income tax evasion and false returns• False statements and omissions and False
disclosures– Financial Disclosure statements– Campaign reports– False statements to investigators and to congress
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Importance of Restitution and Forfeiture Tools
• Disgorge profits
• Deter
• Punish
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For most corruption cases, the things of value given are small
• Trips--foreign and domestic• Expensive watches• Free home improvements • Golf, meals and entertainment• Cash –
– direct payments – payments of mortgages and bills and sales at inflated values – payments to trusted courthouse employees– jobs for family members and friends
• Lobbyists contracts for family and friends• “event coordinators” or public relations businesses
– “consulting fees” for gov’t officials allowed to have outside income
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• Judicial corruption– Typically numerous small bribes
• Local police – Typically numerous small bribes or – Excessive force or other civil rights violations– Sexual misconduct
• Mayors and City officials– Typically small cash payments, improvements
to houses, “little show” jobs
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• Federal judges, prosecutors or cabinet or agency officials– Relatively rare– False disclosures or conflicts of interest– Voucher fraud
• Other Federal officials – Contracting officers –
• future employment or family members employment• Sometimes cash or having bills paid directly
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Exceptions
• Jack Abramoff and Michael Scanlon• U.S. Congressman Randy “Duke”
Cunningham • U.S. gov’t officials in Iraq involved in Iraq
reconstruction contracts• Some officials who sell national security
information • Narcotics-related corruption –
– Criminal Law and immigration enforcement officers
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Who investigates? Who prosecutes?
• By Department of Justice policy, Trial Attorneys who report to the Attorney General and the investigative agencies
• By Department of Justice policy, Special Counsel appointed by the Attorney General and the investigative agencies
• By statute, independent counsel appointed by the Court and the investigative agencies
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Jack Abramoff
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Jack Abramoff
• Following guilty plea of business partner Michael Scanlon, pleaded guilty in Washington, D.C. in Jan 2006 to – conspiracy to commit
• Honest services fraud and bribery • Defrauding clients by mail and wires (phones and emails)• Concealment
– Defrauding clients• Failing to disclose that he would recent 50 percent of profits of
company he recommended to his clients to provide “grass roots services”
– Tax evasion • Unreported income and• Improper deductions
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Jack Abramoff
• Also pled guilty in Jan. 2006 in federal court in Miami, FL to bank fraud involving purchase of Sun Cruz Casino
• Sentenced in March 2006 to 60 months in prison • Ordered to pay $19 million in restitution to the
banks• Surrender date continued while he cooperates
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• On charges pending in Washington, D.C. faces – prison of up to 91/2 to 11 years which will
likely be served concurrently;– restitution payments to his clients of
$25 million;– restitution to IRS of approx. $1.8 Million
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• How can the gov’t recover the $47 million from Abramoff?– Joint and several liability with co-conspirators– Non-dischargeable in bankruptcy– Can be collected at any time in his lifetime
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Restitution
• For defrauding his clients - will be treated as restitution to client - victims who were defrauded administered by the court and probation
• For his corruption crimes – not ordered but not likely to be large as to any individual recipient
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Effects of Abramoff and Scanlon Guilty Pleas so far
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• On-going criminal investigations– March 2006 Guilty Plea of Tony Rudy, former lobbyist
and Deputy chief of staff of House Majority Whip Tom DeLay
– U.S. V. Safavian, USDC
• Voluntary return of campaign contributions from Abramoff
• Amended FEC filings to report in-kind contributions and reimbursement of expenses for use of Abramoff’s luxury sports boxes for fundraisers
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Cong. Randy “Duke” Cunningham from California
– $2.43 million from 3 business operators seeking defense department contracts
• Huge profits on a house and a boat, a Rolls Royce, rugs, furniture, cash, meals, travel expenses, and more
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Cunningham Forfeiture
• As part of his plea agreement– Pleaded guilty to tax evasion and bribery
conspiracy – Agreed to cooperate in other corruption
investigations and investigations of people he admitted publicly bribed him
– Agreed to forfeit certain assets which are being sold
• public auctions or • public sales
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• Was sentenced in March 2006 to 8 years and 4 months – prosecutors asked for 10 years– Defense argued prior war service, alcoholism
and depression
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Developments in the on-going Cunningham investigation so far
• Mitch Wade, one of the bribe payers, has plead guilty to bribery and is cooperating with federal prosecutors in Washington, D.C.