Friday, June 6, 2008

Congressman's Relatives Charged in 31 Count Indictment to Defraud Charities

  Three relatives of embattled U.S. Representative William Jefferson (D. La.) (shown above) were indicted yesterday in a 31 count indictment, according to the New Orleans Times Picayune.  According to a U.S. Attorney press release issued June 4, 2008:

BETTY JEFFERSON, age 70, an elected tax assessor in New Orleans, along with BETTY JEFFERSON'S brother, MOSE JEFFERSON, age 66, and her daughter, ANGELA COLEMAN, age 53, all residents of New Orleans, Louisiana, were charged via a 31 count-indictment by a Federal Grand Jury today with conspiracy to commit mail fraud; and federal program fraud; aggravated identity theft; substantive program fraud; and mail fraud, and conspiracy to commit money laundering, announced U. S. Attorney Jim Letten. Additionally, BETTY JEFFERSON was charged with four counts of tax evasion and MOSE JEFFERSON was charged with three counts of making false statements to federal investigators.

The indictment alleges that these defendants controlled numerous specified for-profit and non-profit companies, thereby obtaining control over federal and state grant funds for these non-profit companies by applying for charitable and educational grants designed to assist needy, at-risk and disadvantaged youth and other individuals in need of assistance. According to the indictment, the defendants would and did write checks out of the non-profit bank accounts payable to individuals who did not work for the grant programs, thereafter depositing those checks into their (the defendants) own personal checking accounts, or otherwise using the funds to pay for their personal expenses.

It is also alleged that the defendants funneled federal and state grant funds to themselves by writing checks on the non-profits' bank accounts, thereby transferring monies into their companies in false attempts to create the illusion that the payments were for legitimate business purposes.

Additionally, the indictment charges that MOSE JEFFERSON used grant funds to pay for work performed at his direction on properties owned by him, and which had no relation to the non-profit grantees.

Download the full indictment here. If the allegations are true, this has to be one of the worst nonprofit scandals in a long time, effecting some of the most vulnerable, beset upon people in America.  Many of the nonprofits were set up to encourage academic acheivement  for a disturbingly underserved population (many of whom lived on highway overpasses for weeks during Hurricane Katrina).  According to the Times-Picayune article:

The 47-page indictment, long even by federal standards, alleges a superficially complex but fundamentally simple scheme in which the three defendants founded nonprofits, solicited grant money for them, and then wrote checks to purported employees who never received the money. The proceeds of the checks made out to such "straw payees" -- who "did not work for the nonprofits, never received the checks or money, and were not aware that a payment had been issued to them," according to the indictment -- generally wound up in bank accounts controlled by one of the Jeffersons or Coleman, the indictment says.

Pathetic, and that ain't even the half of it.  Just makes me want to spit!

dkj

http://lawprofessors.typepad.com/nonprofit/2008/06/congressmans-re.html

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