International Financial Law Prof Blog

Editor: William Byrnes
Texas A&M University
School of Law

Tuesday, April 9, 2019

Congressional Staffer Sentenced to Prison for Extensive Fraud and Election Crimes Scheme

A former congressional staffer was sentenced to 18 months in prison followed by three years of supervised release and ordered to pay $564,718.65 in restitution and $156,855.29 in forfeiture, for participating in a multi-year scheme to defraud charitable donors of hundreds of thousands of dollars and secretly funnel the proceeds to pay for personal expenses and illegally finance campaigns for federal office. 

Jason T. Posey, 48, of Tupelo, Mississippi, was sentenced in the U.S. District Court for the Southern District of Texas by Chief U.S. District Judge Lee H. Rosenthal.  Posey pleaded guilty on Oct. 11, 2017, to one count of mail fraud, one count of wire fraud and one count of money laundering.  As part of his plea, Posey admitted that he participated in a scheme led by former U.S. Representative Stephen E. Stockman, 62, who was convicted by a federal jury in Houston on April 12, 2018, of 23 counts of mail fraud, wire fraud, conspiracy to make conduit contributions and false statements to the Federal Election Commission (FEC), making false statements to the FEC, making excessive coordinated campaign contributions, money laundering and filing a false tax return.  Another of Stockman’s former congressional staffers, Thomas Dodd, 40, of Houston, Texas, pleaded guilty on March 20, 2017, to one count of conspiracy to commit mail and wire fraud and one count of conspiracy to make conduit contributions and false statements.  On Dec. 12, 2018, Dodd was sentenced to serve 18 months in prison and ordered to pay $800,000 in restitution, to be followed by three years of supervised release.

According to the admissions made by Posey in connection with his guilty plea, from January 2013 to February 2014, Posey assisted Stockman in fraudulently soliciting $800,571.65 in donations from charitable organizations and the individuals who ran those organizations based on false pretenses, then using a series of sham nonprofit organizations and dozens of bank accounts to launder the money before it was spent on a variety of personal and campaign expenses. 

Specifically, Posey admitted that shortly after Stockman took office as a member of the U.S. House of Representatives in 2013, Stockman and Dodd used the name of one sham nonprofit entity, Life Without Limits, to solicit and receive a $350,000 charitable donation, to be used to create an educational center called the Freedom House.  Stockman, Dodd, and Posey instead used this donation for a variety of personal and campaign expenses, including illegal conduit campaign contributions, and payments for hundreds of thousands of robocalls and mailings promoting Stockman’s candidacy for U.S. Senate in early 2014.

In addition, Posey admitted that, in connection with Stockman’s Senate campaign, Stockman and Posey used another sham nonprofit entity called Center for the American Future to secure a $450,571.65 donation in order to fund a purportedly legitimate independent expenditure promoting Stockman’s candidacy.  Posey admitted that the purportedly independent expenditure was in fact secretly controlled by Stockman, who directed his campaign and Posey to file false affidavits with the FEC covering up Stockman’s involvement. 

In addition, Posey admitted that during the early stages of the investigation, Stockman directed Posey to flee to Cairo, Egypt, for two and a half years so that Posey could not be questioned by law enforcement.

https://lawprofessors.typepad.com/intfinlaw/2019/04/congressional-staffer-sentenced-to-prison-for-extensive-fraud-and-election-crimes-scheme.html

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