Monday, May 13, 2019
Austin Man Pleads Guilty to Fraudulent Scheme to Solicit Hundreds of Thousands of Dollars in Contributions to Scam-Pacs
An Austin, Texas, entrepreneur pleaded guilty today for fraudulently soliciting hundreds of thousands of dollars in political contributions through several scam-PACs that he founded and advertised as supporting candidates for the Office of the President of the United States during the 2016 election cycle.
Assistant Attorney General Brian A. Benczkowski of the Justice Department’s Criminal Division and Special Agent in Charge Christopher Combs of the FBI’s San Antonio Division made the announcement.
Kyle Gerald Prall, 40, of Austin, Texas, pleaded guilty to one count of mail fraud before U.S. Magistrate Judge Andrew W. Austin of the Western District of Texas. A sentencing hearing has not yet been scheduled.
“Prall exploited the honest political engagement of countless citizens by representing that his organizations were supporting presidential candidates when in fact he was just stealing contributions,” said Assistant Attorney General Benczkowski. “In addition to cheating people out of their money, fraud committed in connection with our elections corrodes public confidence in our democratic institutions. The Department of Justice is committed to investigating and prosecuting these crimes.”
“Making donations to a political cause, campaign or candidate is an important expression of free speech and a right all Americans should enjoy,” said Special Agent in Charge Combs. “By misappropriating the donations for his own personal use, the defendant not only violated the trust of his victims, he also deprived them of their fundamental right to free speech. The FBI is committed to protecting this right, and holding individuals, like the defendant accountable. Before making donations citizens should be mindful of this unscrupulous fraud scheme and exercise due diligence in researching the legitimacy of an organization.”
According to admissions made in connection with his plea, in 2015 and 2016, Prall created several political committees—including Feel Bern, HC4President and Trump Victory—which he advertised online to solicit contributions purportedly in support of presidential candidates in the 2016 election. Prall advertised that the contributions would be used to support the candidates in various ways, including paying for transportation for voters to the polls; paying for training for volunteers to make phone calls and canvass neighborhoods to support the respective candidates; paying to help voters obtain appropriate identification documents and making contributions directly to one of the candidates and to other organizations supporting his campaign. In reality, Prall did not intend to, and did not, use the contributions for these purposes and instead transferred much of the money to himself through sham LLC accounts and used the other funds to generate additional contributions to his fraudulent political committees. Specifically, Prall admitted that of the $548,428 in contributions, he transferred $205,496 to himself through sham LLCs that he created for the purpose of moving the money, while contributing less than $5,100 to political causes. Additionally, Prall used the political committees’ debit cards to pay for his personal travel and entertainment expenses, such as travel to Jacksonville, Florida and Belize; hotel stays in Miami Beach, Florida, and Austin, Texas; and to pay for food, hookah, alcohol and bottle service, “club dances performed by entertainers,” room service, minibar charges, a deep-tissue massage and a pet-cleaning fee.
As part of his plea, Prall agreed to pay restitution in the amount of $548,428—the total amount he raised—including the forfeiture of the $205,496.68 he transferred to himself through sham LLCs during the scheme.