Public Corruption Prosecutions in
the U.S. – An Overview of Cases
Involving Forfeiture and
Restitution Issues
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
• 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
Statutes Used to Prosecute Official
Corruption
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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
Importance of Restitution and
Forfeiture Tools
• Disgorge profits
• Deter
• Punish
For most corruption cases, the
things of value given are small
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Trips--foreign and domestic
Expensive watches
Free home improvements
Golf, meals and entertainment
Cash –
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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
income
outside
• 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
• 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
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
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
Jack Abramoff
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
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
• 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
• 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
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
Effects of Abramoff and Scanlon
Guilty Pleas so far
• 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
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
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
• Was sentenced in March 2006 to 8 years
and 4 months
– prosecutors asked for 10 years
– Defense argued prior war service, alcoholism
and depression
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.