Former Congressman Jesse Jackson, Jr. Sentenced to Federal Prison

[Photo of Jesse Jackson, Jr. from wikipedia]

Did you hear the news? According to various news reports, on Wednesday, former Illinois Congressman Jesse Jackson, Jr. was sentenced by a federal judge to serve 30 months in prison following his guilty plea to mail fraud and wire fraud, in connection with his siphoning $750,000 from his campaign account. 

One of the allegations in my prosecution, (as a former AUSA), of former Georgia Senate Majority Leader Charles Walker similarly involved using his own campaign account for personal expenses.

In the new case, Jackson reportedly used his political campaign account as a "piggy bank," over the years, using it to purchase luxuries such as a Rolex watch and spa excursions.

Jackson's wife was also sentenced to serve one year for her role in the scheme, according to reports.

To his credit, Jackson had accepted responsibility for his crimes and did not use his bi-polar condition as an excuse, at sentencing.

A Goolsby "War Story:" More Examples of Kickbacks in Fraud Cases

[Depiction of Cash from wikipedia]

Recently, I started a series of posts in which I describe examples of kickbacks which were paid in major fraud cases I saw as a former federal prosecutor. Currently, I am a criminal defense lawyer in Augusta, Georgia, where I practice law with my sons, but I handled a number of significant white collar criminal cases as an Assistant U.S. Attorney for over 20 years.

In one major "honest services" mail fraud case, the defendant construction company paid a total of $2.7 million in kickback payments to an employee of another company, in exchange for being awarded profitable construction contracts by the other company's employee. 

One example of the many kickbacks, or rewards, paid in this case included payments for the other company's employee to purchase TWO vacation homes. In short, the construction company paid money toward his purchase of an $800,000 log cabin at a Minnesota lake and another $150,000 for the employee to purchase a condo at an exclusive winter ski resort in Whistler, British Columbia.

Of course, in return, the employee of the other company "scratched the back" of the construction company president by approving millions of dollars in construction projects.

As you can see, sometimes white collar crime pays pretty good; that is, until, like these defendants, you get caught!  

A Goolsby "War Story:" The Most Interesting Kickbacks Ever!

Presently, I am a criminal defense lawyer in Augusta, Georgia. As a former federal prosecutor for over 20 years, I prosecuted all kinds of white collar crime cases, including every kind of fraud and public corruption one can imagine! One of the interesting aspects of many of the fraud cases which I prosecuted involved the types of kickbacks which were paid, either to crooked government officials, or to employees who failed to give their employers their "honest services."

The latter category gave me an idea for a series of blog posts. In short, on occasion, I want to give you some examples of the most interesting kickbacks I have seen, as a former Assistant U.S. Attorney. Here goes....

In one major mail fraud case I prosecuted, among other expensive kickback gifts, the owner of a construction company bought two new Corvettes, (of different colors, of course), and a new Dodge Viper, for the employee of another company who approved payment of his invoices! 

Most folks would be content simply to have one sports car!  Don't you agree?

Just Another Typical Investment Fraud and Ponzi Scheme

[Photo from socyberty.com]

You may have thought you had a bad week.  But did you hear about what happened this week to Georgia businessman Jeffrey Wallace Edwards and his company, Frontier Holdings, Inc.? 

According to various news reports, Edwards and his company were found guilty in a Rome, Georgia federal courtroom on an indictment charging numerous federal criminal counts, including mail fraud, wire fraud, and money laundering.  The charges reportedly centered around on old-fashioned ponzi scheme, or investment fraud scam, in which investors, including thirty retirees, were induced by Edwards to invest their money, with outlandish promises of rates of return, which, of course, never materialized. The news reports indicate that Edwards spent their money, instead, on himself, for vacation cruises, fur coats, and other luxury items. 

As a former federal prosecutor, (and currently, as an Augusta, Georgia criminal defense lawyer), I have handled a number of fraud cases like this one.  Most of them followed this same pattern.

Edwards will be sentenced later, in accordance with the federal sentencing guidelines.  Now, compared to this defendant, don't you realize that your week wasn't so bad, after all?!

Don Lepre, Fraud, and Lessons About Missing Court

[Photo from dailymail.co.uk]

As a former federal prosecutor and, currently, as an Augusta, Georgia criminal defense lawyer, I can tell you that one important lesson I have learned about criminal cases is that -- no matter what else happens -- you must always show up at court on time.  You must never keep a judge waiting! 

Well, according to news reports, Mr. Don Lepre, the so-called "King of Infomercials," has apparently never learned this lesson.  Lepre has reportedly now been arrested in Tempe, Arizona by U.S. Marhals after missing his arraignment, which was scheduled for earlier this week in Phoenix.  If he had appeared in court, Lepre had reportedly been expected to enter a not guilty plea to federal fraud charges.

The fraud charges, including conspiracy, mail fraud, wire fraud, and money laundering, reportedly revolve around Lepre's business, the "Greatest Vitamins in the World."  The indictment alleges, among other things, that numerous victims were promised money which they never received for selling vitamins.  Of course, Lepre has a right to enter a not guilty plea and a right to a jury trial.

But first, Lepre apparently must learn to show up at court!  And I am quite confident that a federal judge will now teach him this important lesson and ensure he shows up from now on!

Former Illinois Congressman Dan Rostenkowski Passes Away

Another prominent former politician has died this week. Various news reports indicate that former long-time Illinois Congressman Dan Rostenkowski passed away at this home earlier today. The 36 year Congressman was noted for many positive things, including his support of the 1986 Tax Reform Act.

Unfortunately, Rostenkowski will also be remembered for serving 17 months in federal prison following a mail fraud conviction. The Congressman got into trouble for using the House of Representatives' post office as a means of funneling taxpayer money for gifts to friends and associates.

As to his federal crimes, the Huffington Post notes today that, at that time, noted author and columnist Mike Royko had essentially described his offenses as "nickel and dime" stuff, which would not have been prosecuted back when Rostenkowski had first come to Congress. However, in the mid-1990's, when the Congressman was prosecuted, times had changed. According to Royko, Rostenkowski made an inviting target for federal prosecutors looking for a "big trophy" to put on their wall! (As a former federal prosecutor, I found Royko's observations to be entertaining!)

In 2000, shortly before leaving office, former President Clinton granted Rostenkowski a full pardon.

The Supreme Court and "Honest Services" Mail Fraud

At some point during the next year, the United States Supreme Court is expected, for the first time, to grapple with the issue of what constitutes "honest services" mail fraud. In May, 2009, the Supreme Court granted certiorari in the appeal by a business man of his conviction under the statute. (Black v. United States). His defense attorneys claim the statute is too vague.

In 1988, Congress enacted this statute, (18 U.S.C. 1346), which essentially makes it a federal crime for either a politician or a business executive to use the mails in furtherance of a scheme to "deprive another of their intangible right to [the politician's, or business executive's] honest services.

The "honest services" mail fraud statute is a popular prosecutorial tool used by federal prosecutors everywhere! As a former federal prosecutor, I often utilized this statute to charge corruption cases, too!

Frankly, it is easier to see what this "honest services" statute means when it is applied in the public sector, i.e. to politicians. For example, it is clear to see that a politican has deprived the public of their right to his "honest services" when he uses his public office for private gain and secretly lines his pockets with money. Whether or not he is guilty or innocent, that is the type of case which former Illinois Governor Rod Blagojevich faces.

But applying the "honest services" statute to the private (business) sector presents some tougher questions about what the mail fraud statute really means. The issue in the pending appeal before the Supreme Court involves trickier questions about whether the statute, (and the meaning of "honest services"), is too vague, including issues about how far does the statute go in criminalizing business deals, and does it criminalize mere ethical violations. It also raises questions about to whom does a business executive owe a duty of "honest services," and is that duty based upon state or federal law? In other words, the Supreme Court must decide, in this new case, whether or not the "honest services" mail fraud statute is too vague, because it fails to give adequate notice to the average person as to what constitutes a crime.

Just as you never know what a jury will do, you also can never fully guess what the Supreme Court may do! But it will be interesting to see what happens! And I suspect former Governor Blagojevich and his defense attorneys will be watching, too!

Mail Fraud and Wire Fraud

Do you know how the feds really catch white collar criminals and how the cases are often charged in federal court? The answer lies in the use of the U.S. mail by white collar criminals.

Years ago, Congress made it a federal crime, (in 18 U.S.C. 1341), to use the U.S. mail to help further a fraudulent scheme. This federal crime is known as mail fraud. Thus, any time someone sends a fraudulent solicitation or bogus claim in the mail, they may have violated the federal mail fraud statute. In addition, Congress also made wire fraud, (18 U.S.C. 1343), a federal crime. Therefore, any time a con artist makes a telephone call or uses the internet in furtherance of his scam, he has likewise violated federal law and may be visited by an F.B.I. agent.

And don't think you can get away with your crime simply by sending your bogus claims via federal express. Congress also included use of common carriers in the mail fraud statute, too! So, maybe you should just use "donkey mail," if you want to avoid a date in federal court!