20 February 2013
Jesse and Sandra Jackson, Jr.'s Money Pot
"In July 2007, for example, he withdrew $43,350 in campaign funds to purchase
an official check made payable to a jeweler for a mens gold-plated
Former Congressman Jesse L. Jackson, Jr. Pleads Guilty to Conspiring to Defraud
Campaign of More Than $750,000
He and His Wife Used Campaign Funds for Wide Range of Personal Expenses;
Sandra Stevens Jackson Pleads Guilty to Tax Charge
U.S. Attorneys Office February 20, 2013
District of Columbia (202) 514-7566
WASHINGTONFormer Congressman Jesse L. Jackson Jr., 47, pleaded guilty
today to conspiring to defraud his re-election campaigns of more than $750,000
in funds that were used to pay for a range of personal items and expenses,
including jewelry, fur capes and parkas, high-end electronics, celebrity
memorabilia, furniture, kitchen appliances, and a home renovation project.
Jackson, who has residences in Chicago and Washington, D.C., also admitted
taking steps to conceal seven years of illegal activities, including the
filing of false and misleading reports with the Federal Election Commission
(FEC) and the U.S. House of Representatives.
Jacksons wife, Sandra Stevens Jackson, 49, a former Chicago alderman,
pleaded guilty in a separate proceeding to filing false tax returns for her
role in the scheme.
The guilty pleas, which took place this morning in the U.S. District Court
for the District of Columbia, were announced by U.S. Attorney Ronald C. Machen,
Jr.; Valerie Parlave, Assistant Director in Charge of the FBIs Washington
Field Office; and Richard Weber, Chief of the Internal Revenue Service-Criminal
Jesse Jackson, Jr. pleaded guilty to one count of conspiracy to commit wire
fraud, mail fraud, and false statements. The Honorable Robert L. Wilkins
scheduled sentencing for June 28, 2013. The charge carries up to five years
in prison, a fine of up to $250,000, and other penalties. Under federal
sentencing guidelines, the parties have agreed that the applicable range
for the offense is 46 to 57 months in prison and a fine between $10,000 and
As part of the plea agreement, Jesse Jackson, Jr. will be required to pay
any restitution ordered by the court and forfeit about $750,000 in proceeds
and property from the scheme. Among other items, he must forfeit a mink cashmere
cape; a mink reversible parka; a guitar signed by pop legend Michael Jackson;
and various memorabilia associated with historic figures and various celebrities.
Sandra Stevens Jackson is to be sentenced July 1, 2013, also by Judge Wilkins.
The tax charge carries up to three years in prison, a fine of up to $250,000,
and other penalties. According to the governments calculations, which
may be disputed at sentencing, the applicable range for this offense under
federal sentencing guidelines is 18 to 24 months in prison and a fine between
$4,000 and $40,000.
Jesse Jackson, Jr. was elected to Congress in 1995 and served until November
2012 as the representative for the 2nd Congressional District of Illinois.
According to the governments evidence, Jackson and his wife carried
out the fraud scheme from in or about August 2005 until in or about April
2012. Rather than using funds donated to the campaign as they were intended
to be usedto pay for legitimate expenses associated with Jacksons
re-electionthe Jacksons used a substantial portion of the contributed
funds for personal expenditures.
According to the governments evidence, Jesse Jackson, Jr. made direct
expenditures from the campaigns accounts for personal expenses, totaling
approximately $57,792. In addition, he and his wife used credit cards issued
to the campaign to make purchases for personal expenses, totaling approximately
$582,773. Finally, Jackson provided his wife and a congressional staffer,
known in court documents as Person A, approximately $112,150
solely for the purpose of engaging in transactions that benefited the Jacksons.
Todays guilty plea is nothing short of tragic, said U.S.
Attorney Machen. Jesse Jackson, Jr. entered public life with unlimited
potential but squandered his bright future by engaging in a self-destructive
course of conduct that was staggering in both degree and scope. For seven
years, Mr. Jackson betrayed the very people he inspired by stealing their
campaign donations to finance his extravagant lifestyle. His fall from grace
will hopefully chasten other leaders who are tempted to sacrifice their ideals
and integrity to line their own pockets.
Today, Mr. Jackson admitted to engaging in a conspiracy to defraud
his constituents by using money donated to his re-election campaign for his
own personal use, said Assistant Director in Charge Parlave of the
FBI. But Mr. Jacksons scheme did not stop there, as he then knowingly
withheld information about his campaign finances from the FEC and IRS. This
investigation and these guilty pleas demonstrate that the FBI and our law
enforcement partners will continue to pursue all allegations of public corruption
and prove that no one in this country is above the law, to include those
who make our laws.
Public officials hold positions of trust. While the vast majority of
public officials are hard-working and dedicated, fraud and corruption at
any level of public service breaches this trust, said IRS-CI Chief
Weber. IRS-CI stands committed to investigating those officials, regardless
of political status, who ignore their pledge to the American public and,
instead, take a path of greed and corruption. Mr. Jackson disregarded his
pledge to America by using campaign funds for his own personal expenses.
Then, he attempted to conceal his spending by filing false and misleading
reports with the FEC and the House of Representatives. Mrs. Jackson also
took steps to conceal the income by willfully underreporting their income
on their joint U.S. Individual Income Tax Returns for a six-year period.
This case should serve as a strong warning to those who might consider similar
behavior. No one is above the law, and everyone is accountable for their
Framework of the Scheme
According to the governments evidence, Sandra Stevens Jackson had a
series of roles in Jacksons re-election campaigns, including treasurer,
from about January 2005 to about November 2006; consultant, from at least
2008 to about November 2012, and campaign manager, starting in 2011.
Person A also served different roles over the years, including: assistant
treasurer for the campaign, from about January 2005 through about November
2006; treasurer, from about January 2007 through about June 2008; and staff
member for Jacksons Washington, D.C. congressional office, starting
in or around June 2008.
According to the governments evidence, money was channeled from the
campaign to the Jacksons in the following ways:
Direct expenditures: Jackson made $57,792 in direct expenditures from the
campaigns bank account from January 2006 through July 2011. In July
2007, for example, he withdrew $43,350 in campaign funds to purchase an official
check made payable to a jeweler for a mens gold-plated Rolex watch.
In addition, he used $14,442 in campaign funds to pay down balances on person
credit cards maintained by the Jacksons.
Credit card expenditures: The campaign maintained a credit card account,
Jackson for Congress, from at least August 2005 through August
2012. Individual credit card members on this account included Jackson and
his wife. During this period, the Jacksons used the credit cards to purchase
merchandise and services that were personal in nature, including high-end
electronic items; a washer, a dryer, a range, and refrigerator; collectors
items; clothing, food, and supplies; movie tickets; health club dues; personal
travel, including a holistic retreat; and personal dining expenses.
All told, campaign funds were used to pay $582,773 of these purchases. During
the conspiracy, the Jacksons made approximately 3,100 purchases that were
personal in nature. A large number of these personal expenditures fit into
Restaurants, nightclubs, and lounges, approximately $60,857
Airfare, approximately $31,700
Sports clubs and lounges, including gym membership, approximately $31,700
Tobacco shops, approximately $17,163
Alcohol, approximately $5,814
Dry cleaning, approximately $14,513
Grocery stores, approximately $8,046
Drug stores, approximately $6,095
Other expenditures: In March 2006, Jackson directed that a $36,000 check
from the campaign be issued to his wifes business for billboard expenses.
Sandra Stevens Jackson transferred this money from the business account to
a personal account. Jackson and his wife, who controlled the personal account,
used nearly all of the money that purportedly was for billboard expenses
to pay down personal debts.
Jackson paid Person A with funds from the campaign account so that Person
A could pay expenses on behalf of Sandra Stevens Jackson, or, in some instances,
give cash to Jackson. The campaign issued about $76,150 in checks to Person
A from about October 2008 until about March 2012, even though Person A actually
was entitled to only $11,409 for his work. Person A then expended nearly
all of the remaining $64,741 for the personal benefit of Jackson and his
wife. Examples of this scheme include:
Person A used checks from the campaign to provide Jackson with $15,700, which
Jackson deposited into personal accounts he maintained for his own use.
Person A used checks from the campaign to pay down the credit card balance
of Jackson and his wife by $4,800.
Person A used checks from the Campaign to pay for $26,347 worth of work performed
on the Jacksons home.
Gifts and loans: At Jacksons direction, two companies made payments
on the balance of a personal credit card of Jackson and his wife. The owner
of an Illinois consulting firm issued a check in 2009 for $3,500 from a business
account to pay down the balance of a personal credit card. The owner of an
Alabama-based family issued a check for $25,000 from a corporate account
in 2011, also to pay down a personal credit card balance.
Filing of False and Misleading Reports
According to the governments evidence, the Jacksons took steps from
2005 until 2012 to ensure that materially false and misleading reports were
filed with government entities. These reports were filed with the FEC and
the House of Representatives. These actions were critical to carrying out
the conspiracy because they enabled the conduct to continue without question
for a lengthy period of time and without the questions from regulators and
the public that likely would have ensued had truthful, accurate reports been
Campaigns are required to periodically file reports with the FEC reflecting
contributions and expenditures during the reporting period. Campaigns are
responsible for reviewing credit card statements and itemizing expenditures
exceeding $200. They also are to itemize in cases in which a particular vendor
receives more than $200 during the election cycle.
Jackson and his wife, on numerous occasions, directed Person A not to itemize
the personal expenditures made on the Campaign credit cards. Additionally,
they knowingly and intentionally provided Person A with false justifications
for the expenditures, causing Person A, in turn, to prepare false reports
for submission to the FEC.
For example, in May 2008, Person A reported that the campaign spent $1,553
in January 2008 at a Chicago museum for a fundraiser. In fact, Jackson spent
these funds to purchase porcelain collectors items. In July 2008, Person
A reported that the campaign spent $387 for equipment for office repairs.
Jackson actually used this money to purchase grass seed and fertilizer for
the lawn at his Chicago home.
As a member of Congress, Jackson was required annually to file a financial
disclosure statement with the House of Representatives. He failed to report
the funds that he and his wife used in defrauding the Campaign. In addition,
he failed to report that he was the beneficiary of undisclosed expenditures
made by third parties.
Income Tax Returns
In her guilty plea, Sandra Stevens Jackson admitted to filing false tax returns
for calendar years 2006 through 2011. According to the governments
evidence, she knowingly and willfully failed to report nearly $570,000 in
taxable income for those tax years. This led to an estimated tax loss of
In announcing the guilty pleas, U.S. Attorney Machen, Assistant Director
in Charge Parlave, and Chief Weber commended the work of those who investigated
the case for the FBI and IRS-CI. They also expressed appreciation for the
assistance provided by the U.S. Marshals Service on the asset forfeiture
aspects of the case. In addition, they commended those who worked on the
case from the U.S. Attorneys Office, including Paralegal Specialists
Tasha Harris, Lenisse Edloe, and Gail Price, and former Paralegal Specialist
Finally, they acknowledged the work of Assistant U.S. Attorneys Matt Graves,
Michael K. Atkinson, and Jonathan W. Haray of the Fraud and Public Corruption
Section of the U.S. Attorneys Office for the District of Columbia,
who are investigating and prosecuting the matter, as well as Assistant U.S.
Attorneys Catherine K. Connelly and Anthony Saler, of the Asset Forfeiture
and Money Laundering Section.