|
||
|
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 men’s gold-plated Rolex watch."
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. Attorney’s Office February 20, 2013 District of Columbia (202) 514-7566 WASHINGTON—Former 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. Jackson’s 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 FBI’s Washington Field Office; and Richard Weber, Chief of the Internal Revenue Service-Criminal Investigation (IRS-CI). 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 $100,000. 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 government’s 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 government’s 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 used—to pay for legitimate expenses associated with Jackson’s re-election—the Jacksons used a substantial portion of the contributed funds for personal expenditures. According to the government’s evidence, Jesse Jackson, Jr. made direct expenditures from the campaign’s 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. “Today’s 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. Jackson’s 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 misdeeds.” Framework of the Scheme According to the government’s evidence, Sandra Stevens Jackson had a series of roles in Jackson’s 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 Jackson’s Washington, D.C. congressional office, starting in or around June 2008. According to the government’s 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 campaign’s 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 men’s 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; collector’s 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 these categories: Restaurants, nightclubs, and lounges, approximately $60,857 Other expenditures: In March 2006, Jackson directed that a $36,000 check from the campaign be issued to his wife’s 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. Gifts and loans: At Jackson’s 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 government’s 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 filed. 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 collector’s 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 government’s 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 approximately $159,000. 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. Attorney’s Office, including Paralegal Specialists Tasha Harris, Lenisse Edloe, and Gail Price, and former Paralegal Specialist Sarah Reis. 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. Attorney’s 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.
|