Former Senator and Presidential Candidate John Edwards Charged for Alleged Role in Scheme to Violate Federal Campaign Finance Laws

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WASHINGTON — NEAL REED NEWSWIRES –  June 3, 2011 – A federal grand jury today returned a six-count indictment against former U.S. Senator and presidential candidate John Edwards for allegedly participating in a scheme to violate federal campaign finance laws, announced Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division and U.S. Attorney George E.B. Holding for the Eastern District of North Carolina.

The indictment, returned in the Middle District of North Carolina, charges Johnny Reid Edwards, 58, of Chapel Hill, N.C., with one count of conspiracy to violate the federal campaign finance laws and to make false statements to the Federal Election Commission (FEC); four counts of accepting and receiving illegal campaign contributions from two donors in 2007 and 2008; and one count of concealing those illegal donations from the FEC. Edwards is scheduled to make his initial appearance in federal court in Winston-Salem, N.C., at 2:30 p.m. EDT before U.S. Magistrate Judge Patrick Auld.

“Today, a federal grand jury returned a six-count indictment against former Senator John Edwards for violating federal election laws during his campaign for president of the United States,” said Assistant Attorney General Breuer. “Mr. Edwards is alleged to have accepted more than $900,000 in an effort to conceal from the public facts that he believed would harm his candidacy. As this indictment shows, we will not permit candidates for high office to abuse their special ability to access the coffers of their political supporters to circumvent our election laws. Our campaign finance system is designed to preserve the integrity of democratic elections—for the presidency and all other elected offices—and we will vigorously pursue abuses of the kind alleged today.”

“Democracy demands that our election system be protected, and without vigorously enforced campaign finance laws, the people of this country lose their voice,” said U.S. Attorney Holding. “The U.S. Attorney’s Office and the Department of Justice are committed to the prosecution of individuals who abuse the very system of which they seek to become a part.”

“Public servants are held to the same laws as everyone else in this country. The position sought does not exempt anyone, even those running for President of the United States,” said Chris Briese, Special Agent in Charge of the FBI in North Carolina.

“Public officials hold positions of trust and get no free pass to ignore the law,” said Victor S.O. Song, Chief, Internal Revenue Service (IRS) Criminal Investigation (CI). “Today’s indictment demonstrates IRS’ commitment to work with our law enforcement partners to ensure our public officers remain trustworthy and adhere to the highest levels of integrity.”

According to the indictment, while a candidate for president of the United States, Edwards conspired with other individuals to accept and receive campaign contributions in excess of limits imposed by the Federal Election Act in an effort to protect and advance his candidacy from disclosure of an ongoing extramarital affair and the resulting pregnancy. The indictment alleges that between 2007 and 2008, Edwards accepted and received more than $900,000 as part of this effort.

The Federal Election Act limits the amount an individual may contribute to any candidate for federal elected office in order to limit the influence any one individual may have on the outcome of a federal election. The Federal Election Act established that the most one individual could contribute for the 2008 presidential primary election was $2,300. According to the indictment, the Federal Election Act’s contribution limit applies to anything of value provided for the purpose of influencing a federal election, including contributions to a candidate and his/her campaign; expenditures made in cooperation, consultation or concert with, or at the request or suggestion of, a candidate or his/her campaign; and payments for personal expenses of a candidate unless those payments would have been made irrespective of his/her candidacy.

The Federal Election Act, according to the indictment, also requires each presidential campaign committee to file periodic campaign finance reports with the FEC, which are made available to the public. In these reports, the committees were required to identify each person who, during the relevant reporting period, contributed more than $200 to the committee, along with the date and the amount of the contribution. According to the indictment, these reports are intended to provide citizens with a transparent record of the amount and sources of all campaign contributions and to assist voters in making informed decisions at the polls.

According to the indictment, the payments at issue were used to facilitate Edwards’ extramarital affair, and to conceal it and the resulting pregnancy from the public. The indictment alleges that the funds were used to pay for the living and medical expenses of the individual with whom Edwards was having the affair, and to pay for the travel and accommodations necessary to hide this individual from the news media and the public so that Edwards’ candidacy would not be damaged. According to the indictment, Edwards knew that the public revelation of the affair and pregnancy would undermine his image and force his campaign to divert personnel and resources away from campaign activities to respond to criticism and media scrutiny.

The indictment alleges that Edwards and his co-conspirators concealed the alleged unlawful contributions from the FEC and the public by causing the John Edwards for President Committee to file with the FEC false and misleading campaign finance reports that failed to disclose the illegal contributions.

A defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.

If convicted, Edwards faces a maximum penalty of five years in prison and a $250,000 fine on the conspiracy charge. He faces five years in prison and a $250,000 fine on each count of accepting and receiving illegal campaign contributions, and a maximum of five years in prison and a $250,000 fine on the charge of concealing the alleged illegal donations.

The case is being prosecuted by Assistant U.S. Attorneys Robert J. Higdon Jr. and Brian S. Meyers of the U.S. Attorney’s Office for the Eastern District of North Carolina, as well as Deputy Chief Justin V. Shur and Trial Attorneys David V. Harbach II and Jeffrey E. Tsai of the Public Integrity Section in the Justice Department’s Criminal Division. The case is being investigated by the FBI and IRS-CI.

Masterminds of $20 million Payroll Fraud Plead Guilty

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Second Payroll Services Company Official Pleads Guilty in $20 Million Fraud
Scheme Defrauded Sacramento County SanDisk, and Others

SACRAMENTO, CA—— (Neal Reed Newswires)  —  November 19, 2010 — United States Attorney Benjamin B. Wagner announced today that Kerry Seaman, 35, of  Lake Ronkonkoma, N.Y., pleaded guilty today in connection with a scheme to divert more than $20 million from Sacramento County as well as two other businesses: SanDisk Corporation (SanDisk) and The Stanley Works and Stanley Solutions Inc. (Stanley). She entered her guilty plea before United States District Judge Garland E. Burrell Jr. Co-defendant and CEO Albert Cipoletti entered a guilty plea to the fraud on October 29, 2010.

Seaman is scheduled to be sentenced by Judge Burrell on March 25, 2011 at 9:00 a.m. Cipoletti is scheduled to be sentenced by Judge Burrell on January 21, 2011 at 9:00 a.m.

The maximum statutory penalty for this wire fraud violation is 20 years in prison and a fine of up to approximately $35 million (two times the pecuniary loss). The actual sentence, however, will be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables.

According to court documents, Seaman was the comptroller of Ingentra HR Services Inc. (Ingentra), a payroll services corporation in Hauppauge, N.Y. Ingentra, then known as Humanic Solutions Inc., was hired by Sacramento County in late 2004 to process the payrolls for Sacramento County’s Special Districts (including the Sacramento Metropolitan Fire District, the cemetery district, the parks and recreation district, independent contractors, and various elected officials). As part of the payroll services, Ingentra calculated the tax payments for the clients and the clients’ employees and then transmitted the payments to the state and federal tax authorities. Ingentra was responsible for paying the income tax withholdings to the IRS and to file the Employer’s Quarterly Federal Tax Form (Form 941) with the IRS on behalf of the clients. (Form 941 includes totals for number of employees, total pay for the period being reported, and amounts withheld from the pay of the employees.)

As stated in the plea agreement, from 2005 until April 2010, Seaman and co-defendant Cipoletti, Chief Executive Officer for Ingentra, devised a scheme to defraud the County of Sacramento – Special Districts, SanDisk, and Stanley of the tax withholdings intended to be paid to the IRS by collecting the correct amount from the clients but underreporting to the IRS the amount owed and diverting the difference to Ingentra’s operating account for its own use.

According to the plea agreement, Seaman and Cipoletti sent funding letters to the clients that correctly calculated payroll and federal tax withholdings for the clients’ employees, and these clients wire transferred funds to Ingentra for the purposes of paying both the payroll and taxes. Seaman and Cipoletti then filed false 941s to the IRS, understating the true employee tax withholdings for these clients. Seaman and Cipoletti then wrongfully diverted in excess of $20 million in tax withholdings from clients Stanley, SanDisk, and Sacramento County that should have been remitted to the IRS on behalf of these clients and these clients’ employees.

This case is the product of an extensive investigation by the Federal Bureau of Investigation and the Internal Revenue Service, Criminal Investigation. The County of Sacramento reported the offense to federal law enforcement and has assisted with the investigation. Assistant United States Attorney S. Robert Tice-Raskin is prosecuting the case.

 

 

Second Payroll Services Company Official Pleads Guilty in $20 Million Fraud
Scheme Defrauded Sacramento County SanDisk, and Others

SACRAMENTO, CA—— (Neal Reed Newswires)  —  November 19, 2010 — United States Attorney Benjamin B. Wagner announced today that Kerry Seaman, 35, of  Lake Ronkonkoma, N.Y., pleaded guilty today in connection with a scheme to divert more than $20 million from Sacramento County as well as two other businesses: SanDisk Corporation (SanDisk) and The Stanley Works and Stanley Solutions Inc. (Stanley). She entered her guilty plea before United States District Judge Garland E. Burrell Jr. Co-defendant and CEO Albert Cipoletti entered a guilty plea to the fraud on October 29, 2010.

Seaman is scheduled to be sentenced by Judge Burrell on March 25, 2011 at 9:00 a.m. Cipoletti is scheduled to be sentenced by Judge Burrell on January 21, 2011 at 9:00 a.m.

The maximum statutory penalty for this wire fraud violation is 20 years in prison and a fine of up to approximately $35 million (two times the pecuniary loss). The actual sentence, however, will be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables.

According to court documents, Seaman was the comptroller of Ingentra HR Services Inc. (Ingentra), a payroll services corporation in Hauppauge, N.Y. Ingentra, then known as Humanic Solutions Inc., was hired by Sacramento County in late 2004 to process the payrolls for Sacramento County’s Special Districts (including the Sacramento Metropolitan Fire District, the cemetery district, the parks and recreation district, independent contractors, and various elected officials). As part of the payroll services, Ingentra calculated the tax payments for the clients and the clients’ employees and then transmitted the payments to the state and federal tax authorities. Ingentra was responsible for paying the income tax withholdings to the IRS and to file the Employer’s Quarterly Federal Tax Form (Form 941) with the IRS on behalf of the clients. (Form 941 includes totals for number of employees, total pay for the period being reported, and amounts withheld from the pay of the employees.)

As stated in the plea agreement, from 2005 until April 2010, Seaman and co-defendant Cipoletti, Chief Executive Officer for Ingentra, devised a scheme to defraud the County of Sacramento – Special Districts, SanDisk, and Stanley of the tax withholdings intended to be paid to the IRS by collecting the correct amount from the clients but underreporting to the IRS the amount owed and diverting the difference to Ingentra’s operating account for its own use.

According to the plea agreement, Seaman and Cipoletti sent funding letters to the clients that correctly calculated payroll and federal tax withholdings for the clients’ employees, and these clients wire transferred funds to Ingentra for the purposes of paying both the payroll and taxes. Seaman and Cipoletti then filed false 941s to the IRS, understating the true employee tax withholdings for these clients. Seaman and Cipoletti then wrongfully diverted in excess of $20 million in tax withholdings from clients Stanley, SanDisk, and Sacramento County that should have been remitted to the IRS on behalf of these clients and these clients’ employees.

This case is the product of an extensive investigation by the Federal Bureau of Investigation and the Internal Revenue Service, Criminal Investigation. The County of Sacramento reported the offense to federal law enforcement and has assisted with the investigation. Assistant United States Attorney S. Robert Tice-Raskin is prosecuting the case.

Social Security Administration official indicted

Social Security Administration Official Indicted for Illegally Distributing Social Security Numbers
Twenty-Nine-Year Employee Unlawfully Created, Distributed Social Security Cards

Pacific Times Journal | https://globejournal1.wordpress.com

SAN JOSE, CA — (Neal Reed Newswires)  — November 23, 2010 — Rachel Ochoa, a Social Security Administration Official indicted by a federal grand jury in San Jose, is scheduled to appear in federal court on November 29, 2010. Ochoa, 66, of San Jose, is indicted on charges of unlawful production of an identification document in violation of 18 U.S.C. § 1028(a)(1), and theft of government property in violation of 18 U.S.C. § 641, United States Attorney Melinda Haag announced.

According to the indictment, Rachel Ochoa, 66 is alleged to have used her position at the Social Security Administration’s San Jose office to produce Social Security cards for individuals who had no legal right to obtain them.

An affidavit filed by an agent of the Federal Bureau of Investigation, in connection with a criminal complaint that was filed in the matter, alleges that the Social Security card recipients paid middlemen amounts ranging from $2,500 to $5,000 to obtain the cards. According to the affidavit, Ochoa fabricated documents used to support the Social Security card application and claimed the required application interviews had taken place when they had not.

Ochoa was arrested on Nov. 9, 2010, at the Social Security Administration in San Jose. She made her initial appearance in federal court in San Jose that same day and is currently out on bail, which was set at $50,000. The defendant’s next scheduled court appearance is at 10 a.m. on Nov. 29, 2010, for a preliminary hearing before Magistrate Judge Patricia V. Trumbull.

The maximum statutory penalty for each count of unlawful production of an identification document in violation of 18 U.S.C. § 1028(a)(1) is five years’ imprisonment and a fine of $250,000. The maximum statutory penalty for each count of theft of government property in violation of 18 U.S.C. § 641 is 10 years’ imprisonment and a fine of $250,000. However, any sentence following conviction would be imposed by the court after consideration of the U.S. Sentencing Guidelines and the federal statute governing the imposition of a sentence, 18 U.S.C. § 3553.

Jeff Schenk is the Assistant U.S. Attorney who is prosecuting the case with the assistance of Kamille Singh. The prosecution is the result of an investigation by the Federal Bureau of Investigation and the Social Security Administration Office of Inspector General.