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Philly Congressman Found Guilty On All Charges In Corruption Case

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Rep. Chaka Fattah (D-PA) has been found guilty of all counts against him, including racketeering, fraud and money laundering.

The Congressman, who has served in Congress since 1995, had been accused of using his position to boost his career and his bank account. Specifically, Fattah, together with lobbyist Herbert Vederman, 69, of Palm Beach, Florida; Fattah’s Congressional District Director Bonnie Bowser, 59, of Philadelphia; and Robert Brand, 69, of Philadelphia; and Karen Nicholas, 57, of Williamstown, New Jersey were charged with participating in a racketeering conspiracy and other crimes last July.

Fattah, Brand, Nicholas, and Vederman were found guilty of participating in a racketeering conspiracy. Fattah was also found guilty of conspiracy to commit bribery, bribery, conspiracy to commit wire fraud, conspiracy to commit honest services fraud, mail fraud, money laundering conspiracy, money laundering, bank fraud, false statements to a financial institution, six counts of mail fraud and five counts of falsification of records. Additionally, Vederman was convicted of conspiracy to commit bribery, bribery, bank fraud, making false statements to the Credit Union Mortgage Association, falsification of records and two counts of money laundering; while Brand was also convicted of conspiracy to commit wire fraud, and Nicholas was convicted of conspiracy to commit wire fraud, two counts of wire fraud and two counts of falsification of records.

Bowser was acquitted of racketeering conspiracy but convicted of conspiracy to commit bribery, bank fraud, making false statements to the Credit Union Mortgage Association, falsification of records and money laundering.

The jury took just 14 hours to deliberate following a one month trial.

The original investigation centered on Fattah Sr.’s bid for Mayor of Philadelphia in 2007. To finance that campaign, Fattah allegedly borrowed $1 million, which was disguised as a loan to a consulting company in order to avoid reporting requirements. Fattah reportedly repaid nearly half of the loan ($400,000) and made arrangements for a nonprofit that he controlled, Educational Advancement Alliance (EAA), to repay the remainder. To make it seem legitimate, the defendants and others fabricated reportedly records used on tax returns and campaign finance disclosure statements.

That same nonprofit, EAA, was named a second time in the indictment involving allegations that one of Fattah’s associates, Karen Nicholas, obtained $50,000 in federal grant money she claimed would be used by EAA to support a conference on higher education. The conference never took place. Instead, Nicholas used $20,000 to pay a political consultant and $10,000 to pay her attorney; she was accused of writing several checks to herself from EAA’s operating account.

Fattah was also accused of exchanging political favors for financial gain. Specifically, in order to pay down campaign debt, Fattah reportedly arranged for one of his debtors to apply for a $15 million grant to a then non-existent non-profit entity on the condition that the debt would be forgiven. Despite Fattah’s efforts, the grant was never awarded; the debt was forgiven anyway.

Fattah was also accused of accepting bribes from Vederman in exchange for an ambassadorship to the U.S. Trade Commission, including $18,000 to help Fattah and his wife qualify for a mortgage on a Poconos vacation home. The payment was, according to officials, disguised as payment for the sale of a Porsche belonging to Fattah’s wife, Philadelphia news anchor Renee Chenault-Fattah, although the sale never happened. Chenault-Fattah was not charged.

The investigation was a joint effort involving the FBI’s Philadelphia Division and the Internal Revenue Service-Criminal Investigation (IRS-CI) Philadelphia Field Office.

"Convictions, like the one returned against these five defendants today, send a loud and clear message that people who willfully defy the law will be fully investigated, prosecuted and subjected to the full punishment of the law for their actions," said Special Agent in Charge Akeia Conner IRS-CI.

In response to the verdict, Fattah issued the following written statement:

This is an extraordinarily difficult day for me and my family. A jury has decided that based on the evidence presented to them that I am guilty of charges presented by the government. Today’s decision notwithstanding, it has been my privilege to serve the constituents of the Second Congressional District for over 20 years. We have done important work and passed legislation that has helped tens of millions of young people achieve their dream of a college education, ensured that hundreds of thousands of families facing foreclosure have been able to remain in their homes, and millions suffering from brain related diseases now have hope that a cure or a treatment is closer today than yesterday. I continue to be proud of that record. While today’s outcome isn’t what we had hoped, I respect our nation’s judicial system. I want to thank the people of the Second Congressional District for the honor of serving them.

In April, Fattah, 59, lost his re-election bid in the April primary to Dwight Evans. Evans will face James Jones in the general election on November 8, 2016.

Charges against Fattah had been filed almost a year to the day that Fattah’s son, Chaka Fattah Jr., stood in a courtroom to hear a list of charges filed against him. Fattah Jr. was sentenced to five years in prison for fraud and tax charges and ordered to pay $1,172,157 in restitution.

Sentencing for Fattah is scheduled for October 4; Vederman and Brand will be sentenced on the same day. Sentencing for Nicholas and Bowser is scheduled for October 5.

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