Top Maryland lobbyist indicted in fraud case

May 27, 1994|By John W. Frece and Marcia Myers | John W. Frece and Marcia Myers,Sun Staff Writers Sun staff writers Larry Carson and William F. Zorzi Jr. contributed to this article

Federal prosecutors accused Annapolis lobbyist Bruce C. Bereano yesterday of defrauding four clients of about $16,000 by padding his bills for legislative entertainment and then using the money to make illegal political contributions through family members and office employees.

Mr. Bereano was charged with eight counts of mail fraud, a felony charge that carries a maximum sentence of five years in prison and a $250,000 fine for each count.

The indictment against Mr. Bereano -- the highest paid lobbyist in the state capital, in some years earning more than $1 million representing business interests before legislators -- was returned yesterday morning by a federal grand jury in Baltimore.

The charges are the culmination of a 17-month investigation that began with accusations of impropriety involving Mr. Bereano's representation of GTECH Corp., which won Maryland's lucrative $49 million lottery contract in 1992. Yesterday, prosecutors said that portion of their investigation yielded no evidence of wrongdoing and was recently closed.

Mr. Bereano, 49, who joined the governor and other top Maryland officials at a breakfast fund-raiser for a Western Maryland lawmaker early yesterday, said he learned of the grand jury's action in a telephone call from his attorney later in the morning.

For weeks, Mr. Bereano has been quietly telling associates that he expected the investigation to result in his indictment. While he seemed subdued yesterday, he clearly was not surprised. He declined to comment about the indictments.

"Very respectfully, I don't think it is appropriate to comment about it, or respond, other than in a judicial forum, in a courtroom, or within the judicial process," he said. "I think dealing with it in any other context is just not appropriate. It is a legal matter."

Prosecutors say the lobbyist defrauded four clients of about $16,000 by billing them for bogus legislative entertainment and using the money for political contributions in 1990 and 1991. The namesof the candidates who received the money were not disclosed, and they are not under investigation, said First Assistant U.S. Attorney Gary P. Jordan.

Lawyer minimizes charges

Mr. Bereano's lawyer, M. Albert Figinski, called the charges "a far cry" from the allegations of wrongdoing involving his client's representation of GTECH. He also minimized the extent of the alleged infractions, saying that, by his calculation, the total amount of money involved in the indictments is only about $600 -- a figure he said that, if true, may have simply been misbilled.

"That ain't a lot of money," Mr. Figinski said.

A date for Mr. Bereano's arraignment in U.S. District Court in Baltimore has not yet been scheduled and is not likely to occur for a week or two, said Mr. Jordan.

Meanwhile, Mr. Bereano said he plans to continue to represent clients before the legislature and in court. "I'm going to continue my work everyday. I, respectfully, don't see any reason to change it," he said.

The indictment alleges that between May 1990 and June 1991, Mr. Bereano instructed employees of his law firm to make campaign contributions in their names to candidates he specified. The employeeswere then reimbursed from the law firm's account, allegedly using money from the fraudulent bills.

The indictment also contends that employees were told to cash checks -- also drawn on a law firm account -- creating cash that Mr. Bereano gave to family members as reimbursement for contributions they made to the Bereano Political Action Committee on his behalf. Mr. Bereano, who already controlled the disbursement of funds from several PACs set up by his clients, established a PAC in his own name to distribute additional contributions at a time when PAC donations were unlimited.

The indictment contends that in the law firm's books, the expenses were recorded as legislative entertainment. Through these steps, Mr. Bereano disguised the source of the contributions.

Bereano PAC records from 1990, on file with the state board of elections, show that during one five-month period of the investigation, seven people who were either relatives of Mr. Bereano, or who listed his home address as their own, contributed more than $15,000 to the PAC. The relatives included his mother, father, son and his then-wife.

The clients he is accused of defrauding are Phillips Publishing Inc. of Potomac; Dental Benefit Providers of Bethesda; Medical Mutual Liability Insurance Society of Maryland, of Hunt Valley, and Maryland Saltwater Sportfisherman's Association of Glen Burnie.

Richard N. Novotny, executive director of the Sportfisherman's group, which had hired Mr. Bereano in the hope of making rockfish a game fish that was off-limits to commercial fishermen, said he was "not aware anything like that was going on and was very surprised the indictment came down."

"I've always thought of him as very forthright, upfront, honest person. . . . We feel no real misuse of any of our funds," he said.

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