Lobbyist indicted on fraud charges

Abramoff, accused of using fake wire transfer for loan, was close to Tom DeLay

August 12, 2005|By LOS ANGELES TIMES

FORT LAUDERDALE, Fla. - Washington lobbyist Jack Abramoff was indicted yesterday on federal fraud charges that accused him and an associate of using a counterfeit $23 million wire transfer to get financing to buy a fleet of casino boats five years ago.

Abramoff, formerly a powerful and highly paid lobbyist who boasted of his ties to House Majority Leader Tom DeLay and others, also is under investigation by a separate federal grand jury for his dealings with Indian tribes. DeLay, a Texas Republican, once described Abramoff as a close friend.

After the indictment by the federal grand jury in Florida was unsealed, Abramoff's Miami-based attorney, Neal Sonnett, said his client had not committed fraud.

Under an arrangement worked out by his attorney, Abramoff surrendered yesterday afternoon at the FBI's field office in Los Angeles. He was taken to the federal Metropolitan Detention Center where he was to spend the night while he awaits a detention hearing today before a U.S. magistrate judge. Thom Mrozek, spokesman for the U.S. attorney's office in Los Angeles, said Abramoff likely would be released on bond.

The indictment alleges that Abramoff and a former business associate, New York businessman Adam R. Kidan, 36, submitted a false document as part of a loan application in 2000 showing that they had transferred $23 million into the account of Konstantinos "Gus" Boulis, then owner of SunCruz Casinos, a group of gambling boats.

But "that document was counterfeit; the defenders never transferred these funds and never made a cash equity contribution toward the purchase of SunCruz," said R. Alexander Acosta, the U.S. attorney in Miami, in a statement.

Foothill Capital Corp. and Citadel Equity Fund agreed on Sept. 27, 2000, to lend the two partners about $60 million toward the $147.5 million purchase of SunCruz, the indictment said. It alleged that the two men submitted fraudulent information about their assets and liabilities.

Abramoff and Kidan are each charged with five counts of wire fraud and one count of conspiracy to commit wire fraud and mail fraud. Each count carries a possible prison term of up to five years, as well as a possible $250,000 fine. The indictment also seeks criminal forfeiture of approximately $60 million.

In an interview with the Associated Press, Abramoff's lawyer Sonnett said: "We were hopeful we'd be able to convince the prosecutor not to file charges because he was not involved in fraud involving SunCruz."

In a statement released by his attorney, Kidan said, "I did nothing wrong and these allegations are totally unfounded."

In Washington, DeLay has been stung by charges that Abramoff paid some of his expenses on an overseas trip in potential violation of House ethics rules. DeLay has said that he thought the expenses were properly paid for by a think tank, not by Abramoff.

In another scandal, former staff members of the Eshkol Academy in Colombia have claimed the financial dealings of Abramoff - who founded the Orthodox Jewish school - contributed to the academy's closing in May.

The Los Angeles Times is a Tribune Publishing newspaper.

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