David M. Nangle was a former chair of the ethics committee in the Massachusetts State House when he illegally used campaign funds for private golf club dues, trips to casinos and expensive meals at restaurants. In his role as chair of the ethics committee, Nangle had full awareness that his behavior was an illegal and unethical violation of his duty to his constituents.
Upon learning of the investigation into his illegal activities, Nangle devised a scheme to obstruct justice by engineering a sham consulting agreement with a local business owner designed to make payments he received appear legitimate. Nangle had received $27,000 in payments from the business for shepherding legislation favorable to a client of the business into law. Obstruction of justice was not included as part of Nangle’s plea deal. Nangle was a veteran of 22 years in the Massachusetts State House.
On February 24th 2021, Nangle pleaded guilty to 10 counts of wire fraud, 4 counts of bank fraud, 4 counts of making false statements to a bank and 5 counts of filing false tax returns. Nangle’s defense emphasized his gambling addiction, which led him to use misappropriated funds to compensate for his debts, while the prosecution noted that Nangle carried out various forms of fraud in a calculated manner.
Campaign Finance Fraud – A White Collar Crime with Serious Consequences
Campaign Finance Violations are prohibited under the Federal Election Campaign Finance Act of 1971. Campaign finance law states that contributed amounts should be used for certain purposes specifically restricted to campaign-related funds. If funds are used for other purposes, this can be viewed as embezzlement.
Embezzlement is a form of fraud and theft, but unlike theft it happens when funds specifically entrusted to a person are stolen or misappropriated. Embezzlement of campaign finance funds entrusted by the public to the political party or representative can be prosecuted under the FECA laws that apply, or they can be prosecuted as mail or wire fraud. Sometimes the deception entails a charge of making false statements to a federal agency.
There are obligations for people who become aware of misappropriation of funds under FECA laws to report this activity. Therefore, if campaign finance fraud happens it is in the interests of anyone who discovers it to report it. For the prosecution to prove any accusation of fraud, intention must be proved. It may be difficult to argue that an elected official who knew of the rules did not intentionally steal or misappropriate funds.
Nangle used a campaign credit card to pay for many expenses. To cover up these payments he filed false tax returns by reporting fictitious business deductions. Separately, Nangle was convicted of bank fraud for fraudulently obtaining loans from a bank to finance the purchase of his home, repay debts and fund his gambling habit. He did so by making false statements on multiple loan applications.
Nangle was sentenced to 15 months in prison and 2 years of supervised release. He was also ordered to pay restitution of $33,347 to the IRS and forfeiture of $15,650. He was charged under the statutes of wire fraud, bank fraud, making false statements and filing false tax returns.
The Charges Explained:
- Wire fraud is committed when a person uses an interstate means of communication such a telephone or email with intent to defraud. Bank fraud is committed when a person intends to defraud a financial institution or obtains funds by making false statements or false representations.
- Bank fraud and wire fraud are both serious white collar crimes that have severe penalties. Wire fraud can result in a sentence of up to 20 years and bank fraud can result in a sentence of up to 30 years. Both crimes have to be carried out with intention and don’t have to be successful in order to be convicted.
- Making false statements is a crime that can carry up to five years in prison.
- Depending on the amount of money involved, filing false tax returns can result in up to 3 years in jail. Any crimes involving defrauding property can involve substantial fines, restitution or forfeiture.
- Nangle was not convicted for political corruption, but this is a crime that can be charged and convicted as a criminal offense, which can involve prison time or fines. Nangle’s plea deal excluded obstruction of justice, extortion or obtaining property under color of official right. While he was not required to plead for these charges, it was noted that the weight of the excluded obstruction of justice charge contributed to a higher offense level when his sentencing range was calculated. Nangle’s sentencing was intended to send a message that white collar political corruption is taken seriously and that prosecution isn’t shy about sending offenders to jail.
When misuse of campaign finance is investigated, it can result in charges and convictions that carry serious penalties. The weight of public duty and the fact that the intent to deceive can be easily proved when a public representative is clearly aware of official duties, means that campaign finance fraud is not a comfortable accusation for anyone to face. Prosecutors, jury and the public will not take kindly to any fraudulent activities that constitute the betrayal of public trust. A conviction for campaign finance fraud, political corruption or any fraud associated with public office will follow an individual for the rest of their life. Only an experienced and highly skilled white collar crime attorney should be trusted to handle a case of campaign finance fraud. Our Boston white collar crime attorneys are ready to defend the most serious and complex cases of bank fraud, wire fraud and other white collar crime. Please contact us today.
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