|Betty Jefferson implicated in Shepherd case, sources say|
by Gordon Russell, The Times-Picayune
Friday April 11, 2008, 11:37 AM
The indictment charging state Sen. Derrick Shepherd with fraud also details alleged money laundering by an unnamed "Public Official B," who sources close to the investigation said is 4th District Assessor Betty Jefferson, sister of indicted U.S. Rep. William Jefferson.
The sprawling indictment, released Thursday, accuses Shepherd and two alleged co-conspirators of mail fraud, wire fraud and money laundering. "Public Official B" is accused of helping to launder "additional criminal proceeds."
Betty Jefferson and her attorney, Ike Spears, did not return calls seeking comment.
Both William Jefferson and his elder brother, Mose, are already under indictment. William Jefferson faces 16 federal corruption charges in Virginia, while Mose Jefferson last week was charged with seven federal bribery-related counts in New Orleans.
Betty Jefferson matches the description in Thursday's indictment, which says "Public Official B" is a family member of "Public Official A."
"Public Official A," in turn, is identified as a "political rival of Shepherd's."
Jefferson and Shepherd faced off in a hotly contested race for the 2nd Congressional District seat in late 2006. After finishing third in the primary, Shepherd endorsed Jefferson, who then managed -- despite the specter of an unrelated criminal probe focusing on him -- to hold onto the seat he has occupied since 1990.
The indictment says that "Public Official A" -- William Jefferson, sources said -- steered bond broker Gwendolyn Moyo to Shepherd. Moyo, who was charged alongside Shepherd on Thursday, is accused of selling phony construction bonds and pocketing the proceeds.
Shepherd, prosecutors claim, helped Moyo access about $141,000 in ill-gotten gains after Moyo's bank accounts were frozen by the state Department of Insurance. He allegedly kept about $65,000 of that amount and returned the rest to Moyo and third parties selected by her.
Moyo hired Shepherd in the fall of 2006, shortly after the congressional campaign. Shepherd has maintained that he performed legal services for the money. The indictment says he "created false bills and time records" to hide the fact he was helping Moyo launder money.
Shepherd used at least $20,000 of the money from Moyo to retire a portion of his campaign debt, the indictment says.
With regard to Betty Jefferson, the indictment says that Moyo funneled $320,000 in four transactions to accounts belonging to "XYZ Services," a company controlled by "Public Official B" (Betty Jefferson, according to sources) and "associated" with "Public Official A" (William Jefferson, the sources say).
The four transactions with XYZ comprise four of the 15 counts of wire fraud Moyo faces.
While the indictment seems to implicate Betty Jefferson, she has not been charged with a crime, and legal observers say it's too early to tell whether she will be.
Dane Ciolino, a Loyola Law School professor, said that being fingered as a co-conspirator in an indictment -- but not charged -- can sometimes be cause for a sigh of relief.
That's particularly true when an investigation has been going on for a long time, he said. When that's the case, the lack of a charge can often signal that the government decided the evidence was lacking.
"Prosecutors end up charging fewer people than the number they believe actually commit crimes," Ciolino said. "It could be that the evidence is ambiguous, or that for other reasons, they've decided to exercise prosecutorial discretion."
Julian Murray, a defense lawyer and former federal prosecutor, said he doubts that's the case.
"I would be surprised if that person wasn't ultimately charged," he said, adding that in his experience, the federal government rarely implicates someone in an indictment unless it plans to charge the person later -- or unless the person cooperates with the government.
Murray said it's possible the government feels it needs to secure a plea from one of the defendants to proceed against Betty Jefferson.
For a person to be found guilty of money laundering, the prosecution must prove both that the money was tainted and that the person who helped to "clean" the money knew of its criminal origin.