The William Jefferson Chronicles

Federal fraud trial for bond broker scheduled to begin today

by Paul Rioux, The Times-Picayune

Monday October 13, 2008, 10:08 PM

Former state Sen. Derrick Shepherd and U.S. Rep. William Jefferson pictured here in Nov. 2006. Shepherd pled guilty last week in a fraud scheme with bond broker Gwen Moyo, who is scheduled to go on trial today. Jefferson is an unindicted co-conspirator in the case, defense attorneys say.

In a federal fraud case full of high-profile New Orleans area politicians listed as co-conspirators, all eyes are now on Gwendolyn Moyo, a little-known, twice-convicted bond broker who will literally begin defending herself today.

With no legal training, Moyo is representing herself at a trial set to start this morning, adding a major dose of unpredictability to a case that features U.S. Rep. William Jefferson and his sister, New Orleans' 4th District Assessor Betty Jefferson, as unindicted co-conspirators.

The focus on Moyo intensified after her co-defendant, former state Sen. Derrick Shepherd, D-Marrero, pleaded guilty Friday to conspiracy to commit money laundering.

Shepherd, who resigned his Senate seat the same day, admitted helping Moyo access $141,000 in illegal proceeds from selling bogus construction bonds.

Speculation is swirling about whether Moyo might strike a deal and agree to testify against the Jeffersons, but legal observers said open hostilities between Moyo and prosecutors could work against any plea agreement.

In recent court documents, prosecutors called Moyo a "cynical fraud artist and manipulator" who ignored a court order to turn over trial-related documents to the government out of "spite, anger or frustration in not getting her way."

Moyo, who is being held in the St. Charles Parish jail, has said she is being held as an "enemy combatant" and has accused jail guards of torturing her, according to court records.

Moyo, 53, has already rebuffed at least one overture to cooperate with investigators, spurning an FBI agent's request that she wear a surveillance wire in July 2007 to record evidence against Shepherd.

Moyo is facing 15 counts of fraud, accused of selling bogus bonds for construction projects. The bonds are supposed to serve as insurance policies in case the contractor fails to finish the job.

The federal investigation began after a church in West Memphis, Ark., tried to cash one of the bonds when a contractor defaulted on the construction of a new sanctuary. Another bad bond involved a 2006 project at Pelican Park near Mandeville.

Responding to a series of complaints against Moyo, the state Department of Insurance obtained a court order freezing her bank accounts in November 2006.

Two plead guilty

Unable to cash checks payable to her two companies, Moyo allegedly signed five checks totaling $141,000 over to Shepherd, who deposited them into accounts at his law firm, according to a 38-page indictment released in April.

The indictment said Shepherd kept $65,000 and returned the rest in checks written to Moyo and her associates, including two Chinese citizens in the United States on student visas. Shepherd, 39, has agreed to cooperate with federal prosecutors. He will be sentenced Jan. 21.

Another co-defendant, James Zoucha, 67, of Oceanside, Calif., president of one of Moyo's companies, pleaded guilty in September to conspiracy to commit mail fraud and also agreed to cooperate with investigators.

The indictment said William Jefferson steered Shepherd to Moyo, who wrote a $15,000 check to an unidentified company linked to Jefferson. Moyo also funneled $320,000 in four transactions to accounts belonging to a company controlled by Betty Jefferson, the indictment said.

Neither William or Betty Jefferson has been charged in the case. Both have been indicted on federal charges in unrelated cases.

Jury selection for Moyo's trial is scheduled to begin today at 8:30 a.m. before U.S. District Judge Carl Barbier. But Moyo has filed a motion seeking a delay to reassess her strategy after Shepherd's guilty plea.

Prosecutors, who oppose a delay, said Shepherd's plea has simplified, not complicated, the case, prompting them to scratch 30 names from their original witness list of 56.

With Shepherd no longer a co-defendant, "Moyo will not have to be distracted by anything other than the evidence against her, " prosecutors wrote.

Earlier convictions

The first of Moyo's federal convictions, in 1989, included numerous counts of fraud; her second, in 1991, was for stealing Social Security numbers to obtain fraudulent credit cards to pay her legal expenses from the first case. She was sentenced to nine years in prison and was ordered to pay $1.3 million restitution.

Moyo qualifies for a public defender but has refused any legal assistance apart from a stand-by counsel who may provide only procedural tips, not strategic advice during the trial.

Citing her two convictions, Moyo said in court that she has been "burned" by attorneys in the past and did not want to put her fate in the hands of a public defender.

In February, Barbier ordered her to undergo a psychiatric exam, which found her capable of making a "knowing and voluntary" decision to represent herself, according to court records.

Two attorneys hired by Moyo shortly after her arrest in October 2007 withdrew from the case. Arthur Harris Sr. stepped down after Moyo failed to pay him, and Patrick Fanning bowed out after prosecutors would not rule out charging him with money laundering if she did pay him.

U.S. Attorney Jim Letten sent Fanning a letter saying it would not be fair to treat him differently than Shepherd, who had said the money Moyo gave him was payment for legal services.

In a motion asking to be removed from the case, Fanning said the letter had a "chilling effect approaching frost-bite levels" on his willingness to represent Moyo.

Mounting defense from jail

Planning her own defense from jail has presented challenges for Moyo, according to court records.

She received tens of thousands of documents on compact discs, but didn't have a computer to read them. She asked Barbier to order the government to provide paper copies.

Noting that the reams of documents would likely fill her cell, Barbier said he would return her laptop after investigators cloned the hard drive to use as evidence.

The court also has provided $10,000 for Moyo to hire an investigator to review documents at a rate of $40 an hour for up to 250 hours.

Mark Lane, a Virginia lawyer who talked with Moyo about representing her in April, said he was disappointed when she decided to serve as her own attorney.

"It's always a problem when you represent yourself, even if you're a lawyer, " he said Monday. "But it's an even bigger problem if you're not a lawyer."

Several pretrial hearings were marked by Moyo's rambling responses to questions from Barbier, who cautioned Moyo about the complexity of the allegations against her.

"It's very unwise -- almost foolish -- of you to attempt to represent yourself, " the judge told her during a May hearing. "This isn't like defending yourself against a traffic ticket."

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Paul Rioux can be reached at or 504.826.3785.

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