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Jefferson indictments handed down
http://blog.nola.com/updates/2008/06/more_listed_in_jefferson_famil.html

Posted by Gordon Russell / Staff Writer June 04, 2008 10:24PM

More family listed, but not by name

Some federal money granted

By Gordon Russell
Staff writer

New Orleans 4th District Assessor Betty Jefferson, an elder sister of indicted U.S. Rep. William Jefferson, conspired with other family members to plunder more than $600,000 in taxpayer money from three charities they founded and controlled that were supposed to help inner-city youths, alleges a 31-count federal indictment handed up Wednesday.

Mose Jefferson, brother to the congressman and the assessor, also was charged Wednesday, as was Angela Coleman, Betty Jefferson's daughter.

The latest round of charges adds to a growing federal docket for the Jefferson family. William Jefferson, indicted last year, is awaiting trial in Virginia on 16 counts of public corruption. Mose Jefferson is set to be tried Oct. 20 on federal charges that he bribed the former president of the Orleans Parish School Board.

The trio charged Wednesday will be arraigned June 20.

The 47-page indictment, long even by federal standards, alleges a superficially complex but fundamentally simple scheme in which the three defendants founded nonprofits, solicited grant money for them, and then wrote checks to purported employees who never received the money.

The proceeds of the checks made out to such "straw payees" -- who "did not work for the nonprofits, never received the checks or money, and were not aware that a payment had been issued to them," according to the indictment -- generally wound up in bank accounts controlled by one of the Jeffersons or Coleman, the indictment says.

U.S. Attorney Jim Letten described the practice as "looting."

Because the straw payees are actual people, the indictment includes 10 counts of aggravated identity theft. Approximately 20 such people are listed but not named in the document.

The other charges include conspiracy to commit mail fraud, program fraud, mail fraud and conspiracy to commit money laundering. Betty Jefferson also faces four counts of tax evasion, and Mose Jefferson was charged with three counts of lying to federal agents.

Left unsaid in the indictment: Nearly all of the money the charities received from taxpayers was steered to them by elected officials close to the Jefferson family -- or in the family.

Millions steered their way

Records show that between 1994 and 2006, the state of Louisiana contributed at least $5.5 million to three of the groups: Care Unlimited, Orleans Metropolitan Housing and Central City Adult Education. Most of the money was earmarked by then-state Rep. Renee Gill Pratt, a protege of the congressman, and her successor, Jalila Jefferson-Bullock, the congressman's daughter. Jefferson-Bullock is no longer in office.

The nonprofits also qualified for some federal aid, including a $99,350 grant from the U.S. Department of Education. It could not be determined Wednesday whether the congressman played a role in securing that money. More than $60,000 of it was diverted to family members, the indictment says.

Clearly, prosecutors believe that numerous members of the Jefferson clan played a role in the scheme. Eight others are listed in the indictment, described per Justice Department policy as "Family Member 1" through "Family Member 9."

It's not clear who is alleged to be involved. Two of the congressman's younger siblings, Brenda Foster and Bennie Jefferson, were listed as directors or founders of the charities. In addition, a niece, Aisha Duniver, has signed documents on behalf of Care Unlimited.

Bennie Jefferson died in December.

The indictment does not analyze every dollar the nonprofits received, and it is not clear whether the federal investigators attempted to do so. But of $791,468 in state aid to the nonprofits that was examined closely, $627,378 was converted "through false and fraudulent means" to the personal control of either one of the defendants or "Family Member 1," the indictment says.

Ike Spears, a lawyer who represents Betty and Mose Jefferson, did not return calls seeking comment.

Meant to help poor

The charities purported to serve the disproportionately poor and African-American population of Central City that has long been the Jefferson political family's stronghold. For instance, Care Unlimited received grants for programs to provide "educational support services" to pregnant teens and to "focus on the broad problems of black males between the ages of 9 and 21."

The programs often were shams, the indictment alleges. For instance, it says, Care Unlimited submitted a report to the state saying that "'Individual C' had provided certified teachers for 6-8 weeks to 25 pregnant teenage clients" when no such assistance occurred -- in fact, "Individual C" did not even work for the charity. More than two-thirds of the money went to Betty Jefferson and Coleman, the indictment says.

In another case, Mose Jefferson allegedly diverted to himself nearly three-quarters of a $93,464 grant that was aimed at teaching building skills to "at-risk male youths."

And the indictment claims that the trio converted to personal use nearly all of a $178,000 grant aimed at keeping black youths on the right track.

Letten stopped short of saying that the charities were completely fraudulent, indicating that they did do some community work. He declined to hazard a guess about how much of the money directed at the charities was used for the intended purposes.

Care Unlimited did hold an annual back-to-school event -- typically hosted by a Jefferson ally -- at which school supplies were distributed to needy children, according to Times-Picayune coverage of the event.

However, the newspaper noted in a 2006 story on the nonprofits that none of the charities seemed to be making much of an effort to advertise its services. None was listed in the phone book or marked with signs.

That story also noted that Gill Pratt had orchestrated the donation to the charities of four new vehicles that had been donated to the city after Katrina. After Gill Pratt lost her City Council re-election bid, she wound up behind the wheel of one of them, a Dodge Durango, when Care Unlimited hired her as its director.

Gill Pratt had been driving the same car while on the council. Mose Jefferson, the congressman's political strategist and Gill Pratt's longtime boyfriend, also received one of the donated cars. All four of the cars were returned to the city after the story was published.

Report spurs FBI

The story also revealed that Betty Jefferson and Mose Jefferson had acquired property that earlier had been purchased by Orleans Metropolitan Housing with public money. Betty Jefferson bought her Irish Channel home from the organization in 1999 for $18,296, slightly less than the charity paid for it seven years earlier.

Mose Jefferson, meanwhile, paid the charity $10,000 for a modest office building at 3313 S. Saratoga St. The story noted that he got a good deal: The building brought in at least half that much each month in rent, with tenants including Jefferson-Bullock, Gill Pratt and Care Unlimited. All of the rent money came from taxpayers.

After the 2006 story was published, the FBI, in a rare move, announced it was investigating the nonprofits. Soon afterward, federal subpoenas seeking information about the public money funneled to the groups were delivered to state offices.

It's not clear whether the investigation was already under way when the bureau made its announcement. Letten seemed to indicate Wednesday that the nonprofits were under federal scrutiny even before Hurricane Katrina.

The indictment alleges that Mose and Betty Jefferson both improperly used the charities' money to renovate the properties after acquiring them.

While the document focuses on charities founded by members of the Jefferson family, it also lays out an alleged scheme involving Greater St. Stephen Manor, a federally subsidized senior citizens complex.

Betty Jefferson served as president of a nonprofit affiliated with the complex. She illegally funneled almost $10,000 of the organization's money to herself and Coleman, the indictment says.

Staff writer David Hammer contributed to this report. Gordon Russell can be reached at grussell@timespicayune.com or at (504)826-3347.



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