The William Jefferson Chronicles

Jeffersons tied to Shepherd conspiracy case
by Meghan Gordon, The Times-Picayune
Thursday July 10, 2008, 10:18 PM

State Sen. Derrick Shepherd, left, enters the Hale Boggs Federal Courthouse in New Orleans with his lawyer in April. The lawyers were back in court today.

U.S. Rep. William Jefferson and Orleans Parish Assessor Betty Jefferson are the unidentified public officials described in the April conspiracy indictment against state Sen. Derrick Shepherd, according to Shepherd's attorneys.

Federal prosecutors acknowledged in a preliminary hearing Thursday that they recently disclosed the identities of "Public Official A" and "Public Official B" to Shepherd's defense team, but they would not make the information part of the public record, a decision backed by U.S. District Judge Carl Barbier.

After the hearing, defense attorney John Reed confirmed speculation that the unnamed public officials were the Jeffersons. Neither is charged in the Shepherd indictment, but they face their own criminal trials in separate cases.

Foe turned friend

In 2006, Shepherd challenged William Jefferson for the 2nd District congressional seat, harshly criticizing the incumbent for being targeted in a federal bribery investigation. Eleven days after finishing third in the primary, Shepherd endorsed Jefferson in the runoff.

"There are no deals I cut with Congressman Jefferson, " he said at the time, sloughing off his criticism as campaign talk.

According to the April indictment, Jefferson, D-New Orleans, allegedly steered unlicensed bond broker Gwen Moyo to Shepherd as a way to pay off campaign debt. Federal investigators started probing that possible scenario after Shepherd's about-face endorsement.

As "Public Official B, " Betty Jefferson, the congressman's sister, is accused of accepting from Moyo four wire transfers worth $320,000 funneled through a company she controlled. Two payments were made in November 2006; the others were in January 2007, according to the indictment.

In July 2007, Moyo wrote a $15,000 check to "ABC Group, " an unidentified company with which William Jefferson is affiliated.

Reed used the revelation to try to deflect attention from Shepherd's criminal culpability.

"That's what the case is all about, really, " Reed said Thursday, referring to the Jeffersons' alleged involvement. "And we feel that it's important that that be understood generally. Surely the government has some reasons for not quite saying it outright, but I think the proceedings in court today made it very clear today that that's what is going on."

Five charges

Shepherd, D-Marrero, faces five criminal charges, including mail fraud, conspiracy to commit mail and wire fraud, and conspiracy to commit money laundering. Prosecutors say he fabricated records at his law office to give Moyo access to $141,000 in checks written to AA Communications, one of her companies whose accounts were frozen by the state Department of Insurance. He kept about $65,000 and returned the rest to Moyo and her associates. About $20,000 of that amount was used to pay campaign debt, according to the indictment.

He denies the conspiracy and says he performed 100 hours of legitimate legal work for Moyo in exchange for payment.

Barbier dealt with a spate of other preliminary motions in the case, including defense requests to let Shepherd go to trial separately from Moyo and to shield his statements made to investigators.

Reed said Shepherd's right to a fair trial was jeopardized by his co-defendant's insistence upon representing herself in court despite Barbier's repeated warnings against it.

Barbier reiterated that message to her Thursday, but he denied Reed's motion to hold separate trials.

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

"I wonder about that over and over again, " Barbier said. "I definitely don't think it's a good idea for her to try to represent herself."

He said he hasn't ruled out ordering her to accept an attorney and would revisit the question, especially in light of a Supreme Court decision in June that changed the legal standard of mental competency required for self-representation versus sanity to stand trial.

Barbier added that the joint case would likely present opportunities for the co-defendants to inculpate each other, but he said redacting interview transcripts before trial would prevent the jury from hearing such cross-accusations.

Interview questioned

In a separate motion, Reed asked Barbier to shield from jurors statements Shepherd made to investigators before his indictment.

Prosecutors called FBI Special Agent Peter Smith to testify about his Aug. 6 interview of Shepherd with Special Agent Lisa Horner. Smith said he tried for two weeks to reach Shepherd by phone at his Marrero law firm, then paid an early-morning visit to the senator's home in Stonebridge Country Club near Gretna, outside his 3rd District.

Smith said he didn't restrict Shepherd's movement or prevent him from making phone calls. The interview ended when Shepherd said he had to attend his stepfather's funeral.

The FBI agent said he didn't explain to Shepherd his constitutional rights because he wasn't being detained and hadn't become a target of the investigation.

On cross-examination, Reed suggested that the federal government was targeting Shepherd well before the interview. He said investigators already seized bank records and knew of Shepherd's financial ties to Moyo.

"It's not really like Mr. Shepherd was some old witness when you went to see him in August, " Reed said.

Smith said he simply wanted to hear Shepherd's side of things.

Barbier denied the defense motion, saying Shepherd wasn't in custody during the interview and that investigators had no probable cause at that point to arrest him.

Defendant a no-show

Shepherd did not attend the hearing, which appeared to puzzle Barbier.

"He filed a motion to suppress and he's not here?" the judge said from the bench. "He's the defendant."

Reed said he didn't believe the law required Shepherd to attend the preliminary hearing. He said his client waived his appearance and wouldn't challenge the procedure as infringing on his rights.

"Frankly I haven't seen a case where the defendant wasn't present for substantial motions like these, " Barbier said.

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Meghan Gordon can be reached at or 504.826.3785.

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