The William Jefferson Chronicles

Moyo guilty of money laundering
by Paul Rioux, The Times-Picayune
Tuesday October 21, 2008, 1:04 PM

A jury found Gwendolyn Moyo guilty today on all charges in her federal fraud trial, the third conviction in an international financial scam that brought down former state Sen. Derrick Shepherd, who pleaded guilty and resigned days before the trial began last week.

Moyo, a twice-convicted bond broker who represented herself, displayed no emotion as she sat at the table checking off the guilty verdicts as the clerk read them in a process that took about 10 minutes.

The jury of six men and six women deliberated for 10 hours over two days before finding Moyo guilty on the 41 counts of fraud, conspiracy and money laundering for selling more than a dozen bogus construction bonds, netting about $2 million in illegal proceeds.

Moyo faces 15 to 20 years in prison, according to federal sentencing guidelines. She had been sentenced to nine years in federal prison following convictions in 1989 and 1990 on similar fraud charges.

Moyo's conviction is sure to sharpen the focus on the alleged roles of U.S. Rep. William Jefferson and his sister, Betty Jefferson, a New Orleans assessor, who are listed as unindicted co-conspirators in Moyo's indictment.

Federal investigators have declined to say whether either of the Jeffersons is a target in the ongoing probe.

The phony bonds Moyo sold were intended to serve as multi-million-dollar insurance policies that could be cashed if contractors failed to complete major construction projects.

The state Department of Insurance began an investigation in the fall of 2006 when it started receiving complaints that Moyo refused to pay off bonds for failed projects.

Following three days of testimony, prosecutors sought to boil down hundreds of documents about Moyo's financial transactions to the simple fact that she was not a licensed bond broker but sold bonds anyway. The fact that the documents were worthless just added insult to injury, they said.

Moyo, who called no witnesses to testify in her defense, claimed she did not need a broker's license because she had acted as an "insurance consultant," a position not recognized by Louisiana law.

Many of the bogus bonds were underwritten by a shell company in Toronto, Canada, that claimed to have $20 million in cash reserves at a time when the company president was locked out of his office for falling behind in rent payments.

Prosecutors said Moyo executed the scam with help from "three dupes," including two Chinese citizens with student visas and a California retiree whom she had never met in person until he testified against her during the three-day trial.

James Zoucha, 67, of Oceanside, who pleaded guilty Sept. 10 to conspiracy to commit mail and wire fraud, admitted printing phony bonds using a form scanned into his computer.
He was paid $2,000 a month while Moyo lived a lavish lifestyle, blowing through hundreds of thousands of dollars as quickly as she bilked the money from a church and a series of small businesses, several of which were shoved to the brink of bankruptcy, according to an FBI analysis of her bank records.

The crude nature of the scam makes it all the more surprising that three prominent New Orleans area politicians became enmeshed in the case.

Shepherd pleaded guilty to conspiracy to commit money laundering Oct. 10, just four days before he was to stand trial with Moyo. The Marrero Democrat, who resigned his 3rd District Senate seat, had been charged with helping Moyo launder $141,000 in ill-gotten gains, keeping $65,000 for himself.

Moyo, who declined a court-offered public defender, had a "standby" attorney to advise her on procedural matters. With no legal training, Moyo scored precious few points during meandering cross-examinations that drew frequent rebukes from U.S. District Judge Carl Barbier, who continually admonished her to stick to evidence in the case.

In a brief interview with a reporter during a break Monday, Moyo said she didn't call witnesses in her defense because prosecutors had "poisoned the atmosphere with their pettiness."

"The bottom line is that they're after William and Betty Jefferson. I just got caught in the middle," said Moyo, who previously said she declined an FBI request to wear a surveillance wire to record evidence against Shepherd.

During a three-month period ending in January 2007, Moyo wired $320,000 in four installments from an account containing illegal proceeds to Jeffco Services, a company controlled by Betty Jefferson, according to bank records presented in court.

A day after receiving $20,000 from Moyo, Jeffco Services wired a check for the same amount to a bank account held by the "Honorable William Jefferson." The transfer occurred the day before Rep. Jefferson attended a $12,000 party thrown by Moyo in a private suite at a Los Angeles Lakers game Jan. 27, 2007.

In her closing argument Monday afternoon, Moyo denied that the Jeffersons were complicit in the money laundering scheme.

"Betty Jefferson talked to the FBI, and she told them..." Moyo said before being cut off when Barbier sustained an objection by prosecutors.

At the end of her hour-long closing argument Monday, Moyo seemed to pin her hopes of being exonerated on the possibility that one or both of the Jeffersons might eventually go to trial.

"If that happens, I hope they will have competent representation and the truth will finally come out," she said in an apparent acknowledgment about the quality of her own legal work.

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