31-count indictment says they bilked
charities for years Feds allege they took money aimed at black youth
Thursday, June 05, 2008
By Gordon Russell
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
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
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
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
The indictment alleges that Mose and Betty Jefferson both improperly
used the charities' money to renovate the properties after acquiring
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 firstname.lastname@example.org or at (504) 826-3347.