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A former staffer for ex-Rep. Steve Stockman (R-Texas) has pleaded guilty for his role in a scheme to steal hundreds of thousands of dollars to pay personal expenses and fund Stockman’s election campaigns, the Justice Department announced ( U.S. v. Dodd, S.D. Tex., 4:17-cr-00116, plea entered 10/11/17).
The guilty plea by Jason Posey, who served on Stockman’s congressional staff and was treasurer of his committee, signaled Posey is likely to cooperate in the prosecution of the former congressman. Stockman is awaiting trial on charges that he launched long-running schemes to divert money using fraudulent charities and defrauding wealthy donors of nearly $1 million.
Posey admitted that, at Stockman’s direction, he and another congressional staffer, Thomas Dodd, illegally funneled $15,000 of charitable proceeds into Stockman’s campaign bank account and caused the campaign to file reports with the Federal Election Commission (FEC) that falsely stated that the money was a contribution from their parents and from the staffers themselves. Dodd had previously pleaded guilty in the case.
Posey also said Stockman directed him to send a letter to a charitable donor that falsely stated that the donor’s $350,000 donation had been used to support a charitable endeavor, when in fact the funds were actually used for other purposes, including Stockman’s campaigns for public office.
In connection with his plea, the DOJ said, Posey admitted that he and Stockman raised $450,000 to support Stockman’s 2014 Senate campaign by falsely representing to a donor that the funds would be used to support a legitimate independent expenditure by an independent advocacy group Posey created. In fact, Posey admitted, Stockman personally directed and supervised the activities of the purportedly independent group, including the printing and mailing of hundreds of thousands of copies of a pro-Stockman publication to Texas voters. Posey also admitted that he submitted a false affidavit to the FEC in order to conceal the scheme, the DOJ said.
Stockman lost the 2014 Republican Senate primary in Texas to Sen. John Cornyn.
Posey pleaded guilty to one count of mail fraud, one count of wire fraud and one count of money laundering before Judge Lee H. Rosenthal of the U.S. District Court for the Southern District of Texas, the DOJ said. He is scheduled to be sentenced on March 29, 2018.
Stockman’s trial is set to begin in January of next year. The former congressman has denied wrongdoing and pleaded not guilty in a court appearance last April.
Court filings have indicated that the former congressman, who held a House seat from 2013-2014 and previously served in the chamber in 1995-1997, has been under investigation by the Justice Department for years. The DOJ collected more than 140,000 pages of documents in the probe that led to Stockman’s indictment earlier this year on corruption charges, according to Stockman’s lawyer Richard Kuniansky.
“Although it’s not clear from the indictment or criminal complaint when the government’s investigation commenced, it appears it may have been conducted over the past 3½ years,” Kuniasky said in a court motion asking for a delay in Stockman’s trial.
Stockman’s alleged schemes date back to 2010 and involved soliciting donors “to fund legitimate voter education activities in specific jurisdictions in advance of the November 2010 federal elections,” according to Dodd’s plea agreement. The plea said the money actually was used for personal expenses, including credit card debt.
The donors involved were not named in the plea, but the Houston Chronicle said money came from the Baltimore-based Rothschild Art Foundation and Rothschild Family Foundation, funded by Stanford Z. Rothschild Jr., and from the Illinois-based Ed Uihlein Family Foundation.
The criminal charges filed by Justice Department prosecutors against Stockman followed and expanded upon charges in a 2014 report by the Office of Congressional Ethics (OCE) and released by the House Ethics Committee. Stockman left Congress at the beginning of 2015 before the Ethics Committee took any disciplinary action against him.
To contact the reporter on this story: Kenneth P. Doyle in Washington at firstname.lastname@example.org
To contact the editor responsible for this story: Paul Hendrie at pHendrie@bna.com
Copyright © 2017 The Bureau of National Affairs, Inc. All Rights Reserved.
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