PHILADELPHIA — Chaka Fattah Sr., 58, of Philadelphia, and four of his associates were indicted today for their roles in a racketeering conspiracy involving several schemes that were intended to further the political and financial interests of the defendants and others.
Charged in a 29-count indictment are Chaka Fattah Sr., Bonnie Bowser, 59, of Philadelphia, Karen Nicholas, 57, of Williamstown, NJ, Herbert Vederman, 69, of Palm Beach, Florida, and Robert Brand, 69, of Philadelphia. The indictment charges participation in a racketeering conspiracy, bribery, conspiracy to commit wire, honest services and mail fraud, money laundering conspiracy, money laundering, bank fraud, false statements to a financial institution, and multiple counts of mail fraud, wire fraud, and falsification of records.
The charges were announced today by United States Attorney Zane David Memeger, Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, FBI Special Agent-in-Charge Edward J. Hanko and IRS-Criminal Investigation Special Agent-in-Charge Akeia Conner.
Specifically, the indictment alleges that, in connection with his failed 2007 campaign to serve as mayor of Philadelphia, Fattah and certain associates borrowed $1 million from a wealthy supporter, and disguised the funds as a loan to a consulting company. After he lost the election, Fattah allegedly returned to the donor $400,000 that the campaign had not used, and arranged for Education and Community Advancement Fund, a non-profit entity that he founded and controlled, to repay the remaining $600,000 using charitable and federal grant funds that passed through two other companies, including one run by Brand.
In addition, the indictment alleges that, after his defeat in the mayoral election, Fattah sought to extinguish approximately $130,000 in campaign debt owed to a political consultant by agreeing to arrange for the award of federal grant funds to the consultant. According to the allegations in the indictment, Fattah directed the consultant to apply for a $15 million grant (which ultimately he did not receive) on behalf of a then non-existent non-profit entity. In exchange for Fattah’s efforts to arrange the award of the funds to the non-profit, the consultant allegedly agreed to forgive the debt owed by the campaign.
The indictment further alleges that Fattah misappropriated funds from his mayoral and congressional campaigns to repay his son’s student loan debt. To execute the scheme, Fattah and Bowser allegedly arranged for his campaigns to make payments to a political consulting company, which funds the company then used to lessen Fattah’s son’s student loan debt. According to the allegations in the indictment, between 2007 and 2011, the consultant made 34 successful loan payments on behalf of Fattah’s son, totaling approximately $23,000.
In another alleged scheme, beginning in 2008, Fattah communicated with individuals in the legislative and executive branches in an effort to secure for Vederman an ambassadorship or an appointment to the United States Trade Commission. In exchange, Vederman provided money and other items of value to Fattah. As part of this scheme, the indictment alleges that the defendants sought to conceal an $18,000 bribe payment from Vederman to Fattah by disguising it as a payment for a sham car sale that never actually took place.
Finally, the indictment alleges that Nicholas obtained $50,000 in federal grant funds that she claimed would be used by Education and Community Advancement Fund to support a conference on higher education. The conference never took place. Instead, Nicholas used the funds for personal expenses.
This case was investigated by the FBI and the IRS-Criminal Investigation.
Fattah is currently a congressman representing Pennsylvania’s 2nd Congressional District. He was first elected to Congress in 1994 and has held the seat since then.
Charged with racketeering conspiracy, bribery, conspiracy to commit wire, honest services and mail fraud, money laundering conspiracy, money laundering, bank fraud, false statements to a financial institution, and multiple counts of mail fraud, wire fraud, and falsification of records, Fattah faces up to 20 years in prison if convicted.
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Key Facts
- State: Pennsylvania
- Category: Public Corruption
- Source: DOJ Press Release â†â€â€
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