Michael Gabor Sentenced to 10 Years in Prison for Racketeering, Other Crimes Related to Cuyahoga County Corruption Investigation

Michael Gabor was sentenced to more than 10 years in prison for paying bribes to public officials and helping orchestrate a shame election uncovered as part of the Cuyahoga County corruption investigation, federal law enforcement officials announced today.

Judge Sara Lioi sentenced Gabor to 121 months in prison and ordered him to forfeit the value of his Ohio Public Employee Retirement System account, valued at approximately $22,252. The money will eventually be paid to Cuyahoga County.

Gabor, 53, of Parma, Ohio, was convicted in March of racketeering, conspiracy to commit Hobbs Act extortion, obstruction of justice, and other crimes following a trial before U.S. District Judge Sarah Lioi that lasted nearly two months.

Gabor was convicted for his role in orchestrating a sham election against his then-boss, Cuyahoga County Auditor Frank Russo, paying a cash bribe to get his job, and paying a bribe to a domestic relations judge as part of Gabor’s divorce case.

“The defendant helped rig an election, bribe a judge, and buy his job,” Assistant United States Attorney Antoinette T. Bacon said during the sentencing hearing.

Stephen D. Anthony, Special Agent in Charge of the Federal Bureau of Investigation’s Cleveland office, said: “This sentence is a demonstration that corruption will not be tolerated at any level. While the defendant may not have been an elected official receiving bribes, his role facilitated bribes allowing these corrupt activities to flourish in Cuyahoga County.”

The case was prosecuted by Assistant United States Attorneys Antoinette T. Bacon, Ann C. Rowland and Nancy L. Kelley following an investigation by the Federal Bureau of Investigation and Internal Revenue Service-Criminal Investigation. The case agents were FBI Special Agents R. Michael Massie and Christine C. Oliver and IRS Special Agent Kelly Fatula.

The Cuyahoga County corruption investigation is ongoing.

Marchan Convicted of Paying Bribe Money to Judge Limas

BROWNSVILLE, TX—Ray Roman Marchan has been found guilty on all counts in the FBI’s public corruption investigation of former 404th District Court Judge Abel Corral Limas, United States Attorney Kenneth Magidson announced today. Marchan, 56, of Brownsville, Texas, was found guilty just a short time ago on seven public corruption-related counts after two days of deliberation.

The jury found Marchan, a local attorney, guilty of one count of violation of Racketeer Influenced Corrupt Organizations (RICO) as well as one count of RICO conspiracy, three counts of aiding and abetting extortion under color of official right, and two counts of aiding and abetting honest services mail fraud. Marchan was indicted June 22, 2011, following a three-year investigation of corruption by then sitting judge of the 404th Judicial District Court, Abel Corral Limas.

“The successful prosecution of this case is an example of our strong stand against corruption and dedication to ensure the integrity of our entrusted public officials,” said Magidson. “We respect the jury’s decision and feel the verdict is justified based on the evidence we presented in court.”

During the two-week trial, federal prosecutors presented evidence Marchan paid bribes to Judge Limas. Specifically, the evidence proved he paid bribes or kickbacks to Judge Limas in return for favorable judicial rulings and an appointment as ad litem attorney. An ad litem is appointed to represent the interest of any minor or disabled person in a lawsuit. Evidence proved Marchan received favorable rulings in two cases in which he was appointed as ad litem attorney, Aide Fink vs Sun Valley Dusting and Juan Mancillas vs American General Insurance.

Evidence showed Limas received cash payments totaling $6,200 from Marchan on two occasions shortly after Marchan received ad litem fees on the Mancillas case. On each occasion, evidence showed Marchan had contacted Limas and referenced the transaction. Bank records were also entered as evidence. Limas testified as to the transactions and that the money was in return for having appointed Marchan as the ad litem attorney. He also testified to an earlier incident when he received money from Marchan, but he could not recall the specific amount.

In a third incident, Limas received a $5,000 check on June 27, 2008. An FBI agent testified he observed Limas arrive at Marchan’s office and only spending approximately five minutes there before leaving. Prosecutors presented evidence proving Limas deposited the check shortly thereafter. Limas acknowledged though his testimony the payment was in return for having Limas deny a motion for sanctions filed against Marchan by opposing counsel in the Fink case.

Marchan was also convicted of the two mail fraud counts, which prosecutors proved mail use to carry out the bribe or kickback scheme. An attorney representing Sun Valley Dusting testified regarding one of those charges—the motion for sanctions mailing—and to not knowing Marchan had been having improper communications with Limas on the motion. Federal law makes it a crime for anyone to use the mails in carrying out a scheme to defraud.

Jurors also heard testimony of Limas as well as an FBI special agent concerning the broader Limas investigation involving others already arrested and convicted of aiding and abetting Limas in the corruption as well as of others who also received judicial favors from Limas. To date, a total of eight defendants, including former attorneys Jim Solis and Joe Valle, former Cameron County Investigator Jaime Munivez, Limas’ middleman Manuel Longoria, Armando and Karina Pena, and former bondsman Francisco Cisneros, have entered guilty pleas in relation to the Limas investigation. Limas himself entered guilty pleas to RICO public corruption-related violations and is scheduled to be sentenced August 27, 2012.

U.S. District Judge Andrew S. Hanen, who presided over the Marchan trial, has set sentencing for September 24, 2012, at which time he faces a maximum 20-year prison term and a possible $250,000 fine for each count of conviction. Marchan was allowed to remain on bond pending that sentencing hearing.

The charges in relation to this case are the result of an ongoing three-year investigation being conducted by the FBI, Drug Enforcement Administration, and the Brownsville Police Department. Assistant United States Attorneys Michael Wynne and Oscar Ponce are prosecuting the case.

Former Cuyahoa County Commissioner Jimmy Dimora Convicted of Racketeering

CLEVELAND—A jury convicted former Cuyahoga County, Ohio Commissioner Jimmy Dimora of racketeering, bribery, conspiracy, Hobbs Act conspiracy, tax charges, and other crimes, federal law enforcement officials announced today.

Co-defendant Michael Gabor, 52, of Parma, Ohio, was also convicted of racketeering, conspiracy to commit Hobbs Act extortion, obstruction of justice, and other crimes following a trial before U.S. District Judge Sarah Lioi that lasted nearly two months.

Judge Lioi ordered both men detained.

Dimora, 56, of Independence, Ohio, was convicted on 33 counts, while Gabor was convicted on seven counts.

Fifty people—including two judges, the county auditor, and now a former county commissioner—have now been convicted in the federal investigation into corruption in Cuyahoga County. Cuyahoga County is the largest county in Ohio and includes Cleveland.

Dimora took more than $166,000 worth of bribes in the form of cash, home improvements, lavish meals at high-end restaurants, services from prostitutes, gambling trips to Las Vegas and Canada, and other items, according to testimony.

The bribes were paid in exchange for Dimora’s efforts to steer contracts to allies, get jobs and raises for associates, intercede with judges on pending cases, lobby for grants and favorable loans for people who paid him, and other official actions, according to testimony.

Gabor was convicted for his role in orchestrating a sham election against his then-boss, Cuyahoga County Auditor Frank Russo, paying a cash bribe to get his job and paying a bribe to a domestic relations judge as part of Gabor’s divorce case.

Russo has already pleaded guilty for his role in the conspiracy and has been sentenced to more than 21 years in prison.

The case was prosecuted by Assistant U.S. Attorneys Antoinette T. Bacon, Ann C. Rowland, and Nancy L. Kelley following an investigation by the FBI and Internal Revenue Service (IRS)–Criminal Investigation. The case agents were FBI Special Agents R. Michael Massie and Christine C. Oliver and IRS Special Agent Kelly Fatula.

The Cuyahoga County corruption investigation is ongoing.

Three Jackson Police Officers Indicted for Conspiracy and Bribery

JACKSON, MS—Monyette Quintel Jefferson, 27; Terence Dale Jenkins, 25; and Anthony Ricardo Payne, Jr., 25, all Jackson Police Department Patrol Officers at the time of the offense, have been indicted by a federal grand jury on conspiracy and bribery charges relating to an undercover investigation in which the defendants believed they were protecting drug transactions, U.S. Attorney John Dowdy and FBI Special Agent in Charge Daniel McMullen announced today.

The indictment alleges that from approximately June 2009 through February 2012, the defendants conspired to commit bribery, carrying out their criminal conduct on the following dates:

■June 12, 2009—Jefferson and Jenkins protected what they believed to be a drug shipment and transaction of cocaine, and Jefferson accepted $3,000 in cash.

■March 16, 2010—Jefferson and Payne protected what they believed to be a drug shipment and transaction of cocaine. Jefferson accepted $3,000 in cash, and Payne accepted $1,500 in cash.
■April 20, 2010—Jefferson, Jenkins, and Payne protected what they believed to be a drug shipment and transaction of cocaine, and they each accepted $3,500 in cash.
■June 25, 2010—Jefferson, Jenkins, and Payne protected what they believed to be a drug shipment and transaction of cocaine. Jefferson accepted $6,000 in cash, Jenkins and Payne each accepted $5,000 in cash.

The indictment also charges Jefferson with an additional count of bribery which took place on October 7, 2008, when he accepted $5,000 in cash.

The original affidavit filed last month when the defendants were arrested stated that on June 25, 2010, an undercover FBI agent, posing as a drug dealer, met with Officers Monyette Quintel Jefferson and Anthony Ricardo Payne at Metro Center Mall to discuss their protection of a shipment of cocaine that was coming into Jackson. Later that day, Jefferson arrived at Hawkins Field Airport in Jackson and assisted the undercover FBI agent in removing four suitcases, which Jefferson believed to contain cocaine, from an airplane and into the undercover FBI agent’s vehicle. Jefferson was paid $6,000 for his protection.

The affidavit further stated that, also on June 25, 2010, Officer Terence Dale Jenkins provided protection for what he believed was a drug transaction of approximately 20 kilograms of cocaine between two undercover FBI agents in the parking lot of Hawkins Field Airport. Jenkins was paid $5,000 for protecting the transaction, and then provided further protection by following the second undercover FBI agent from Hawkins Field Airport to Interstate 20. Later that afternoon, another undercover FBI agent arrived at Hawkins Field Airport and simulated the purchase of approximately 20 kilograms of cocaine from the first undercover FBI agent in the presence of Payne and Jefferson. Payne was paid $5,000 for his protection and then provided further protection by following the third undercover FBI agent from Hawkins Field Airport to the Hanging Moss Road area.

Jefferson, Jenkins, and Payne are scheduled to make an initial appearance on March 14, 2012 at 1:30 p.m. before U.S. Magistrate Judge Linda Anderson. If convicted on all six counts of the indictment, Jefferson faces a maximum penalty of 55 years in federal prison and a $1.5 million fine. Jenkins and Payne, each charged in four counts of the indictment, face a maximum penalty of 35 years in prison and a $1 million fine.

The public is reminded that, as in any criminal case, a person is presumed innocent until and unless proven guilty. The charges filed merely contain allegations of criminal conduct.

Three Jackson Police Officers Arrested for Accepting Bribes

JACKSON, MS—Monyette Quintel Jefferson, 27, Terence Dale Jenkins, 25, and Anthony Ricardo Payne, Jr., 25, all Jackson Police Department patrol officers at the time of the offense, have been arrested for accepting bribes to protect what they believed to be drug transactions following an undercover operation, U.S. Attorney John Dowdy and FBI Special Agent in Charge Daniel McMullen announced today.

On June 25, 2010, an undercover FBI agent, posing as a drug dealer, met with Officers Monyette Quintel Jefferson and Anthony Ricardo Payne at Metro Center Mall to discuss their protection of a shipment of cocaine that was coming into Jackson. Later that day, Jefferson arrived at Hawkins Field Airport in Jackson and assisted the undercover FBI agent in removing four suitcases, which Jefferson believed to contain cocaine, from an airplane and into the undercover FBI agent’s vehicle. Jefferson was paid $6,000 for his protection.

Also on June 25, 2010, Officer Terence Dale Jenkins provided protection for what he believed was a drug transaction of approximately 20 kilos of cocaine between two undercover FBI agents in the parking lot of Hawkins Field Airport. Jenkins was paid $5,000 for protecting the transaction, and then provided further protection by following the second undercover FBI agent from Hawkins Field Airport to Interstate 20. Later that afternoon, another undercover FBI agent arrived at Hawkins Field Airport and simulated the purchase of approximately 20 kilos of cocaine from the first undercover FBI agent in the presence of Payne and Jefferson. Payne was paid $5,000 for his protection and then provided further protection by following the third undercover FBI agent from Hawkins Field Airport to the Hanging Moss Road area.

In each instance, the defendants were either in their Jackson Police Department uniform or driving their patrol car.

“It is a reprehensible crime for a police officer to betray the badge. If a police officer chooses to side with criminals they have sworn to protect the public from, they will be prosecuted to the fullest extent of the law. Nothing about these arrests should reflect adversely on law enforcement as a whole. The overwhelming majority of men and women who strap on a badge every day and put their lives on the line are dedicated and honorable,” said U.S. Attorney Dowdy.

Daniel McMullen, Special Agent in Charge of the FBI in Mississippi, stated: “These officers swore to protect and serve the citizens of Jackson and, instead, sought opportunities to enrich themselves at the public’s expense.”

The public is reminded that, as in any criminal case, a person is presumed innocent until and unless proven guilty. The charges filed merely contain allegations of criminal conduct.

Former Rosemead Mayor Agrees to Plead Guilty to Federal Bribery Charges for Taking More Than $10,000 in Payments from Developer

LOS ANGELES—The former mayor of the City of Rosemead was charged today in federal court with soliciting and accepting bribes from a real estate developer in exchange for city approval of a development project.

John Tran, 36, of Rosemead, was named in a criminal information filed this morning. In a plea agreement also filed in United States District Court, Tran has agreed to plead guilty to the felony offense.

According to the plea agreement, a property developer, who is called a cooperating informant (CI) because of information provided to the FBI, made a series of payments to Tran, who first approached the developer at Rosemead City Hall. The developer made cash payments totaling $7,000 in 2005 and 2006, and the developer’s business partner wrote a $3,200 check to Tran in 2007.

“During the time that the CI made payments to defendant, the CI’s planning and building proofs were pending approval before the City,” according to the statement of facts in Tran’s plea agreement. Tran “occasionally informed the CI that the CI’s project was ‘there,’ and that he was ‘not going anywhere.’ Based on the CI’s conversations with defendant, the CI believed that the CI would have to accede to defendant’s bribe demands if the CI wanted the project approved, and that the CI’s project would not be approved if the CI refused to pay defendant.”

After the payments were made, Tran was voted out of office, and the city never approved the project.

Tran was elected to the Rosemead City Council in 2005 and was Mayor of Rosemead from 2007 to 2009.

The charge of bribery carries a statutory maximum sentence of 10 years in federal prison and a fine of $250,000.

Tran is expected to make his initial federal court appearance in this case on February 21.

The case against Tran was investigated by the Federal Bureau of Investigation.

CONTACT:

Assistant United States Attorney Joseph N. Akrotirianakis
Public Corruption and Civil Rights Section
(213) 894-2467

Australian Man Sentenced to 22 Months in Prison for Accepting Payment as Reward for Steering $15 Million in U.S.-Funded Contracts in Afghanistan

Defendant Accepted $10,000 and Sought $190,000

WASHINGTON—A former senior construction manager who worked as an agent for an intergovernmental organization was sentenced today to 22 months in prison for seeking $190,000 in payments as a reward for steering U.S.-funded contracts in Afghanistan.

The sentencing was announced by U.S. Attorney Ronald C. Machen Jr.; Assistant Attorney General Lanny A. Breuer of the Department of Justice’s Criminal Division; U.S. Agency for International Development (USAID) Acting Inspector General Michael G. Carroll; Acting Special Inspector General for Afghanistan Reconstruction (SIGAR) Steven J Trent, and James W. McJunkin, Assistant Director in Charge of the FBI’s Washington Field Office.

Neil P. Campbell, 62, of Queensland, Australia, pleaded guilty in October 2011 in the U.S. District Court for the District of Columbia to one count of accepting an illegal payment as an agent of an organization receiving federal funds. He was sentenced by the Honorable Rosemary M. Collyer Campbell was originally charged on Aug. 19, 2010. He was arrested in New Delhi, India, in October 2010, and extradited to the United States in February 2011. The defendant will get credit toward his sentence for the time he already served.

Campbell also agreed in his plea to forfeiture of $10,000, which represents the illegal payment he received. Upon completion of his prison term, Campbell will be placed on two years of supervised release.

According to court records, beginning in January 2009, Campbell worked in Afghanistan as a contractor and acted as an agent for the International Organization on Migration (IOM). The IOM has received more than $260 million from USAID since 2002 to construct hospitals, schools and other facilities.

Campbell admitted that in July 2010, while in Afghanistan, he solicited a one-time cash payment of $190,000 from a subcontractor in Afghanistan as a reward for funneling more than $15 million in reconstruction projects to that subcontractor to build a hospital and a provincial teaching college. In August 2010, Campbell met an undercover USAID investigator posing as the subcontractor’s representative and accepted a $10,000 cash payment. Campbell counted the money and requested that the remaining funds come to him in one payment. In October 2010, Campbell traveled to New Delhi, India, where he believed he would be receiving the remaining $180,000. He was arrested at the New Delhi International Airport by agents of the Indian Central Bureau of Investigation.

“This Australian citizen was sentenced to 22 months in prison because of his dishonesty and greed,” said U.S. Attorney Machen. “Mr. Campbell tried to extract kickbacks while handing out U.S. taxpayer dollars meant to build a hospital and a school in Afghanistan. His prison sentence should serve as a warning to anyone around the world tempted to divert funds from U.S. contracts for personal gain.”

“Mr. Campbell solicited nearly $200,000 in illegal payments in exchange for steering reconstruction contracts in Afghanistan,” said Assistant Attorney General Breuer. “These crimes undermine the good works of our international organizations. We will not permit corruption to be a tool for gaining U.S.-funded contracts in any part of the world, and we will continue the fight to root our fraud and graft wherever we find them.”

“Today’s sentencing serves an example that anyone who abuses their position by engaging in illegal activities while working on projects funded by USAID will be aggressively investigated and held accountable for their actions,” said Acting Inspector General Carroll.

“Mr. Campbell corrupted the process of awarding contracts to build a hospital and a college in a country in desperate need of both. The message of this case is clear: SIGAR and our investigative partners will bring to justice anyone, from any country, who abuses the U.S. reconstruction mission,” Acting Special Inspector General Trent.

“This case is another example that fraud and corruption will not be tolerated, and those responsible for such illegal acts will be held accountable,” said FBI Assistant Director in Charge McJunkin. “The FBI continues to work with our federal partners to combat corruption and contract fraud against U.S. interests, even if those acts occur on foreign soil.”

The case was prosecuted by Assistant U.S. Attorney Matthew C. Solomon of the District of Columbia and Trial Attorney Ryan S. Faulconer of the Criminal Division’s Fraud Section.

Substantial assistance was provided by former Assistant U.S. Attorney Vasu B. Muthyala, the Department of Justice Criminal Division’s Office of International Affairs, the FBI Legal Attaché and the Judicial Attaché Office in Kabul. The case is being investigated by the USAID Office of Inspector General, the Special Inspector General for Afghanistan Reconstruction, the FBI’s Washington Field Office and members of the International Contract Corruption Task Force (ICCTF).

The ICCTF is a joint law enforcement agency task force that seeks to detect, investigate, and dismantle corruption and contract fraud resulting from U.S. Overseas Contingency Operations worldwide, including in Kuwait, Afghanistan and Iraq.

Former Illinois Governor Rod R. Blagojevich Sentenced to 14 Years in Prison for Corruption in Office

CHICAGO—Former Illinois Gov. Rod R. Blagojevich was sentenced today to 14 years in federal prison following his conviction at trials in 2010 and 2011 on 18 felony counts of corruption during his tenure as governor, including his effort in 2008 to illegally trade the appointment of a United States Senator in exchange for $1.5 million in campaign contributions or other personal benefits. Blagojevich was also sentenced for shaking down the chief executive of a children’s hospital for $25,000 in campaign contributions in exchange for implementing an increase to pediatric reimbursement rates; holding up the signing of a bill to benefit the Illinois horse racing industry in an attempt to illegally obtain $100,000 in campaign contributions; and lying to the FBI in 2005.

Blagojevich, who will turn 55 on Dec. 10, was ordered to surrender to the U.S. Bureau of Prisons on Feb. 16, 2012, to begin serving his sentence. The prison term is the longest-ever imposed on a former governor in the Northern District of Illinois.

“When it is the governor who goes bad, the fabric of Illinois is torn, disfigured and not easily repaired,” U.S. District Judge James Zagel said in imposing the sentence after a two-day hearing. “The harm here is not measured in the value of money or property . . . the harm is the erosion of public trust in government,” he said.

The judge imposed a fine of $20,000 and two years of supervised release after incarceration. Blagojevich also must pay a special assessment of $1,800, or $100 on each count of conviction.

During the sentencing hearing, Judge Zagel agreed with the government that the properly calculated advisory federal sentencing guidelines provided for a sentencing range of 30 years to life. He also agreed with the government that the range was not appropriate within the context of this case, and found an “effective” guideline range of 188 to 235 months in prison, which was proximate to the government’s recommended sentence of 15 to 20 years. The judge further reduced the range to 151 to 188 months after finding that Blagojevich accepted responsibility for his crimes at sentencing.

In sentencing papers, the government contended that “Blagojevich’s criminal activity was serious, extended, and extremely damaging.” The crimes proven at trial were not isolated incidents, but, instead, were part of an approach to public office that Blagojevich adopted from the moment he became governor after he was first elected in 2002 on the heels of gubernatorial corruption and running on a campaign to end “pay-to-play” politics.

“Blagojevich betrayed the trust and faith that Illinois voters placed in him, feeding great public frustration, cynicism and disengagement among citizens. People have the right to expect that their elected leaders will honor the oath they swear to, and this sentence shows that the justice system will stand up to protect their expectations,” said Patrick J. Fitzgerald, United States Attorney for the Northern District of Illinois.

“The sentence handed down today represents a repayment of the debt that Blagojevich owes to the people of Illinois. While promising an open and honest administration, in reality, the former governor oversaw a comprehensive assault on the public’s trust,” said Robert D. Grant, Special Agent in Charge of the Chicago Office of the Federal Bureau of Investigation.

Thomas P. Brady, Inspector in Charge of the U.S. Postal Inspection Service in Chicago, said: “The United States Postal Inspection Service is proud to be one of the federal law enforcement agencies to help ferret out this type of political corruption in Illinois. The Inspection Service is committed to increasing the public’s trust and confidence through our investigations of fraudulent activity. While the sentencing today closes one chapter, we must adhere to a renewed standard of accountability to ensure that the citizens of our state are not victimized by political corruption and greed.”

Alvin Patton, Special Agent in Charge of the Internal Revenue Service Criminal Investigation Division in Chicago, said: “Today’s sentence sends a loud message that public corruption will not be tolerated. The IRS Criminal Investigation Division, together with the U.S. Attorney’s Office and our law enforcement partners, will continue to aggressively pursue violators of the public trust. Regardless of political office or position, no one is above the law.”

James Vanderberg, Special Agent in Charge of the Chicago Regional Office of the U.S. Department of Labor, Office of Inspector General, said: “This sentence sends a clear message that public officials cannot engage in corruption for personal benefit in exchange for political favors.

Blagojevich, a lawyer and former state prosecutor, state legislator, and U.S. Representative, was arrested on Dec. 9, 2008, while serving his second term as governor. He was accused of using his office in numerous matters involving state appointments, business, legislation and pension fund investments to seek or obtain such financial benefits as money, campaign contributions, and employment for himself and others, in exchange for official actions, including trying to leverage his authority to appoint a United States Senator to replace then President-Elect Obama.

Blagojevich went to trial in the summer of 2010 and was convicted of lying to FBI agents when he falsely told them in an interview on March 16, 2005, that he did not track, or want to know, who contributed to him or how much money they contributed to him, but the jury was deadlocked on all remaining counts.

He went to trial again in the spring of 2011 and was convicted on 17 additional counts, including 10 counts of wire fraud, two counts of attempted extortion, two counts of conspiracy to commit extortion, one count of soliciting bribes, and two counts of conspiracy to solicit and accept bribes.

The prosecution was part of Operation Board Games, a public corruption investigation of pay-to-play schemes, including insider-dealing, influence-peddling and kickbacks involving private interests and public duties. The investigation began in 2003 and has resulted in convictions against 15 defendants, including two former chiefs of staff for Blagojevich while he was governor.

The government is being represented in the Blagojevich case by Assistant U.S. Attorneys Reid Schar, Carrie Hamilton and Christopher Niewoehner.

Chief of Staff to NY State Assemblyman Charged with Bribery and Hobbs Act Extortion Conspiracy

Loretta E. Lynch, United States Attorney for the Eastern District of New York, and Janice K. Fedarcyk, Assistant Director in Charge of the New York Office of the Federal Bureau of Investigation, today announced the unsealing of a complaint charging Ryan N. Hermon, chief of staff for New York State Assemblyman William F. Boyland, Jr., with bribery and conspiracy to solicit more than $250,000 in exchange for performing official acts for the bribe payers.1 Hermon was arrested today and is scheduled to be arraigned this afternoon before United States Magistrate Judge Robert M. Levy, at the U.S. Courthouse, 225 Cadman Plaza East, Brooklyn, New York.

The criminal complaint alleges the following:

Between August 2010 and August 2011, Hermon, Assemblyman Boyland and others conspired to solicit and accept bribes from a carnival promoter (“CW”) and two undercover FBI agents (“UC1” and “UC2”), whom they believed to be out-of-state businessmen and real estate developers, in exchange for taking official action to secure business opportunities for CW, UC1 and UC2. Hermon is also charged with bribery for soliciting and accepting several thousand dollars in cash bribes from UC1 in exchange for taking official actions as opportunities arose on behalf of CW’s carnivals.

Carnival Scheme: Hermon Solicits and Takes Approximately $2,000 in Cash Bribes

Starting in August 2010, Assemblyman Boyland agreed to assist CW and UC1 with CW’s carnival business.2 In February 2011, Hermon told UC1 during a recorded conversation that she had become a member of the “team” assigned to work on CW’s carnivals.

On February 24, 2011, CW met with Hermon and another member of Assemblyman Boyland’s staff to discuss what CW needed from Assemblyman Boyland’s office. At the recorded meeting, Hermon asked CW whether she would be paid for her work: “[W]e are not making any money. Are we getting some money for this?” When the CW responded affirmatively, Hermon asked: “Are we getting money or are you giving it to my boss?” She then stated, “[M]y check can go to my business needs.”

On February 27, 2011, Hermon solicited and took a $1,000 cash bribe from UC1 at a restaurant in Manhattan. During the recorded meeting, UC1 and Hermon discussed what UC1 and CW needed from Assemblyman Boyland’s office for the carnivals. UC1 suggested that a call from Hermon to government officials would carry “more weight” than calls from other staffers. Hermon agreed, stating, “Absolutely, it does.”

During this meeting Hermon again indicated to UC1 that she was interested in being paid for her work, stating, “I wouldn’t mind, you know, eating some steak or potatoes.” UC1 offered to give Hermon a “down payment,” which Hermon enthusiastically accepted. An excerpt of the conversation follows:

UC1: I can even make a down payment today if you like, or check or cash or whatever you like.

HERMON: I would love that.
UC1: Okay, good.
HERMON: Are you serious?
UC1: Yeah, oh yeah. I come prepared for all–
HERMON: Oh my God!
UC1: I come prepared for all contingencies.
HERMON: You just, like, made me hot.

At the end of the lunch, UC1 paid HERMON $1,000 in cash.

On or about March 8, 2011, CW met with Hermon at Assemblyman Boyland’s district office. Hermon gave CW five signed letters that she had prepared. The letters were written on Assemblyman Boyland’s official letterhead and expressed Assemblyman Boyland’s support for CW and the carnivals that CW purported to be promoting.

On or about March 31, 2011, Hermon solicited and accepted another $1,000 cash bribe from UC1 in his car. During the recorded meeting, Hermon told UC1 that she was sharing the money she received from UC1 with other staffers in Assemblyman Boyland’s office. Hermon told UC1 that as a result of the bribes, he was receiving better service from the staffers: “[T]he staff, when I come in and say well [UC1] needs this, dah dah dah did dah. They’re jumping ‘cause they know, like I’m, they’re gonna get something or they got something.”

Conspiracy to Solicit Over $250,000 for Official Action and Influence

Assemblyman Boyland was charged with bribery in a separate case in the Southern District of New York on March 10, 2011.3

On or about March 22, 2011, during a recorded telephone conversation, Hermon informed UC1 that she was calling on Assemblyman Boyland’s behalf to “see if you can actually help him financially with, you know, retaining an attorney, he needs some cash and he’s cash strapped. . . . [T]hat’s exactly what he’s calling about.” Hermon then informed UC1 that the amount Assemblyman Boyland needed was $7,000.

On or about March 25, 2011, UC1 met Assemblyman Boyland at his district office in Brooklyn. During that meeting, which was recorded by UC1, Assemblyman Boyland and UC1 discussed real estate development projects in Assemblyman Boyland’s district that Assemblyman Boyland had previously discussed with UC1 and UC2. UC1 made clear that the money he was going to give Assemblyman Boyland was coming from both him and UC2, and in response, Assemblyman Boyland stated, “We’ll do business.” UC1 then told Assemblyman Boyland that he and UC2 wanted state grant monies to help finance the proposed development projects. Assemblyman Boyland assured UC1 that the money was there and stated that his support was a “no brainer” because the projects are “right here at home.”

At the end of the meeting, UC1 gave Assemblyman Boyland the $7,000 in cash, and stated: “Knowing that if you think you want to bring someone else onboard or knowing that you’ll be there politically for us is all that we’re looking for.” In response, Assemblyman Boyland made a “thumbs up” sign and affirmed that “the political thing will be fine in terms of just where we need to go because I’m thinking environmental and I’m thinking the two houses of the state and city. You know, the relationships are there.”

On or about April 29, 2011, during a recorded conversation in a hotel suite in Atlantic City, New Jersey, Assemblyman Boyland solicited a $250,000 bribe from UC1 and UC2. Assemblyman Boyland proposed a scheme which called for UC1 and UC2 to purchase a former hospital in Assemblyman Boyland’s district for $8 million, obtain state grant money to renovate the hospital, and resell it to a non-profit organization that Assemblyman Boyland claimed to control for $15 million. In exchange for the $250,000, Assemblyman Boyland promised that he would, among other things, arrange for the sale and take official action and use his influence to secure state grant money to allow UC1 and UC2 to renovate the hospital so that it could be sold to Assemblyman Boyland’s organization for a profit.

Starting in May 2011, Hermon and UC1 had multiple recorded conversations about the hospital deal and the $250,000 bribe. During one meeting, Hermon told UC1 that Assemblyman Boyland had informed her that UC1 and UC2 had agreed to pay Assemblyman Boyland the $250,000. UC1 responded that he and UC2 had not agreed to pay the money yet, but stated that “it’s not an issue if, if uh we start to move in our direction.” Hermon stated that the hospital deal was “doable,” that she had been “on the phone with a state representative hearing about their enthusiasm about the project,” and that Assemblyman Boyland “definitely has state support.” In a later telephone conversation, Hermon told UC1 that “just like the carnival, I’m just being put onto this [hospital] project,” and stated that she had attended meetings about the project and set up a meeting for Assemblyman Boyland with a state agency about it. In discussing the project, she stated that Assemblyman Boyland “has the power ‘cause of the fact that it’s state, that’s one, and he’s a state Assemblyman. Also, he has power because he, it’s in his district. And he has the relationships on the state level . . . .”

On or about May 27, 2011, Assemblyman Boyland, Hermon and an individual whom Assemblyman Boyland described as a “developer” met with UC2 and took him on a site tour of the hospital.

On or about June 7, 2011, in a recorded meeting, Hermon told UC1 that Assemblyman Boyland did not want her to continue her efforts to set up meetings between UC1 and other elected officials and that Assemblyman Boyland wanted “them” to stay in the background. Later that day, UC1, UC2 and Assemblyman Boyland met in a hotel room in Manhattan. During a recorded conversation, Assemblyman Boyland renewed his request for $250,000 in connection with the hospital project.

On or about June 28, 2011, Hermon explained to UC1 during a recorded telephone call that Assemblyman Boyland had not placed a planned call to UC1 because he had been questioned by law enforcement about “his role with the hospital.”

“Ryan Hermon’s job was to provide aid and assistance to her community. Instead, she allegedly used her position to help herself, trading her influence and energy for personal gain. The charged conduct is an affront to the people of New York,” stated United States Attorney Lynch. “Staffers who sell the public’s trust are on notice that they will be held to account for their criminal activities.” Ms. Lynch stated that the government’s investigation is continuing.

FBI Assistant Director in Charge Fedarcyk stated, “Ms. Hermon’s responsibility to the public was pushed aside. Apparently, her concept of her job included conspiring with her boss to solicit and take bribes. Every instance of public corruption undermines public confidence, and every instance will be vigorously policed by the FBI.”

If convicted, Hermon faces a maximum sentence of 20 years in prison.

The government’s case is being prosecuted by Assistant United States Attorneys Roger Burlingame, Carolyn Pokorny and Lan Nguyen.

The Defendant:

RYAN N. HERMON
 Age: 33

1 The charges contained in the complaint are merely allegations, and the defendant is presumed innocent unless and until proven guilty.

2 As detailed more fully in the complaint, to obtain the permissions and/or permits necessary to operate carnivals in New York City, carnival businesses must obtain the support of local community boards and elected officials.
3 Boyland was acquitted of those charges on November 10, 2011.