Program Counsel, NAGTRI Center for Ethics and Public IntegrityCoeditor, The Anticorruption Manual
This compendium of news reports about corruption and ethics issues is brought to you by the Center for Ethics and Public Integrity (CEPI). Neither the National Association of Attorneys General nor the National Attorneys General Training & Research Institute expresses a view as to the accuracy of news accounts, nor as to the position expounded by the authors of the hyperlinked articles.
2022 NAGTRI National Anticorruption Academy: The NAGTRI Center for Ethics & Public Integrity is pleased to partner with New York Law School in hosting a week-long Anticorruption Academy in New York, New York from October 24-28, 2022. The Academy will provide prosecutors and law enforcement officers with essential tools to investigate, charge, and try corruption cases. From explaining legal concepts like legislative immunity and judicial privilege, to teaching about financial investigations, to addressing ethical issues that may arise in corruption cases, the Academy will address the needs of both new and seasoned corruption fighters. While we encourage in-person attendance, we are also offering a live-streamed, virtual version of the program. The Anticorruption Academy will feature presentations by current and former prosecutors, including from the U.S. Department of Justice Money Laundering and Asset Recovery Section, and by academics, including members of the New York Law School faculty and administration. Attendees will receive a copy of The Anticorruption Manual: A Guide for State Prosecutors, a comprehensive guide to investigating, charging, and trying corruption cases, which retails for $125. Please contact Maria Humayun at firstname.lastname@example.org if you have any questions.
The Anticorruption Manual: A Guide for State Prosecutors: CEPI’s comprehensive Anticorruption Manual was published in August 2021. This is the first publication in thirty years to guide prosecutors who investigate and charge public corruption crimes. It is the first-ever book designed to address the needs of state and local corruption prosecutors. The book is available for purchase; members of the attorney general community should log into to their NAAG accounts to access a discount code, and other prosecutors should email Zayn Hasan at email@example.com for their discount code. A free sample chapter addressing judicial corruption is available for download. A series of articles further describes the purpose and contents of the manual.
Former Covington Manager Allison Donaldson Indicted by Federal Grand Jury for Theft of Over $150k: Allison Donaldson, former administrative manager for the public works department in Covington, Kentucky, was indicted by a federal grand jury on charges of wire fraud and aggravated identity theft for allegedly using the public works department’s employee credit cards to make over $150,000 in personal purchases. Donaldson used fake receipts to conceal that she spent the funds on personal purchases. The indictment is the result of an investigation by the Kentucky Attorney General’s Office, the U.S. Attorney’s Office for the Eastern District of Kentucky, the FBI, and the Kenton County Police Department.
Ex-Mississippi Welfare Leader to Plead Guilty on Federal, State Charges in Exchange for Cooperation: John Davis, the former Mississippi Department of Human Services director, pleaded guilty to multiple federal and state charges relating to misuse of welfare funds as part of a global plea resolution. Davis has agreed to cooperate with state and federal authorities in investigations of other potential defendants involved in the criminal misuse of federal Temporary Assistance for Needy Families (TANF) grant funds or State of Mississippi funds. Davis pleaded guilty to state charges of five counts of conspiracy and thirteen counts of fraud against the government as well as two federal charges of conspiracy and theft from programs receiving federal funds. The charges relate to Davis’s role in a wide-ranging scheme to misuse over $77 million in welfare funds, including paying $1.1 million in TANF funds to retired NFL quarterback Brett Favre for speeches that never happened. The money paid to Favre went through the Mississippi Community Education Center, which was led by Nancy New and her son Zach New, who pleaded guilty to multiple charges earlier this year. The state case is being prosecuted by the Hinds County District Attorney’s Office. Anticorruption Academy speaker Howard Master shared his take on the case with a media outlet.
Corrections Officer Smuggled Cold Cuts, Jewelry into N.J. Prison for Bribes, Officials Say: Werner Gramajo, a corrections officer at a New Jersey prison, has been charged with official misconduct, bribery, conspiracy, and tampering with public records. Gramajo allegedly accepted $500 per month in bribes in exchange for smuggling cash, jewelry, cologne, cold cuts, and espresso into the prison for an inmate. Gramajo has been suspended without pay. The case is being prosecuted by the New Jersey Attorney General’s Office, Office of Public Integrity and Accountability (OPIA). OPIA’s Director, Tom Eicher, and Deputy Director, Tony Picione, will be speaking at the Anticorruption Academy.
14 Officers, Including Top Official, Indicted Over Violent Attack, Coverup at Edna Mahan, N.J. Women’s Prison: Fourteen former corrections officers at the Edna Mahan Correctional Facility in Clinton, New Jersey, including the acting administrator, were indicted on charges of conspiracy, official misconduct, aggravated assault, and tampering with public records. The charges are based on an incident known as a “forced extraction” that occurred at the prison in 2021. During the incident, teams of officers in riot gear entered the restorative housing unit and forcibly removed prisoners. Administrators and medical staff were present during the extraction. The officers indicted are Sean St. Paul, Ryan Valentin, Eddie Molina, Amir Bethea, Andraia Bridges, Anthony Valvano, Brandon Burgos, Luis Garcia, Courey James, Jose Irizarry, Desiree Lewis, Gustavo Sarmiento, Marika Sprow, and Tara Wallace. The state plans to close the facility. The case is being prosecuted by OPIA at the New Jersey Attorney General’s Office.
Former New York State Supreme Court Justice John Michalek Sentenced in Connection to Bribery Scheme: Former New York State Supreme Court Justice John Michalek was sentenced to one year in jail on a conviction for receiving a bribe and four months in jail on a conviction for offering a false instrument. Michalek was first sentenced in July, but was released and the sentence was stayed pending a further hearing in September, which has now occurred. Michalek pleaded guilty to the two felony charges in June 2016. Documents showed that Michalek appointed a receiver requested by co-conspirator Steven Pigeon in exchange for bribes from Pigeon. The case was prosecuted by the New York Attorney General’s Office. This case is discussed in an Anticorruption Manual chapter by Anticorruption Academy speaker Dan Cort, who is now First Deputy Commissioner at the New York City Department of Investigation. Michalek is represented by Carrie Cohen, who will also be speaking about the defense of public corruption cases at the Anticorruption Academy.
Steve Bannon Charged with Money Laundering, Conspiracy: Steve Bannon, political strategist, was indicted on charges of money laundering, conspiracy, and scheme to defraud based on Bannon’s role in a group called We Build the Wall. That group raised at least $15 million to build a wall along the southern border of the United States and publicly stated to donors that its president and CEO, Brian Kolfage, would not be compensated for his work. However, Bannon allegedly arranged to pay Kolfage by funneling money from We Build the Wall through a company Bannon controlled. Kolfage has already pleaded guilty in two related federal cases to charges of conspiracy to commit wire fraud and tax and wire fraud. Bannon was also charged in the related federal case, but was granted a presidential pardon for any federal crimes in January 2021. This case is being prosecuted by the New York Attorney General’s Office in partnership with the Manhattan District Attorney’s Office. Several prosecutors overseeing this investigation will be speaking at the Anticorruption Academy.
Former Craighead County Clerk Sentenced to 57 Months for Defrauding County, Must Repay $1.5M: Jacob Kade Holliday, a former clerk in Craighead County, Arkansas, was sentenced to 57 months in prison for diverting more than $1.5 million in county funds to his personal use. Holliday was indicted in 2020 on 11 counts of wire fraud and pleaded guilty to one count of wire fraud. Holliday took the money in order to support two restaurant businesses he owned.
Former USC Dean Pleads Guilty to Bribery Charges in Mark Ridley-Thomas Corruption Case: Marilyn Louise Flynn, former dean of the school of social work at the University of Southern California (USC), pleaded guilty to one count of bribery and admitted that she bribed Mark Ridley-Thomas, a Los Angeles city councilmember, by funneling $100,000 he provided from his campaign account through USC to a nonprofit operated by his son in exchange for receiving a county contract. In 2018, the social work school had a multimillion-dollar budget deficit and was seeking an amendment to an existing contract it had with the Los Angeles County Department of Mental Health. To obtain the amendment, Flynn was seeking a meeting with a high-level county official. Ridley-Thomas knew of Flynn’s objectives and asked Flynn to use USC as a conduit for Ridley-Thomas’s campaign to make a $100,000 payment to his son’s nonprofit organization, which urgently needed funding. Flynn carried out the payment and concealed from USC officials the connection between the money received from Ridley-Thomas and the money paid to his son. After the payment was complete, Ridley-Thomas facilitated a meeting with the county official responsible for the amendment and voted in favor of the amendment, which was expected to generate about $9 million a year for the USC school of social work.
Former U.S. Department of Housing and Urban Development Assistant Inspector General Convicted of Falsifying Financial Disclosure Forms: Eghbal “Eddie” Saffarinia, former assistant inspector general at the federal Housing and Urban Development Department in the District of Columbia, was convicted at trial of one count of concealing material facts, three counts of making false statements, and three counts of falsifying a record or document. Saffarinia steered government contracts to the company of a friend while receiving $80,000 in payments and loans from that friend. Saffarinia also disclosed confidential government information to that friend and did not properly disclose his financial relationship with that friend. Saffarinia had been indicted in 2019.
Former Defense Attorney Gets 6 Months for Bribery Scheme: Ernest Maloney Page IV, a former criminal defense attorney, was sentenced to six months in prison after pleading guilty in 2020 to conspiracy to commit bribery. In 2017, the then-elected State Attorney for the Third Judicial Circuit of Florida, Jeffrey Siegmeister, told Page that he would dismiss two DUI charges for Page’s client in exchange for a $20,000 discount on a tractor Siegmeister wanted to buy from the client’s dealership. Siegmeister did buy the discounted tractor and the client pleaded guilty to reckless driving with alcohol and refusal to submit to a blood alcohol test. Siegmeister has already pleaded guilty to conspiracy to use a facility of commerce for unlawful activity, conspiracy to commit extortion, wire fraud, and filing a false tax return, but has not yet been sentenced.
Mitzi Bickers Sentenced to 14 Years in City Hall Bribery Case: Mitzi Bickers, former city official in Atlanta, Georgia, was sentenced to 14 years in prison for participating in a pay-for-play public contract scheme. Bickers was tried and convicted in March of conspiracy to commit bribery, money laundering, wire fraud, and tax evasion. Bickers used her influence to steer public construction contracts to specific contractors, Elvin R. Mitchell Jr. and Charles P. Richards Jr., in exchange for a portion of the proceeds. Bickers personally gained over $2 million in such kickbacks and deposited the funds in multiple different banks, with each deposit just under the $10,000 reporting requirement threshold. Mitchell and Richards both pleaded guilty in 2017: Mitchell to conspiratorial bribery and money laundering and Richards to conspiratorial bribery.
Maui Bribery Case: Milton Choy and Stewart Stant Plead Guilty: Stewart Stant, former director of the Maui Department of Environmental Management in Hawaii, and Milton Choy, a businessman, both pleaded guilty to charges relating to a bribery scheme in which Choy paid Stant bribes in exchange for steering contracts to Choy’s company. Stant pleaded guilty to one count of honest services wire fraud and Choy pleaded guilty to bribery of a government official. Stant accepted bribes from Choy totaling up to $2 million in cash, bank deposits, casino chips, travel, and other gifts. In exchange, Stant awarded over $19 million dollars in contracts to Choy’s company. In addition to bribing Stant, Choy was reportedly the businessman who bribed Hawaii state officials Ty Cullen and J. Kalani English, who pleaded guilty to wire fraud in February.
Political Operative Tied to Ald. Daniel Solis Probe Pleads Guilty to Fraud: Roberto Caldero, a political consultant, pleaded guilty to wire fraud for offering and arranging for bribes to a City of Chicago (Illinois) alderman and Chicago Public Schools employee. Caldero provided benefits such as campaign contributions, future employment, discounted event space, and admission to a benefit event in exchange for favorable official actions for Caldero’s clients who were seeking a contract with the Chicago Public Schools, an honorary street name designation, and renaming of a park.
N.J. Sergeant Gets 33 Months in Prison for Helping Corrupt Cops Steal from Residents: Michael Cheff, a former police sergeant in Paterson, New Jersey, was sentenced to 33 months in prison following his trial and conviction on charges of conspiring to deprive an individual of civil rights and falsifying a police report. At trial, the prosecution’s case relied on testimony from other officers that Cheff supervised. The group called themselves the “robbery squad” because they repeatedly sought out opportunities to steal from private individuals. Matthew Torres, Jonathan Bustios, Daniel Pent, Frank Toledo, and Eudy Ramos pleaded guilty to their roles in the stealing and testified against Cheff. Cheff approved false police reports, logged fabricated evidence, accepted kickbacks, and thwarted citizen complaints against the officers.
Rensselaer County’s Elections Commissioner Arrested for Fraud: Jason Schofield, an elections commissioner for Rensselaer County Board of Elections in New York, was indicted on charges of fraudulently obtaining and filing absentee ballots using personal information of at least eight voters without their permission. Schofield applied for the ballots using names of people who later said they had no intention to vote in the 2021 election, did not request absentee ballots, and did not know that Schofield was obtaining ballots using their names. In some instances, Schofield brought the ballots to the voters to sign so that Schofield or another person could fill in the ballot later.
Spring Lake’s Former Finance Director Pleads Guilty to Embezzlement, Identity Theft: Gay Cameron Tucker, the former finance director of Spring Lake, North Carolina, pleaded guilty to one count of embezzlement from a local government receiving federal funds and one count of aggravated identity theft. Tucker used her authority and access to the town’s bank accounts to write checks to herself, forging signatures of other town officials, and used the funds for personal expenses. The thefts occurred from 2016 to 2021. Spring Lake’s finances are now under supervision of the North Carolina Local Government Commission.
Ex-Puerto Rico Legislator Sentenced in Kickback Scheme: Nelson del Valle Colon, a former Puerto Rico legislator, was sentenced to four years and nine months in prison after pleading guilty to federal program bribery earlier this year. Del Valle Colon hired a mother and daughter to work in his legislative office. In exchange for the hiring and salaries, Del Valle Colon received kickbacks every two weeks from 2017 to 2020. In addition to prison time, Del Valle Colon was ordered to pay $190,000 in restitution.
Ex-WA State Employee Gets 5 Years for Pandemic Fraud of Jobless Claims: Reyes De La Cruz III, a former employee of the Washington State Employment Security Department was sentenced to five years in prison for carrying out a fraud and kickback scheme and stealing $360,000 in pandemic-related public benefits resulting in personal enrichment of at least $130,000. De La Cruz was an intake agent assigned in April 2020 to help the state administer pandemic unemployment benefits. De La Cruz exploited his access to the claims database in multiple ways, including soliciting bribes for securing benefit payments and demanding kickbacks for manipulating the database to generate illegitimate retroactive lump sum payments. In June 2022, De La Cruz pleaded guilty to wire fraud, bribery of an agent receiving federal funds, and aggravated identity theft.
Judge in Florida School Shooter Case Refuses to Step Down: Florida Circuit Judge Elizabeth Scherer denied a motion to disqualify her from continuing as the judge in Nikolas Cruz’s penalty trial. The motion to disqualify was made by the Broward Public Defender’s Office, representing Cruz, two days after the defense rested, unexpectedly calling far fewer witnesses than they had previewed for the judge and prosecution. After the defense rested, Scherer commented that the defense’s approach was “the most uncalled for, unprofessional way to try a case” and engaged in a heated exchange with the lead defense attorney, Melisa McNeill, without the jury present. After the jury entered the courtroom, Scherer reportedly stated that if she had known the defense would be resting its case, she would not have brought the jury in, then later told the jury they should blame her for any delays. The defense motion questioned the judge’s impartiality and the effect on the jury, but the judge denied the motion.
District Attorney Eric Sparr Requests Special Prosecutor in Oshkosh Boat Crash, Cites ‘Appearance’ of Conflict of Interest: In Wisconsin, the Winnebago County District Attorney Eric Sparr requested a special prosecutor to investigate a boat collision case. Two people in the district attorney’s office know the suspect socially and rumors circulating online about who was on the boat at the time of the collision have created the appearance of a conflict, even if the actual conflict could be managed by walling off the individuals with a personal relationship to the suspect. The Wisconsin Department of Justice is assuming responsibility for the prosecution.
Brazil’s Gol Airline to Pay $41 Million to Settle Bribery Charges: Brazilian airline GOL Linhas Aéreas Inteligentes SA will pay more than $41 million to resolve parallel bribery investigations by criminal and civil authorities in the United States and Brazil. GOL entered into a three-year deferred prosecution agreement (DPA) with the U.S. Department of Justice to resolve a charge that the company conspired to violate the anti-bribery and books and records provisions of the Foreign Corrupt Practices Act. GOL paid $3.8 million in bribes to foreign officials in Brazil in exchange for legislation favorable to GOL in terms of tax reductions. GOL made and concealed the bribes by creating fraudulent contracts with vendors and falsely recording the payments in their books. Under the DPA, GOL will cooperate with the DOJ and will enhance its compliance program, as well as paying a criminal penalty of $17 million and a civil penalty of $24.5 million to the U.S. Securities and Exchange Commission.
Chinese Couple Arrested and Accused of Trying to Establish Mini-State in the US-Defended Marshall Islands: Cary Yan and Gina Zhou, were indicted on charges of conspiring to violate the Foreign Corrupt Practices Act, violating the FCPA, conspiring to commit money laundering, and committing money laundering. Yan and Zhou allegedly bribed Marshall Islands government officials to pass legislation that would benefit Yan and Zhou’s business interests, including allowing the couple to establish an autonomous mini-state in the Marshall Islands. Yan and Zhou carried out the alleged scheme while in New York, New York, and other locations within the United States. Yan and Zhou are not U.S. citizens. They were arrested in Thailand and were extradited to the United States.
Venezuela Arrests ‘Fat Leonard’ Contractor in U.S. Navy Bribery Case: A Malaysian defense contractor, Leonard Glenn Francis, known as “Fat Leonard,” removed his ankle monitor and fled house arrest three weeks before he was due to be sentenced. Francis pleaded guilty in 2015 to bribery and fraud charges, admitting that he carried out a decade-long conspiracy involving many U.S. Navy officials and the exchange of tens of millions of dollars in public contracts and classified information for millions of dollars in bribes and gifts to those officials. Francis was on house arrest with private security guards in San Diego, California, because he was in poor health and required medical care. Venezuelan police arrested Francis under a red notice at the country’s main international airport. Francis arrived in Venezuela from Mexico by way of Cuba and was planning to continue to Russia.
Republican DA Says She Welcomes Investigation After Criticism from Fresno Democrats: Fresno County (California) District Attorney Lisa Smittcamp, a Republican, defended the work of her office’s Public Integrity Unit and welcomed an investigation into it. Fresno Democrats had accused her of using her Public Integrity Unit for political purposes. Smittcamp asserted that the Public Integrity Unit’s mission is to investigate and prosecute cases involving public officials or employees who commit crimes relating to their official duties. Smittcamp noted that the Fresno County District Attorney’s Office has noticed an increase in the use of the unit complaint process to make political attacks. Smittcamp stated that the unit makes filing decisions based solely on facts and law and operates independent of partisan politics.
With New Guidance and Expertise, the DOJ Mounts ‘Compliance Surge’: U.S. Deputy Attorney General Lisa Monaco issued a memo and made remarks regarding measures the U.S. Department of Justice is taking to prioritize and prosecute corporate crime. Areas of focus are individual accountability, corporate accountability (including history of misconduct, voluntary disclosure, cooperation, and compliance programs), the use of compliance monitors, and transparency in the DOJ’s corporate criminal enforcement priorities and processes.
Court Can’t Compel Examination of Juror’s Electronic Devices to Look for Misconduct, 6th Circuit Rules: The Sixth Circuit Court of Appeals ruled that a district court cannot order jurors to surrender their personal electronic devices or to divulge their passwords for forensic examination to determine if extraneous information or contact adversely affected the jury. In Remmer v. United States, 347 U.S. 227, 229-30 (1954), the Supreme Court held that, under the Sixth Amendment right to a fair trial, unauthorized invasions on jury proceedings may require a trial court to hold a hearing to determine the circumstances of the invasion, any impact on the jurors, and any resulting prejudice. This is known as a Remmer hearing. In the corruption case against Alexander “P.G.” Sittenfeld, a former Cincinnati City Council member, a juror had been posting to her private social media page throughout the trial. When the defense learned of the social media posts and learned that they had been deleted, the defense moved to compel a forensic examination of the juror’s devices. The district court denied the motion because it found no basis to believe the juror was prejudiced by any extraneous information. The Sixth Circuit framed the issue as the extent of a court’s authority over a juror and ruled that a district court has inherent power to hold a Remmer hearing, but not to investigate a juror’s personal affairs or to search a juror’s belongings.