C. RAY NAGIN, FORMER NEW ORLEANS MAYOR, CONVICTED ON FEDERAL BRIBERY, HONEST SERVICES WIRE FRAUD, MONEY LAUNDERING, CONSPIRACY, AND TAX CHARGES
C. RAY NAGIN, 57, a resident of Frisco, Texas, and formerly the Mayor of New Orleans, was convicted in federal court today on 20 of 21 charges, announced U.S. Attorney Kenneth Allen Polite, Jr., FBI Special Agent-in-Charge Michael Anderson, and IRS Criminal Investigation Special Agent-in-Charge Gabriel Grchan. NAGIN was found not guilty on Count 7, a bribery charge.
According to evidence adduced at trial, between December 2004 and the present, NAGIN and several others participated in a conspiracy to commit bribery and honest services wire fraud. Evidence produced at trial showed that NAGIN, in his role as chief executive, devised a scheme to defraud the City of New Orleans and its citizens of his honest services through bribery and a kickback scheme, whereby NAGIN used his public office and official capacity to provide favorable treatment, including awarding contracts, that benefitted business and financial interest of individuals providing him with bribes and kickbacks in the form of checks, cash, granite inventory, wire transfers, personal services, and free travel.
According to court documents, in January 2005, NAGIN created Stone Age LLC, a granite company based in New Orleans. Evidence produced at trial showed, among other things, that NAGIN accepted approximately $62,250 in bribes from Rodney Williams and his company, Three Fold Consultants, LLC. Evidence also showed that NAGIN accepted bribes from Frank Fradella, including $50,000, granite inventory, and nine payoffs in the form of wire transfers from Fradella totaling $112,500. In some cases, money was deposited into NAGIN=s Stone Age corporate account, or free granite inventory was provided to Stone Age.
In addition, trial evidence proved that NAGIN participated in a money laundering conspiracy and filed false tax returns for the years 2005 to 2008.
"Our public servants pledge to provide honest services to the people of Southeast Louisiana. We are committed to bringing any politician who violates that obligation to justice," stated United States Attorney Kenneth Allen Polite, Jr.
"The tireless efforts of the investigative and prosecution team, exceeding 5 years, yielded the just and fair result in holding former Mayor Nagin fully accountable for serving his own personal interests well above those of the city at a time when it needed leadership, integrity and honest dealings the most," stated Michael Anderson, Special Agent in Charged for the FBI New Orleans Field Office.
“The investigation and subsequent prosecution of former Mayor, C. Ray Nagin, and his co-conspirators represents the closing of a dark chapter in the history of this great city. While most people were working to rebuild after Hurricane Katrina these individuals were conspiring to benefit themselves at the expense of the citizens that elected them” stated Gabriel L. Grchan, Special Agent in Charge of IRS Criminal Investigation. “Special Agents of IRS Criminal Investigation are elite financial investigators and will continue to lend our expertise to this and other task forces to ensure that those elected to public service do just that—serve the public, not contrive backroom deals to get themselves, and their family, private jet trips around the world or secure their family-owned businesses coveted contracts. It also sends a reminder to everyone that all income, legal and illegal, must be reported to the Internal Revenue Service. Know that we, with our federal law enforcement partners, will continue to ensure that all Americans, including public officials, are held to the same standard. No one is above the law.”
“The New Orleans Office of Inspector General congratulates our federal partners in the successful prosecution of the former mayor. OIG involvement in the case dates to 2009 when an evaluation led to a joint investigation of Greg Meffert. The OIG will continue to protect the City from those who would defraud it,” stated Ed Quatrevaux, Inspector General, City of New Orleans.
"The road to former Mayor Ray Nagin's conviction began with one phone call from a courageous citizen,” stated Rafael C. Goyeneche III, President of the Metropolitan Crime Commission. “That citizen told the MCC about shipments of granite from Florida by the truckload to the Nagin family business in New Orleans. It was only one piece of a corrupt puzzle but when placed in the hands of the FBI and the U.S. Attorney's office the pieces grew one by one into a sprawling picture of corruption and betrayal."
NAGIN faces the following terms of imprisonment:
- Count 1 (Conspiracy to commit bribery and honest services wire fraud), statutory penalties of up to five years in prison, a $250,000 fine and three years of supervised release;
- Counts 2-6 (Accepting a bribe), statutory penalties of up to 10 years in prison, a $250,000 fine and three years of supervised release on each count;
- Counts 8-16 (Accepting payoffs that caused interstate wire communications to occur between Louisiana and other states), statutory penalties of up to 20 years in prison, a $250,000 fine and three years of supervised release on each count;
- Count 17 (Conspiracy to commit money laundering) statutory penalties of up to 10 years in prison, a $250,000 fine and three years of supervised release; and
- Counts 18-21 (Filing false tax returns for years 2005 through 2008), statutory penalties of up to three years in prison, a $100,000 fine and three years of supervised release on each count.
The case was investigated by the Federal Bureau of Investigation, the Internal Revenue Service, Criminal Investigation Division and the New Orleans Office of Inspector General. U. S. Attorney Polite would also like to acknowledge the assistance provided by the New Orleans Inspector General=s Office and the Metropolitan Crime Commission. The case is being prosecuted by Assistant U. S. Attorneys Matthew M. Coman, Richard R. Pickens, II and Matthew S. Chester.
If you believe you have been a victim of fraud from a person or an organization soliciting relief funds on behalf of storm victims or have knowledge of waste, abuse, or allegations of mismanagement involving disaster relief operations, contact the National Center for Disaster Fraud toll free at: (866) 720-5721. You can also fax information to: (225) 334-4707 or e-mail it to: firstname.lastname@example.org