Department of Justice Seal

FOR IMMEDIATE RELEASE

CRM

WEDNESDAY, SEPTEMBER 15, 1999

(202) 616-2777

WWW.USDOJ.GOV

TDD (202) 514-1888


NEW JERSEY BUSINESSMAN CHARGED IN CAMPAIGN FINANCING CASE


WASHINGTON, D.C. -- Lawrence Penna, the former President of a now-defunct New Jersey securities firm, was charged today with violating federal election laws by funneling illegal campaign contributions to the 1996 federal election campaigns of President Clinton and a United States Senator.  

Penna is the 19th person charged by the Campaign Financing Task Force, which was established by Attorney General Janet Reno to investigate allegations of campaign financing abuses in the 1996 election cycle.

In a one-count felony Information, filed today in U.S. District Court in Newark, New Jersey, the task force charged Penna, 55, with conspiring to defraud the U.S. by impeding the reporting functions of the Federal Election Commission.

Penna agreed to plead guilty to the New Jersey Information and have the case transferred to the Southern District of New York, pursuant to Rule 20 of the Federal Rules of Criminal Procedure, for entry of his plea. Two weeks ago, the U.S. Attorneys office in New York City charged Penna in a separate criminal Information with various securities related violations.

The charges in today's Information are the result of the ongoing investigations by 1) the Newark Division of the FBI, working in conjunction with the Task Force, and 2) the New York Division of the FBI and the U.S. Postal Service, working in conjunction with the United States Attorney's Office for the Southern District of New York. The Task Force is acting as the U.S. Attorney for New Jersey in the case because of the recusal of the New Jersey office.

Today's information alleges that during the 1996 election cycle, Penna, agreed to funnel illegal campaign contributions to the federal election campaigns of President Clinton and U.S. Senator Robert Torricelli. At the time, Penna was the President of the now-defunct Investors Associates Inc., a securities firm based in Hackensack, New Jersey.

According to the information, Penna agreed with certain managers and employees of Investors Associates to have company employees issue personal checks to the Clinton/Gore and Torricelli campaigns. In turn, those employees were reimbursed by Penna and Investors Associates. Penna and his co-conspirators used employees to circumvent the limits on the amount and source of federal election campaign donations, knowing that the campaigns would then make false reports to the FEC. Penna and his co-conspirators caused approximately $12,000 in illegal contributions to be made to the Clinton/Gore campaign and approximately $50,000 to be made to the Torricelli campaign. Under the New Jersey Information, Penna faces up to five years in prison and a $250,000 fine.

In addition to Penna, the Task Force has charged one other individual in the New Jersey investigation. In June 1999, Berek Don, a former Republican party leader in Bergen County, New Jersey, pleaded guilty to making illegal contributions to the Torricelli Campaign. He is to be sentenced in November 1999.

In addition to Don and Penna, the Task Force has charged 17 other individuals. On August 16, 1999, a federal judge sentenced Robert S. Lee to three years of probation and 250 hours of community service for aiding and abetting the making of an illegal foreign campaign contribution to the Democratic National Committee.

On August 12, 1999, former Lippo Executive John Huang pleaded guilty to a felony charge, filed in U.S. District Court in Los Angeles, that he conspired with other employees of the Indonesia-based Lippo Group to make campaign contributions and reimburse employees with corporate funds or with funds from Indonesia. He was sentenced to one year of probation, 500 hours of community service, a $10,000 fine and directed by the judge to continue cooperating with the investigation as a condition of his probation.

In June 1999, Yogesh Gandhi pleaded guilty in San Francisco to mail fraud, tax evasion, and violating federal election laws by aiding and abetting the making of a political campaign contribution by a foreign national. He will be sentenced in November 1999.

On May 21, 1999, Charlie Trie pleaded guilty to violating federal campaign finance laws by making political contributions in someone else's name and by causing a false statement to be made to the FEC. His sentencing is scheduled for November 1, 1999. On January 29, 1998, Charlie Trie and Antonio Pan had been indicted on 15 charges, including obstruction of justice and various crimes relating to campaign financing.

On March 23, 1999, Juan C. Ortiz, the Chief Financial Officer of Future Tech International, Inc., was sentenced to two years probation, $20,000 in fines, and 200 hours in community service for acting as a conduit for an illegal campaign contribution and participating in the reimbursement of eight other conduit contributions.

On December 14, 1998, Johnny Chung was sentenced to probation and 3,000 hours of community service for bank fraud, tax evasion and two misdemeanor counts of conspiring to violate election law.

On November 24, 19998, Howard Glicken, a fund-raiser for the Democratic party, was sentenced to 18 months probation, an $80,000 fine, and ordered to perform 500 hours of community service for violating campaign finance laws.

On November 4, 1998, Franklin Haney was indicted on more than 40 counts of conspiring with another to defraud the United States by impairing and impeding the FEC and conspiring to violate specific provisions of federal election law. He was acquitted of all charges on June 30, 1999.

On September 30, 1998, Democratic fund-raiser Mark B. Jimenez was indicted in Washington, D.C. on 17 counts of organizing, making and concealing illegal conduit contributions to a number of Democratic campaigns, including the Torricelli Campaign. In December 1998, Future Tech International, Jimenez' Miami based computer sales company, pleaded guilty to tax offenses resulting from its illegal deduction of a $100,000 contribution to the DNC and employee campaign contributions reimbursed through the company's payroll. On April, 15, 1999, Jimenez, who is now in the Philippines, was indicted in Miami on additional charges of tax evasion and fraud. The task force is pursuing Jimenez' extradition from the Philippines.

On July 13, 1998, DNC fund-raiser Pauline Kanchanalak and her business associate Duangnet "Georgie" Kronenerg were charged with conspiring to impair and impede the FEC, and causing the submission of false statements to the FEC. Trial is scheduled for November 1999. A dismissed portion of the Kanchanalak case is currently on appeal.

In February 1998, Maria Hsia was indicted in D.C. on charges of conspiring to defraud the United States and causing false statements to be submitted to the FEC. Her trial is scheduled for January 2000. The trial had been postponed pending an appeal of a ruling by the U.S. District Court in Washington, D.C., which had dismissed some of the false statement counts. In May 1999, the U.S. Court of Appeals in Washington, D.C. overturned the ruling and reinstated those counts. The task force dismissed a second indictment on tax charges after a jury in San Francisco failed to reach a verdict.

In 1997, the Task Force obtained guilty pleas from Democratic fund-raisers Nora and Gene Lum, and their daughter Trisha, and Michael Brown for illegal fund-raising activities after their cases were referred from Independent Counsel Daniel Pearson. In August 1998, Gene Lum pleaded guilty to filing a false 1994 tax return and falsely preparing Nora's 1994 tax return. After cooperating with the government, he was sentenced in June 1999, to two years in prison. Nora was sentenced to 5 months in a halfway house, 5 months in home detention, and ordered to pay a $30,000 fine. Trisha Lum and Michael Brown each received probabtion, a $5,000 fine, costs of more than $7,000, and were ordered to perform 150 hours of community service.

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