Former U.S. Congressman Convicted of Mail and Wire Fraud, Campaign Finance Violations, Money Laundering and Filing a False Tax Return
A federal jury convicted former U.S. Representative Stephen E. Stockman for orchestrating a scheme to steal hundreds of thousands of dollars from charitable foundations and the individuals who ran those foundations to illegally finance Stockman’s campaigns for public office and to pay for his and others’ personal expenses. Acting Assistant Attorney General John P. Cronan of the Justice Department’s Criminal Division, U.S. Attorney Ryan K. Patrick of the Southern District of Texas, Assistant Director in Charge Nancy McNamara of the FBI's Washington Field Office and Special Agent in Charge D. Richard Goss of Internal Revenue Service-Criminal Investigation’s (IRS-CI) Houston Field Office made the announcement.
Stockman, 61, of Clear Lake, Texas, was convicted of seven counts of mail and wire fraud, one count of conspiracy to make conduit campaign contributions and false statements to the Federal Election Commission (FEC), one count of making coordinated excessive campaign contributions, two counts of making false statements to the FEC, 11 counts of money laundering and one count of filing a false tax return. Thomas Dodd, 38, of the Houston, Texas area, a former special assistant in Stockman’s congressional office, and Jason Posey, 46, formerly of Houston, a former Stockman congressional staffer, previously pleaded guilty to their involvement in the scheme.
“Stephen Stockman abused his position as United States Congressman to defraud charitable donors and then used the proceeds of his crimes to corrupt the election process and make a range of impermissible personal expenditures,” said Acting Assistant Attorney General Cronan. “The Criminal Division is committed to preserving the public’s confidence in our government by investigating and prosecuting corrupt public officials. We also will continue to address the threat that illegal coordinated campaign contributions pose to the integrity of federal elections, and aggressively pursue these offenses at every appropriate opportunity.”
“This case was a fantastic collaboration between the Southern District of Texas and the Department of Justice’s Criminal Division,” said U.S. Attorney Patrick. “When public officials use their office to defraud donors and violate federal law, we will hold them accountable. Corrupt officials like former congressman Stockman make it harder for the honest ones to do their jobs.”
“Former Representative Stockman used his position as a Member of Congress to fraudulently solicit charitable donations for the purpose of keeping himself in public office,” said Assistant Director McNamara. “Today’s verdict shows that no one is above the law and the FBI and our partners will thoroughly investigate all allegation of violations of federal election system.”
“The integrity of our political system is paramount to maintaining our way of life,” said Special Agent in Charge Goss. “IRS-CI Agents along with the assistant of our Federal partners unraveled a scheme in which Stockman diverted considerable funds intended for charitable organizations for his own purposes that included funding his campaign.” This type of behavior undermines our democracy and cannot be tolerated.”
According to the evidence presented at trial, from May 2010 to October 2014, Stockman solicited and obtained approximately $1.25 million in donations based on false pretenses. Specifically, in 2010, Stockman diverted a significant portion of $285,000 in charitable donations to pay for his and Dodd’s own personal expenses and to further Stockman’s own interests. The evidence at trial established that in 2011 and 2012, Stockman and Dodd received an additional $165,000 in charitable donations, much of which Stockman used to finance his 2012 congressional campaign.
According to the evidence at trial, shortly after Stockman took office in the U.S. House of Representatives in 2013, he and Dodd used the name of a nonprofit entity to solicit and receive a $350,000 charitable donation. Stockman used this donation for a variety of personal and campaign expenses, including illegal conduit campaign contributions, a covert surveillance project targeting a perceived political opponent and payments associated with Stockman’s U.S. Senate campaign in early 2014.
Trial evidence also demonstrated that in connection with Stockman’s Senate campaign, Posey used a nonprofit entity to secure a $450,571 donation in order to fund a purported independent expenditure for a mass-mailing project attacking Stockman’s opponent. In reality, the independent expenditure was directed and supervised by Stockman. Only approximately half of the donation was spent on the mail campaign, and Posey used a portion of the unspent balance to pay for expenses associated with Stockman’s Senate campaign and to fund personal expenses.
Stockman was taken into custody following the return of the verdict. Sentencing has been set for Aug. 17.
The FBI and IRS-CI conducted the investigation. Assistant U.S. Attorney Melissa Annis of the Southern District of Texas and Trial Attorneys Ryan J. Ellersick and Robert J. Heberle of the Criminal Division’s Public Integrity Section are prosecuting the case.