Four Defendants Indicted for Securities Fraud, Conducting International Pump-and-Dump Scheme, and Money Laundering
Kelly Thornton (619) 546-9726
NEWS RELEASE SUMMARY – June 13, 2019
SAN DIEGO – Margaret E. Hunter admitted in federal court today that she and her husband, U.S. Rep. Duncan D. Hunter, knowingly and willfully used campaign funds as their personal bank account for years, spending lavishly on things they could not otherwise afford, such as expensive trips to Italy, Las Vegas, Laguna Beach, Disneyland and elsewhere, plus golf outings, a bachelor party, private school for their children, dinners in Del Mar and Coronado, and even plane tickets for their family pet, Eggburt the rabbit.
Margaret Hunter’s plea agreement indicates that she has agreed to provide “substantial assistance to the United States in the investigation and prosecution of others” and to “tell everything (she) knows about every person involved” in the crime.
U.S. District Judge Thomas J. Whelan set Ms. Hunter’s sentencing for September 16, 2019 at 9 a.m. The Hunters both remain free on bond. A motions hearing relating to defendant Duncan Hunter is scheduled for July 1, 2019, and his trial is scheduled to begin on September 10, 2019.
As detailed in her plea agreement, beginning no later than 2010 and continuing up to and including at least 2016, Margaret and Duncan Hunter agreed to knowingly use campaign funds for their own personal benefit and enjoyment, and for that of friends and family. Throughout this period, the Hunters both recognized that many of their personal outings with family or friends (including trips to Del Mar, dinners or drinks with friends, family and “couples” vacations, golf outings, and a bachelor’s party) should not have been paid for with campaign funds. Nevertheless, Ms. Hunter admitted that the Hunters continued to improperly use campaign funds on these and many other occasions.
Among the improper expenses, Margaret Hunter acknowledged that the Hunters improperly spent $2,448.27 in campaign funds in August 2011 on a personal “couples” Las Vegas vacation in Las Vegas, Nevada, and concealed the personal expenditures by falsely reporting to the campaign treasurer that the expenses were all “campaign related.” Similarly, later that same month, knowing that their family bank account had a negative balance, the Hunters improperly used $113.73 in campaign funds to pay their half of the bill during another couples’ “date night” out with good friends at Jake’s Del Mar; improperly used $156.22 in campaign funds during a “couples” day at the Del Mar Racetrack; and improperly used $511.03 in campaign funds at the Hotel del Coronado to celebrate their child’s birthday. They once again falsely told the campaign treasurer that all the charges were “campaign related.”
Ms. Hunter acknowledged in her plea agreement that these types of improper expenses went on for years and included: (1) the Hunters’ improper use of $371.51 in campaign funds on September 2, 2012 at the Loew’s Resort in Coronado for a family lunch in connection with their child’s Irish Dance competition; (2) the Hunters’ improper use of $100.69 in campaign funds on November 16, 2013 at Casa De Pico in La Mesa to take their family and close friends out to dinner before attending a sporting event featuring one of the Hunters’ children; (3) the Hunters’ improper use of $1,489 in campaign funds on June 28, 2014 to treat their good friends to dinner at the Studio restaurant in the Montage Laguna Beach resort, and for room service, drinks, and meals the next day for the Hunters by themselves; (4) the Hunters’ improper use of campaign funds on September 26, 2015 for a family trip to Disneyland, in which Ms. Hunter used Duncan D. Hunter’s campaign card to spend $229.44 in campaign funds at Disneyland’s Star Trader shop for gifts for the Hunters’ children, including two Minnie Mouse ear headbands, a Star Wars droid knit beanie, and a raglan-sleeve black-and-gray Star Wars girls T-shirt; and (5) the Hunters’ improper use of $669.07 in campaign funds on March 27, 2016 at the Hotel del Coronado for a family Easter Sunday brunch in the Crown Room that the Hunters recognized was well outside their budget.
In her plea, Ms. Hunter also admitted improperly using campaign funds on a number of family vacations, including: (1) a July 2014 vacation to Washington, D.C. and a resort in Pennsylvania (which included personal items and activities such as purchasing cigarettes, $399 for ziplining for Hunter and two of his children, and $250 in airline travel charges for the family’s pet rabbit, Eggburt); (2) a February 2015 family trip to Minnesota, during which they improperly paid for personal family expenses including $250 in airline travel charges for Eggburt, and $132 in Uber rides to take the Hunter family to the Mall of America; (3) a June/July 2015 family vacation involving Hunter’s cousin’s wedding in Boise, Idaho, and a stopover in Las Vegas on the way there in which the Hunters, among other things, spent $205.62 in campaign funds for personal items at the North Face store, which included a new pair of sunglasses for Duncan Hunter and a T-shirt; and (4) a November 2015 family vacation to Italy, in which the Hunters improperly used more than $10,000 in campaign funds, and attempted to justify the impermissible use of these funds by setting up a one-day tour of a U.S. Navy facility in Italy.
Margaret Hunter also admitted communicating with Hunter and with the campaign treasurer about the fact that it was only appropriate to pay expenses with campaign funds when an outing or event was for a bona fide campaign or political purpose. Nevertheless, Ms. Hunter admitted that she and her husband both knowingly violated these restrictions and other rules the treasurer implemented to track legitimate expenses (such as instructing the Hunters not to purchase gas using campaign funds, instructing the Hunters that withdrawing cash from ATMs and using “petty cash” required records of how money was spent, and requiring receipts which listed the names of donors and volunteers with whom the Hunters claimed to be spending campaign funds).
Ms. Hunter also acknowledged that she and Duncan Hunter both were aware that the other spent, and could spend, campaign funds on personal activities and purchases without having to inform one another about the nature of specific “campaign” expenses. According to Ms. Hunter, this understanding allowed the Hunters to spend campaign funds on certain personal matters they wished to conceal from the other. For example, she hid from Duncan Hunter certain purchases she made with campaign funds for items like children’s school lunches.
On the other hand, when they improperly spent funds when they were together, they both recognized that campaign funds were being spent on personal activities. For example, after returning home from their personal Boise and Las Vegas vacation, Duncan Hunter and Ms. Hunter discussed how the campaign card had been declined as the family had “racked up a $600 minibar…and more charges at Caesars…” as well as a $200 family breakfast, the “kids room service” and pool drinks, and gift shop vacation expenses.
Even after Duncan Hunter’s chief of staff questioned several expenses the Hunters had made using campaign funds, Ms. Hunter admitted that the Hunters falsely insisted to campaign staff and on public reports that the personal expenses were in fact appropriate campaign-related charges. Moreover, Ms. Hunter acknowledged that she and Duncan Hunter continued using campaign funds to secretly make thousands of dollars in improper personal purchases (including family vacations, household goods and groceries, restaurants and bar tabs, a bachelor party, gas, fast food, retail shopping, cash withdrawals, a garage door, and personal Uber rides, among others) which they continued to disguise as campaign-related expenses.
DEFENDANTS Case Number 18cr3677-W
Margaret E. Hunter Age: 44 Alpine, CA
SUMMARY OF CHARGE
Conspiracy to Defraud the United States – Title 18, U.S.C., Sec. 371
Federal Bureau of Investigation