Fraudulent Political Action Committee Operator Sentenced To Two Years In Prison
Geoffrey S. Berman, the United States Attorney for the Southern District of New York, announced today that WILLIAM TIERNEY was sentenced to two years in prison for conspiring to defraud tens of thousands of victims of more than $1 million in connection with political action committees falsely purporting to support causes including autism awareness, law enforcement support, and the pro-life movement. TIERNEY was also ordered to pay more than $1.5 million in forfeiture and restitution to victims, as well as an additional $50,000 fine. TIERNEY pled guilty on November 2, 2018, before United States District Judge Jesse M. Furman, who also imposed the sentence.
U.S. Attorney Geoffrey S. Berman said: “The successful prosecution of William Tierney demonstrates the commitment of the federal government to rooting out fraud and corruption in political action committees. Today’s sentence sends a clear warning to anyone engaged in fraudulent political fundraising: Scam PACs are a crime and those perpetrating them will go to prison.”
According to the Information, other filings in Manhattan federal court, and evidence presented in court at sentencing:
TIERNEY defrauded tens of thousands of donors to six political action committees that he established, controlled, and operated. These scam PACs were fraudulent entities operated to enrich the defendant, targeting victims across the country to raise funds on the basis of false and misleading representations. The scam PACs purported to support voter education regarding – and the political campaigns of those who supported – various causes, including autism awareness, law enforcement, and pro-life causes, including through purported “coast to coast” education and advocacy campaigns, working with local groups and organizations, and “investing every penny . . . in the big races to come.” In truth, virtually all of the money raised was either paid to TIERNEY or used to perpetuate the fraud through additional telemarketing, fundraising, and overhead expenditures. Less than 1 percent of the money obtained by the scam PACs was contributed to candidates for office.
TIERNEY carried out the fraud through a web of shell pass-through entities utilized to conceal and disguise the scheme. Donated funds were transferred to these shell entities, which were given names that suggested activities related to marketing, consulting, and communications efforts, including for issue-specific causes. As a result, payments to the shell entities appeared to be for legitimate expenditures, including when publicly disclosed in Federal Election Commission (“FEC”) filings. In at least one instance, a website was created for one of the shell entities, falsely stating that the entity provided direct marketing and political consulting services to trade associations, candidate campaigns, political action committees, and nonprofit organizations. In fact, these and the other shell entities TIERNEY created had no active operations or employees, were retained by no outside “clients,” and served only to funnel and disguise financial transactions involving money donated to certain scam PACs.
To facilitate the fraud, TIERNEY used the false identity “Bill Johnson” when meeting and corresponding with certain vendors. Another fake identity, “Emma Smith,” was used in fundraising solicitations, and was described as a “Volunteer Coordinator” for one of the PACs. In fact, neither Emma Smith nor the position of “Volunteer Coordinator” actually existed. TIERNEY also undertook efforts to avoid press coverage of the scam PACs more generally, despite the scam PACs’ claims in solicitation materials of national advocacy and awareness campaigns.
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In addition to the prison term, Judge Furman ordered TIERNEY, 47, to pay restitution in the amount of $1,175,417.23, forfeiture in the amount of $410,649.18, and a fine in the amount of $50,000. TIERNEY was also sentenced to one year of supervised release.
TIERNEY pled guilty on November 2, 2018, to one count of conspiracy to commit wire fraud.
Mr. Berman praised the outstanding investigative work of the Special Agents of the United States Attorney’s Office for the Southern District of New York, and thanked the Federal Bureau of Investigation for its contributions to the investigation.
This case is being handled by the Office’s Public Corruption Unit. Assistant U.S. Attorneys Alex Rossmiller and Alison Moe are in charge of the prosecution.