Arizona Man Pleads Guilty To Using Scam Political Action Committees To Defraud Tens Of Thousands Of

[nitpicker]

https://www.justice.gov/usao-sdny/pr/arizona-man-pleads-guilty-using-scam-political-action-committees-defraud-tens-thousands

Department of Justice
U.S. Attorney’s Office
Southern District of New York

FOR IMMEDIATE RELEASE
Friday, November 2, 2018

Arizona Man Pleads Guilty To Using Scam Political Action Committees To Defraud Tens Of Thousands Of Donors

Geoffrey S. Berman, the United States Attorney for the Southern District of New York, announced that WILLIAM TIERNEY pled guilty today in Manhattan federal court to conspiring to commit wire fraud for inducing donations to six political action committees (“PACs”) he established and operated by misrepresenting the activities and expenditures of the PACs. TIERNEY was arrested and charged in connection with this scheme in May 2018, and he pled guilty today to one count of conspiracy to commit wire fraud before U.S. District Judge Jesse M. Furman.
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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 perpetrated the fraud through various deceptive means and methods. For example, he created and utilized a web of shell pass-through entities to conceal and disguise the fraud. 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 – so that payments to the shell entities would appear 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.

TIERNEY also instructed two companies that made telemarketing solicitation calls for certain scam PACs to create their own shell companies – which he referred to as “Stealth LLCs” – with names that concealed any connection with their parent telemarketing vendors. This prevented the FEC, donors, and other members of the public from being able to learn from required FEC disclosure forms that multiple scam PACs were in fact paying the same telemarketing vendors.

To facilitate the fraudulent scheme, TIERNEY used the fake identity of “Bill Johnson” when meeting and corresponding with officials at certain fundraising call centers. 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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[nitpicker]

1. Link to estimate of $23 million

https://www.abc15.com/news/region-southeast-valley/gilbert/arizona-brothers-charged-in-50m-pac-scam-to-rip-off-donors