2018-11-02 DOJ SDNY press_release 119 KB 6,298 chars

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

Caption: United States v. Geoffrey S. Berman, et al.

summary

William Tierney, a 46-year-old Arizona man, pled guilty to conspiring to commit wire fraud by operating six fraudulent PACs that deceived tens of thousands of donors into contributing over $1.4 million under false pretenses, with less than 1% going to candidates and the rest funneled to him via shell companies and fake identities, resulting in a mandatory forfeiture and restitution of at least $1.4 million and a pending prison sentence.

paragraph

William Tierney pled guilty to one count of conspiracy to commit wire fraud for operating six sham political action committees that raised over $1.4 million from tens of thousands of donors by falsely claiming the funds would support causes like autism awareness, law enforcement, and pro-life campaigns. In reality, less than 1% of the money was contributed to political candidates; the vast majority was siphoned to Tierney or used to sustain the fraud through shell entities, fake identities such as 'Emma Smith' and 'Bill Johnson,' and deceptive telemarketing operations disguised as legitimate vendors. He concealed the scheme by fabricating FEC filings and creating phantom companies with misleading names to obscure the flow of funds, marking the first-ever federal prosecution of scam PACs.

narrative

William Tierney, a 46-year-old Arizona man, pled guilty to conspiring to commit wire fraud for operating six fraudulent political action committees (PACs) that raised over $1.4 million from tens of thousands of donors nationwide by falsely claiming the funds would support causes such as autism awareness, law enforcement, and pro-life advocacy through nationwide campaigns. In truth, less than 1% of the money was ever contributed to political candidates; the overwhelming majority was diverted to Tierney personally or used to perpetuate the fraud through a web of shell pass-through entities with deceptive names suggesting legitimate marketing or consulting services. He created fake identities—including 'Emma Smith,' a nonexistent 'Volunteer Coordinator,' and 'Bill Johnson,' a false persona used in communications with call centers—to mislead donors and regulators. Tierney also instructed telemarketing vendors to establish 'Stealth LLCs' to hide the fact that multiple PACs were paying the same vendors, thereby evading Federal Election Commission disclosure requirements. He further deceived the public by creating fake websites for these shell companies, falsely claiming they served real clients in political consulting. Tierney agreed to forfeit and pay at least $1.4 million in restitution and faces a maximum sentence of five years in prison, with sentencing scheduled for February 7, 2019; this case marked the first federal prosecution of scam PACs, signaling a new enforcement priority against political fundraising fraud.

Enriched metadata

Scheme: affinity-fraud (95%)
Court: Southern District of New York
Outcome: pleaded
Restitution: $1,400,000

Classified affinity-fraud(confidence 95%). EDGAR detection: forms Form D· recall 58% / precision 2%. detection rule →

Extracted insights

Dollar amounts 1

$1.40M $1.4 million $1M–$10M

Entities 5

scheme_term conspiracy to commit wire fraud
person Geoffrey S. Berman
person prison time
person scam pacs
person william tierney

Triples 10

William Tierney pled guilty to conspiracy to commit wire fraud
William Tierney established and operated six political action committees
William Tierney defrauded tens of thousands of donors
William Tierney was arrested in May 2018
William Tierney pled guilty before U.S. District Judge Jesse M. Furman
Scam PACs contributed less than 1 percent of raised money to candidates
Geoffrey S. Berman announced William Tierney's guilty plea
William Tierney created web of shell pass-through entities
Scam PACs targeted victims across the country
William Tierney faces prison time

View original DOJ press releasejustice.gov

Extracted body text (6,298c)

Press Release Arizona Man Pleads Guilty To Using Scam Political Action Committees To Defraud Tens Of Thousands Of Donors Friday, November 2, 2018 Share FacebookLinks to other government and non-government sites will typically appear with the “external link” icon to indicate that you are leaving the Department of Justice website when you click the link. XLinks to other government and non-government sites will typically appear with the “external link” icon to indicate that you are leaving the Department of Justice website when you click the link. LinkedInLinks to other government and non-government sites will typically appear with the “external link” icon to indicate that you are leaving the Department of Justice website when you click the link. Email For Immediate Release U.S. Attorney's Office, Southern District of New York 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. Manhattan U.S. Attorney Berman said: “William Tierney admitted today that he secretly operated numerous political action committees to obtain small-dollar donations from people who believed their hard-earned money would support the causes described in solicitation calls and mailings. In reality, the PACs were political action committees in name only, contributing less than 1 percent of the money they raised to candidates for office and instead enriching the defendant, who now faces prison time for his crimes. This is the first-ever federal prosecution of fraudulent scam PACs, but it won’t be the last.” According to the allegations set forth in the Complaint and Information filed against TIERNEY in Manhattan federal court, and statements made in public court filings and proceedings, including TIERNEY’s guilty plea hearing: 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. * * * TIERNEY, 46, of Arizona, pled guilty to one count of conspiring to commit wire fraud, which carries a maximum sentence of five years in prison, and agreed to forfeit and pay restitution in an amount of at least $1.4 million. The maximum potential sentence in this case is prescribed by Congress and is provided here for informational purposes only, as the sentence of the defendant will be determined by the court. TIERNEY is scheduled to be sentenced by Judge Furman on February 7, 2019. 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 of the Federal Bureau of 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. Updated November 2, 2018 Topics Elder Justice Financial Fraud Component USAO - New York, Southern Press Release Number: 18-383

OCR text (6,298c · plain-text · 99% conf)