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PAC Fraud

September 21, 2018

By van der Veen, Hartshorn, Levin & Lindheim

A Political Action Committee or “PAC” is a political donation tool used to support or defeat candidates running for office. A PAC can also be used for or against legislation or ballot initiatives, and an increasing number of fraudulent PACs has raised the awareness of the issue by federal law enforcement. Recently, two Arizona brothers were charged with operating fraudulent PACs that raised over $50 million in the last 10 years, according to Mother Jones. According to U.S. Attorney Geoffrey S. Berman, the PACs “engaged in no advocacy campaigns, education efforts, or political operations, and donated less than one percent of the money they raised. . . all while personally enriching the defendants.”

PAC Fraud Falls Under a Federal Offense

The two brothers had set up dozens of PACs over the years, typically pandering to conservative values and claiming to raise money for issues such as autism and support of law enforcement. Very little of the millions in proceeds went to any political campaign, with the money instead, allegedly, going into the pockets of the two defendants. Federal prosecutors charged the two with conspiracy to commit mail fraud, conspiracy to commit wire fraud, and conspiracy to commit money laundering. Wire fraud carries a federal prison sentence of up to 20 years, money laundering carries an additional federal sentence of 20 years, and mail fraud also carries a federal prison sentence of up to 20 years. Each count of any of these offenses can be tried as one offense, meaning that if a defendant is up against multiple counts of mail fraud or multiple counts of wire fraud, they could potentially be facing 40, 60, 80, or 100 years in prison. While the offenses used to commit PAC fraud are charged as a federal offenses, similar deceptive or fraudulent schemes can be tried at the state level under Pennsylvania § 4107, Deceptive or fraudulent business practices.

Common PAC Fraud Schemes

With the political climate so hot right now, it is easy to lure in excited, emotionally charged donors to give money to a campaign or cause that they support. And, with all forms of social media and apps selling personal information to the highest bidder, it becomes even match the targeted person with the right political agenda. PAC fraudsters generally go after small-dollar donors via mass mailings, emails, and mass electronic phone calls. The money is often hidden in shell companies and re-invested into more mass “fundraising” campaigns.

You Need to Contact a Philadelphia Criminal Defense Attorney Today

If you are being charged with a federal offense, whether it is wire fraud, mail fraud, money laundering, or another federal offense, it is very likely that there is a mountain of evidence against you, because the federal government does not take on cases that it believes it will lose. This is all the more reason to work with the most experienced criminal defense attorney possible. We strongly urge you to immediately call the Philadelphia offices of van der Veen, Hartshorn, Levin & Lindheim today at (215) 486-0123



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