Campaign Finance Fraud
With the federal campaign cycle in full swing, the U.S. Department of Justice (DOJ), Federal Election Commission (FEC), and other agencies are actively monitoring candidates’ and political action committees’ activities for signs of campaign finance fraud.
Federal campaign finance laws place tight controls on political candidates’ and political action committees’ fundraising activities. From marketing restrictions to registration requirements, virtually all aspects of campaign finance are regulated in one way or another. While this is important for the preservation of our democracy, it also presents many significant challenges for candidates and their supporters. Activities classified as campaign finance fraud can lead to swift prosecution, and candidates, organizers, and contributors can face exposure to civil and criminal prosecution.
Former U.S. House Candidate Pleads Guilty to Campaign Finance Fraud
A recent case targeting a former candidate for the U.S. House of Representatives highlights the risks involved with engaging in fraudulent campaign fundraising activities. In 2019, the U.S. Department of Justice (DOJ) prosecuted Harold Russell Taub for various campaign finance violations following a Federal Bureau of Investigation (FBI) inquiry, including campaign finance fraud. According to the DOJ’s press release announcing Taub’s guilty plea, the former candidate admitted to violations including:
- Soliciting donations for two unregistered political action committees (PACs), Keeping America in Republican Control (KAIRC) and Keeping Ohio in Republican Control (KOIRC);
- Falsely representing KAIRC and KOIRC as legitimate PACs that were duly organized in accordance with federal election laws and that “100 percent” of donations were used to support candidates;
- Repeatedly using the name of a former ambassador and high-level military officer in campaign marketing materials without permission;
- Collecting more than $1.6 million in donations to his two illegitimate PACs while failing to file any of the required reports with the Federal Election Commission (FEC); and,
- Using more than $1 million in donations to his fraudulent PACs for “purely personal expenses.”
As a result of pleading guilty to violating the federal wire fraud statute (18 U.S.C. § 1343) and the Federal Election Campaign Act (FECA), Taub was sentenced to three years in prison followed by three years of supervised release, and he was ordered to pay more than $1.1 million in restitution to the donors he defrauded.
While this may appear to be a case of extreme and blatantly unlawful fraudulent conduct, it is these types of cases that force the DOJ and FEC to vigilantly monitor political campaign activities and vigorously enforce FECA and other federal laws. Moreover, even far lesser offenses have the potential to result in substantial penalties, and federal authorities routinely take action to enforce the nation’s campaign finance laws under a broad range of scenarios.
Federal Defense Counsel for DOJ, FEC, and FBI Campaign Finance Fraud Investigations
Our firm represents political candidates, public officials, PACs, and other individuals and organizations in federal election law matters, including campaign finance fraud investigations. We have successfully represented clients nationwide, resolving the vast majority of cases confidentially at the investigative stage. If you need legal representation to fend off allegations of campaign finance fraud, we can help, and our attorneys and federal litigation consultants are available to assist you 24/7.
Our firm is unique in that we do not employ any junior attorneys; and, in addition to our attorneys, we also have federal litigation consultants who are former high-ranking agents with the DOJ, FBI, and other agencies. Additionally, several of our attorneys are former U.S. Attorneys, Assistant U.S. Attorneys, and DOJ prosecutors who spent decades pursuing charges based upon DOJ, FEC, and FBI investigations. Our attorneys and consultants who represent clients in federal campaign finance fraud matters include:
- Dr. Nick Oberheiden, Founding Attorney
- John W. Sellers, Former Senior Trial Attorney, DOJ
- Amanda Marshall, Former U.S. Attorney
- Lynette S. Byrd, Former Assistant U.S. Attorney
- Joanne Fine DeLena, Former Assistant U.S. Attorney
- Richard T. Simmons, Jr., Former Criminal Division Chief, U.S. Attorney’s Office
- Gamal Abdel-Hafiz, Former Supervisory Special Agent, FBI
- Ray Yuen, Former Supervisory Special Agent, FBI
- Chris J. Quick, Former Special Agent, FBI and IRS-CI
- Kevin M. Sheridan, Former Special Agent, FBI
Understanding the Significant Implications of FECA and Other Federal Campaign Finance Fraud Laws
There are several federal laws that prohibit a broad range of practices in the campaign finance arena. For those running for office and supporting candidates, understanding and complying with all of these laws is of paramount importance. While the Federal Election Campaign Act is in many respects the most important – due largely to its comprehensiveness – the other laws that apply to electioneering and fundraising cannot be ignored.
Additionally, as demonstrated by the Taub case discussed above, federal prosecutors can pursue charges that are non-specific to election processes in campaign finance fraud cases as well. In that case, the DOJ pursued charges under the wire fraud statute, which is extraordinarily broad and imposes maximum penalties of statutory fines and up to 20 years of federal imprisonment. The mail fraud statute is a similarly-potent tool for federal prosecution, and the DOJ regularly uses conspiracy charges to target individuals and organizations when substantive violations cannot be fully established.
With regard to campaign finance fraud, some of the key federal statutory provisions include:
Limitations on Contributions and Expenditures (52 U.S.C. § 30116)
Section 30116 of FECA establishes various limitations on financial contributions to federal election campaigns as well as limitations on campaign expenditures from contributed funds. There are different rules for individual contributors, candidates, candidates’ personal political committees, multi-candidate PACs, and other entities. Many campaign finance fraud investigations target violations of Section 30116, and successfully defending against these types of allegations requires a comprehensive understanding of the law as well as the particular factual circumstances involved.
Contributions and Expenditures by National Banks, Corporations, or Labor Organizations (52 U.S.C. § 30118)
Section 30118 of FECA establishes similar types of limitations with regard to campaign contributions and expenditures by national banks, corporations, and labor organizations. The statutory language of Section 30118 is extraordinarily dense and complex, and contributors, PACs, and candidates can all face prosecution for violations involving the financing and operation of donation-supported campaigns.
Enforcement (52 U.S.C. § 30109)
The Federal Election Campaign Act’s enforcement provisions appear in Section 30109. Enforcement proceedings under FECA can be either civil or criminal in nature, with criminal prosecution being reserved for cases involving knowing and willful violation. Prison sentences for criminal violations of FECA range from one to five years per individual offense, and individuals prosecuted criminally can face significant fines as well. In civil FECA enforcement cases, possible penalties include fines, restitution, and injunctions from engaging in campaign-related activities.
Mail Fraud, Wire Fraud, Money Laundering, and Tax Evasion (18 U.S.C. §§ 1341, 1343, and 1356, and 26 U.S.C. § 7201)
The federal mail fraud and wire fraud statutes prohibit the use of the mail, phones, or Internet in connection with the perpetration of any fraudulent scheme. The language of these statutes is broad enough to encompass virtually all activities classified as campaign finance fraud. The federal money laundering statute is broad enough to apply to many fraudulent campaign finance practices as well, and the improper use of campaign contributions can trigger a tax evasion inquiry by Internal Revenue Service Criminal Investigations (IRS-CI) as well.
Conspiracy to Commit Campaign Finance Fraud (18 U.S.C. § 371)
Under the federal conspiracy statute, “[i]f two or more persons conspire either to commit any offense against the United States, or to defraud the United States, or any agency thereof in any manner or for any purpose, and one or more of such persons do any act to effect the object of the conspiracy, each shall be fined under this title or imprisoned not more than five years, or both.” By their nature, conspiracy charges carry a much lower evidentiary burden than charges for campaign finance fraud, and this allows federal prosecutors to pursue conspiracy charges in cases in which the evidence is insufficient to prove that a campaign finance violation has been committed.
For more information about each of these offenses, you can read:
Why Choose Oberheiden P.C. for Federal Campaign Finance Fraud Defense?
If you are under investigation for campaign finance fraud, your finances, your reputation, and your personal freedom could all be on the line. Protecting your assets and yourself requires a strategic defense executed by proven federal defense attorneys and litigation consultants who have experience on both sides of federal law enforcement investigations.
Speak with a Federal Defense Lawyer about Your Campaign Finance Fraud Investigation
For more information about our federal campaign finance fraud defense practice, please contact us to arrange a complimentary initial case assessment. One of our senior attorneys will be happy to review the facts of your case in detail and develop an action plan for moving forward. To speak with a federal defense attorney at Oberheiden P.C. as soon as possible, call 888-680-1745 or inquire online now.