Abramoff Indicted in Fraud Case

By James V. Grimaldi
Washington Post Staff Writer
Thursday, August 11, 2005; 5:51 PM



MIAMI, Aug. 11 -- Washington lobbyist Jack Abramoff was indicted by a federal grand jury Thursday as part of a wide-ranging fraud case stemming from the purchase of a Florida casino cruise line from a businessman later murdered in Fort Lauderdale, the U.S. attorney announced.

Abramoff, a key figure in ethics investigations into House Majority Leader Tom DeLay (R-Tex.), was arrested in Los Angeles in late afternoon Eastern time and was expected to be taken to a U.S. magistrate there. He was indicted along with Adam Kidan, the former owner of the Dial-A-Mattress franchise in Washington. Kidan, 41, of New York City, will surrender to the FBI here by Friday morning, his attorney, Martin I. Jaffe, said in a written statement.

Abramoff and Kidan were indicted on five counts of wire fraud and conspiracy. The maximum penalty for each of the six counts is five years in prison and $250,000 fine.

In the statement, Kidan said, "I did nothing wrong and these allegations are totally unfounded." He also said he has "cooperated fully with the federal investigation."

Abramoff, 46, remains the subject of a separate federal corruption investigation in Washington stemming from his work for casino-rich Indian tribes.

A federal grand jury in Fort Lauderdale has been investigating allegations of bank fraud, the details of which are outlined in papers filed in U.S. Bankruptcy Court.

Abramoff, and two business and political friends -- Kidan and Ben Waldman of Springfield, Va. -- purchased SunCruz Casinos in September 2000 for $147.5 million from Konstantinos "Gus" Boulis. Records and interviews show that Abramoff used his connections to members of Congress to help seal the purchase of the company. Waldman was not indicted in the case.

The heart of the alleged SunCruz fraud was a record of a $23 million payment to a Boulis holding company intended to persuade lenders to provide $60 million in financing to Abramoff's group toward the $147.5 million purchase of the fleet of floating gambling parlors. The record of the investment was a wire transfer, faxed by Kidan and Waldman to the partners' key lender -- Foothill Capital, a specialty lender now a division of Wells Fargo Bank, according to records reviewed by The Post in federal bankruptcy court in Fort Lauderdale.

The money was never really sent. The account on the wire transfer had long been closed. Other papers in bankruptcy court suggest that Boulis knew the $23 million wasn't sent because he instead accepted $20 million in notes.

Almost immediately after the purchase, management of the gambling company fell into chaos amid allegations of fraud, accusations of mob influence, lawsuits, a fistfight and warring between the Abramoff group and Boulis, who had remained a minority partner.

In an e-mail to a SunCruz attorney sent in late 2001, Abramoff sided with his old friend, Kidan, saying, "It is my belief that Gus [Boulis] and Adam [Kidan] need to resolve the issue of what Gus is owed and Gus needs to move on out of the company."

In February 2001, Boulis was shot to death while driving home from work and no one has been arrested in the murder. In June 2001, SunCruz filed for bankruptcy protection.

During this period, Abramoff had mixed his lobbying practice with his gambling company. Even as he closed a deal to purchase SunCruz, he flew his specialty lender to Washington to meet then House Majority Whip Tom DeLay in his FedEx Field sky box during a Redskins-Cowboys game.

Just days before Boulis' murder, Abramoff had flown congressional staffers from Washington to Tampa on a jet leased by SunCruz for a night of gambling on SunCruz boats and a trip to the Super Bowl. Along on the trip was Tim Berry, now DeLay's chief-of-staff. Berry did not report the gift on his House disclosure forms at the time and people close to him said he thought it was paid for out of political donations.

The Florida investigation has been under way for at least three years. In Washington, a task force of the FBI, IRS and other agencies is exploring how Abramoff and another business associate, Michael Scanlon, collected $80 million in fees for lobbying and public affairs work from Indian tribes around the country.

© 2005 The Washington Post Company

Miami fraud indictment expected for Washington lobbyist Abramoff | theledger.com

By CURT ANDERSON
Associated Press Writer
MIAMI
Washington lobbyist Jack Abramoff, once a close associate of powerful congressional Republicans including House Majority Leader Tom DeLay, was expected to be indicted Thursday by a federal grand jury on bank fraud charges, federal law enforcement officials said.

The charges stem from the purchase by Abramoff and his partners in the 2000 purchase of SunCruz Casinos and the alleged use of a fake wire transfer of $23 million aimed at influencing lenders to provide millions of dollars for the deal. Exact details of the charges were not clear.

Two federal law enforcement officials, speaking on condition of anonymity because the grand jury indictment had not been finalized Thursday morning, confirmed that an indictment was expected later in the day.

Abramoff's Miami attorney, Neal Sonnett, said he had not been informed of any charges but said that Abramoff was not involved in any fraud. Abramoff had previously been notified that he was a target of the investigation.

The partners bought SunCruz, which runs a fleet of gambling boats, from Konstantinos "Gus" Boulis for $147 million in September 2000, and the deal soon fell apart. Amid bitter legal fighting over the sale, Boulis, a Greek-born entrepreneur who also founded the Miami Subs restaurant chain, was shot to death in Fort Lauderdale in February 2001 what police called a planned hit. The killing has never been solved.

Abramoff is also under federal investigation in Washington by a grand jury investigating whether Abramoff and a lobbying partner overcharged Indian tribes by millions of dollars for their work.

DeLay, R-Texas, has asked the House Ethics Committee to review allegations that Abramoff or his clients paid some of DeLay's overseas travel expenses. DeLay has denied knowing that the expenses were paid by Abramoff, whom he once described as "one of my closest and dearest friends."

The SunCruz fleet of 11 ships had 2,300 slot machines and 175 gaming tables and sailed from nine Florida ports and Myrtle Beach, S.C., to international waters. The company continues to operate gambling cruises under new ownership after emerging from bankruptcy.