Figure in DeLay Probe Appears in Court - Yahoo! News

By JEREMIAH MARQUEZ, Associated Press Writer

Lobbyist Jack Abramoff appeared in federal court Friday on charges of committing fraud while trying to buy a casino boat company — a case that has attracted attention because of Abramoff's close ties to House Majority Leader Tom DeLay.

The court appearance came a day after Abramoff was indicted in Florida. He surrendered to the FBI later Thursday in Los Angeles.

When U.S. Magistrate Judge Paul Game asked Abramoff if he was aware of the charges, the lobbyist replied, "Yes, sir."

Game ordered Abramoff to give up his passport before allowing his release ahead of his return to Florida next week. Abramoff later left the courthouse and departed in a car without commenting to reporters.

He was told he could post $250,000 of a $2.25 million bond on Tuesday in Florida only if federal prosecutors there determine that the money came from legitimate sources, said U.S. Attorney's spokesman Thom Mrozek. Family members would be liable for the balance of the bond if Abramoff fails to appear at any subsequent hearing.

A defense attorney said Abramoff was in contact with law enforcement immediately after hearing about the charges.

"He does look forward to returning to Miami where he will vigorously defend against the charges against him," Anthony Pacheco said after the court appearance.

The six-count federal indictment unsealed in Fort Lauderdale alleges that Abramoff, 40, and a partner, Adam Kidan, 36, of New York, faked a $23 million wire transfer to defraud two lenders out of some $60 million to finance the $147 million purchase of SunCruz Casinos from Konstantinos "Gus" Boulis in September 2000.

The deal ultimately collapsed and Boulis, 51, was killed five months later in an apparent hit. The shooting is unsolved.

Abramoff's indictment alleges that he used SunCruz income to pay for political fundraising activities. He has denied any wrongdoing concerning SunCruz.

Abramoff is also under investigation for his lobbying activities on behalf of Indian tribes and for his role in paying for overseas trips for DeLay. The Texas Republican has denied knowing Abramoff paid the expenses.

Both Abramoff and Kidan, who has also denied doing anything wrong, could face up to 30 years in prison and thousands of dollars in fines if convicted in the Florida case.

Key lobbyist indicted on fraud charges - Politics - MSNBC.com

Abramoff is a central figure in probe involving House Majority Leader DeLay

The Associated Press
Updated: 7:56 p.m. ET Aug. 11, 2005


MIAMI - Lobbyist Jack Abramoff, a key figure in investigations involving House Majority Leader Tom DeLay, was indicted Thursday by a federal grand jury on fraud charges arising from a 2000 deal to buy casino boats.

The indictment, returned by a grand jury in Fort Lauderdale, charges that Abramoff and an associate, 36-year-old New York businessman Adam Kidan, used a fake wire transfer to defraud two lenders out of some $60 million to finance the deal for SunCruz Casinos.

Abramoff and Kidan are charged with five counts of wire fraud and one count of conspiracy to commit wire fraud and mail fraud. Each count carries a penalty of up to five years in prison and a $250,000 fine.

U.S. Attorney R. Alexander Acosta said Abramoff was in FBI custody in Los Angeles. Kidan’s attorney in Florida, Martin Jaffe, said his client would surrender to authorities in Fort Lauderdale on Friday.

Abramoff’s Miami attorney, Neal Sonnett, said he had not been informed of any charges but said that Abramoff, 40, did not commit fraud. Abramoff had previously been notified that he was a target of the investigation.


“We were hopeful we’d be able to convince the prosecutor not to file charges because he was not involved in fraud involving SunCruz,” Sonnett said.

“I did nothing wrong, and these allegations are totally unfounded,” Kidan said in a statement.

The partners bought SunCruz, which runs a fleet of gambling boats, from entrepreneur Konstantinos “Gus” Boulis for $147 million in 2000, but the deal soon fell apart. Amid bitter legal fighting over the sale, Boulis was shot to death five months later in 2001 in what police called a hit. The Fort Lauderdale killing has never been solved.

The indictment against Abramoff charges that he used income from SunCruz to finance political fund-raising activities, including events at private boxes at Washington-area sports venues such as the MCI Center and Oriole Park at Camden Yards.

The two lenders who were allegedly defrauded in the SunCruz deal were Foothill Capital Inc., a subsidiary of Wells Fargo, and Citadel Equity Fund Ltd., based in the Cayman Islands, according to court documents in a civil lawsuit.

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

Political contributions
DeLay, R-Texas, was not mentioned in any lawsuits involved in the SunCruz deal.

DeLay 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.”

Abramoff collected more than $100,000 for President Bush’s 2004 re-election campaign and raised thousands of dollars for DeLay and other Republican members of Congress. He also was friends with former Christian Coalition leader Ralph Reed, now a Republican candidate for lieutenant governor in Georgia.

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.

Boulis also founded the Miami Subs restaurant chain.

© 2005 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.
© 2005 MSNBC.com

CNN.com - Lobbyist Abramoff indicted on fraud charges - Aug 11, 2005

Washington operative surrenders to FBI in Los Angeles

MIAMI, Florida (CNN) -- Washington lobbyist Jack Abramoff, an associate of several leading Republicans, was indicted by a federal grand jury Thursday on fraud and conspiracy charges arising from a deal to buy Florida casino boats in 2000.

Abramoff surrendered to FBI agents in Los Angeles, California, about three hours after federal prosecutors in Miami announced the charges against him and a partner.

Abramoff has close ties to several influential GOP leaders, among them House Majority Leader Tom DeLay of Texas, Americans for Tax Reform director Grover Norquist, and former Christian Coalition chief Ralph Reed.

He also is under investigation by congressional committees and the Justice Department over allegations he and another partner swindled Indian tribes out of millions of dollars they paid to help sway lawmakers on gambling issues.

A federal grand jury in Fort Lauderdale indicted Abramoff and Adam Kidan on charges they used falsified loan applications and a counterfeit wire transfer notice to persuade lenders to support their $148 million purchase of SunCruz Casinos, which runs gambling boats out of six Florida ports.

The partners obtained $60 million in loans from two companies -- Cayman Islands-based Citadel Equity Fund Ltd. and Foothill Capital Corp., a California company -- after submitting a transfer report that falsely stated they had put up $23 million in cash as a down payment, said U.S. Attorney Alexander Acosta.

"SunCruz subsequently declared bankruptcy, resulting in substantial losses," Acosta said.

Abramoff's lawyers did not return phone calls seeking comment. Kidan, who lives in the Miami area, issued a statement maintaining his innocence and calling the charges "totally unfounded."

"I have cooperated fully with the federal investigation for the past three years because I have nothing to hide," Kidan said.

Each man faces five counts of wire fraud and one conspiracy count. The maximum possible sentence on each count is five years in prison and fines up to $250,000.

According to the indictment, Abramoff and Kidan bought SunCruz when the previous owner -- south Florida businessman Konstantinos "Gus" Boulis -- was forced to sell by federal regulators who determined his lack of U.S. citizenship made him ineligible to own a casino.

The indictment accuses Kidan and Abramoff of making false statements to Citadel Equity and Foothill Capital "in order to falsely present themselves as more credit-worthy borrowers in the purchase of SunCruz than they in fact were."

While telling their lenders they had wired $23 million to Boulis as a down payment on the deal, Abramoff and Kidan actually borrowed $20 million from the casino operator to buy his company, the indictment states.

Prosecutors also allege they sent false financial statements to their lenders and misrepresented their employment experience.

SunCruz filed for bankruptcy about a year after Kidan and Abramoff purchased it in 2000. The company was recently sold to new owners by a federal bankruptcy trustee, Kidan said.

Boulis, founder of the Miami Subs restaurant chain, was shot to death in a gangland-style ambush outside his Fort Lauderdale office. The February 2001 slaying remains unsolved.

Abramoff is scheduled to make an initial appearance in federal court Friday afternoon in Los Angeles, an FBI spokeswoman said.

Other investigations
Abramoff made a fortune from the gaming operations of six Indian tribes while privately mocking tribal leaders as "monkeys" and "morons," according to e-mail obtained by a Senate committee.

Abramoff's lawyers have said he did nothing wrong and that he and his partner, Michael Scanlon, were being singled out for activities commonplace in Washington.

Abramoff's name also surfaced amid ethics questions about DeLay, a longtime friend. The Washington Post reported earlier this year that DeLay took two expensive overseas trips that Abramoff and other lobbyists bankrolled -- a violation of House rules, if true.

DeLay has denied any wrongdoing, calling the report "just another seedy attempt by the liberal media to embarrass me."

CNN's Rich Phillips, Kevin Bohn and Dree De Clamecy contributed to this report.