Abramoff Indicted in Fraud Case Part Deux

The indictment against Abramoff is out. This is from the Washington Post:

MIAMI, Aug. 11 -- Washington lobbyist Jack Abramoff was indicted by a federal grand jury Thursday and federal agents were searching for him as part of a wide-ranging wire fraud case stemming from the purchase of a Florida casino cruise line from a businessman later murdered in Fort Lauderdale, sources close to the case said.

Abramoff, a key figure in ethics investigations into House Majority Leader Tom DeLay (R-Tex.), was expected to be arrested and taken to a U.S. magistrate. 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 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.

In my previous post on this Abramoff indictment, the story did not identify who Abramoff's business partners were in the SunCruz purchase. Abramoff, Adam Kidan and Ben Waldman were involved with the purchase of the SunCruz Casinos from Boulis. However, the Post story raises a new question where Abramoff used his Congressional connections seal this particular deal. So who did Abramoff talk to in Congress regarding SunCruz? What Congressional legislation was needed for this deal?Continuing with the Post story:

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.

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.

Here's some of the details of the scandal. So Abramoff's group wanted to buy SunCruz Casinos for $147 million. They needed some $60 million in financing. So "someone" creates a phony $23 million wire transfer to be sent to a Boulis holding company as proof of Abramoff and his partners' intent of purchasing SunCruz. This wire transfer is then faxed by Kidan and Waldman to Foothill Capital in order to persuade the lender to provide $60 million in financing. Continuing on with the story:

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.

So Boulis knew the account was closed, and possibly that the wire transfer was bogus since he accepted $20 million in notes. Did he specifically accept these promissary notes from Abramoff and his partners--were these notes signed by Abramoff? And if Boulis accepted these notes from Abramoff and partners, there is a good chance that Boulis may have been strapped for cash in operating his floating casinos, or he may have gotten into money trouble with the mob. Continuing on:

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.

I'm starting to wonder who was conning who in this scam. A phony $23 million wire transfer was created to provide $60 million in financing for Abramoff and his partners in their purchase of SunCruz. Boulis is probably willing to go along with Abramoff's purchase since information about Boulis' holding company and account number were provided to Abramoff so this phony wire transfer could be created. In addition Boulis is given $20 million in notes for this deal--by Abramoff?. So far in this story, no real money has changed hands in this purchase. The only real money involved here is the $60 million financing from Foothill Capital. Did Foothill Capital give this $60 million to Abramoff? To Boulis? No wonder that right after this deal closed, there's a fight going on between Abramoff and partners against Boulis.

Then there is this email Abramoff sent to a SunCruz attorney saying that Boulis and Kidan need to resolve the issue of what Boulis is owed and Boulis must leave the company. With all the worthless paper changing hands, Boulis is not going to turn over a $147 million asset such as SunCruz to Abramoff--not until he got paid the full amount. And yet the worthless paper changing hands makes it hard for either side to determine what real money was involved in the sale. There's a lot of questions still unanswered regarding this case. And it doesn't help that Boulis was murdered in a hit.

But the scandal goes beyond towards Congress. The Post story continues:

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.

So Abramoff had provided congressional staffers a flight from Washington to Tampa, a night of gambling on a SunCruz boat, and a trip to the Super Bowl. Who specifically were those congressional staffers, and which congressmen do they work for? It is especially interesting that on of those staffers was Tim Berry, now DeLay's chief-of-staff. What did Abramoff and Berry talk about on these trips?

This Abramoff wire fraud story is never-ending. I found this latest piece of info from a story on the New York Times

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 5 years in prison and a $250,000 fine.

And here's an even greater shocker from the Times:

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.

How much do you want to bet that some of that income was used to finance the favors to the congressional staffers, Tim Berry, and Tom DeLay? I wonder if there's a link between the SunCruz income and Abramoff's contributions to finance some of DeLay's own fact-finding trips?

Finally, I found this story referenced off of Shakespeares Sister blogsite. It is a Yahoo News story that provides another little twist in the scandal regarding Boulis murder.

Months after the contentious {SunCruz) sale was finalized, Gus Boulis was killed, gunned down gang-land style in his car. No arrest was ever made but investigators believe that a series of Suncruz checks to a Miami Beach man named Tony Ferarri financed the hit, Local 10 News reporter Rad Berky said.

So Boulis's hit was possibly financed by a Tony Ferarri with a series of SunCruz checks? Someone in SunCruz ordered, or paid for the hit on Boulis. The question here is who signed the checks? Who ordered that SunCruz pay Ferarri for what services? Abramoff, Kidan and Waldman would have certainly benefited through Boulis demise since that would resolve the dispute they had over the final sale of SunCruz. It would probably also give final control of SunCruz to Abramoff and his partners, since they could settle the SunCruz disput quickly, easily and cheaply with Boulis's estate. I'm not saying Abramoff ordered the hit on Boulis, but I do want to know who ordered this payment of SunCruz monies to Ferarri and what services was Ferarri suppose to provide SunCruz for these payments?.