Updated Tuesday, June 21
First published Monday, May 16
Philadelphia Congressman Chaka Fattah has already lost the seat in Congress that’s he’s held for more than two decades.
On October 4, he’ll learn his sentence after a jury convicted him on all charges after a monthlong criminal trial. Testimony began May 16 in the federal trial against Fattah, and the Representative of the Second District of the United States Congress was found guilty of 29 criminal counts stemming from an eight-year federal investigation. The congressman steadfastly maintained his innocence.
There are basically seven illegal schemes of which the government convicted Fattah and his associates perpetrated. These are the acts:
- Fattah received an illegal $1 million campaign loan from Sallie Mae executive Al Lord when he was running for Philadelphia mayor in 2007 and then paid back $600,000 of that loan with charitable and federal grant funds.
- In order to pay off another mayoral campaign debt, Fattah worked to obtain federal grant money for a non-profit that didn’t yet exist.
- Fattah used campaign funds from both his congressional and mayoral campaigns in order to pay off student loan debt accumulated by his son, Chaka Fattah, Jr. (in addition to personal expenses for himself and his wife, former NBC10 anchor Renee Chenault-Fattah).
- Fattah also received payments over the span of several years from Herbert Vederman, a lobbyist. Fattah then asked the White House to name Vederman to an ambassadorship and also hired his girlfriend. (The jury found Vederman guilty on June 21, as well.)
- One of the major payments from Vederman was an $18,000 wire transfer to Fattah that he used to show he was financially stable enough to mortgage a vacation home in the Poconos. Vederman and Fattah said the cash was because Vederman wanted to purchase Chenault-Fattah’s Porsche. However, after the payment, the FBI says Chenault-Fattah kept — and still drove and insured — the car.
- Fattah defrauded the government by obtaining a $50,000 grant for a conference that never happened and then his associates used the money to pay consultants and attorneys.
- And, in order to accomplish all this, Fattah and his associates filed dozens of falsified documents to local, state and federal government entities and banks.
Here’s a breakdown of each of the 29 charges faced by Fattah, along with four others charged:
Count 1: Conspiracy to commit racketeering
Racketeering is a broad charge that means someone used a legitimate organization (political or otherwise) for not legitimate or illegal reasons. It essentially encompasses every scheme the government contends Fattah and his associates planned out.
Count 2: Conspiracy to commit wire fraud
This fraud charge is related to an illegal $1 million loan from a Sallie Mae executive that Fattah obtained during his run for Philadelphia mayor in 2007. This count alleged Fattah, Brand, Nicholas and Bowser conspired to obtain an illegal campaign loan and to fraudulently repay that with hundreds of thousands of dollars of misappropriated charitable funds from Sallie Mae and grant funds from NASA.
The government says the conspiracy was cooked up to present Fattah as a viable candidate for public office — to show he was a guy who paid his debts. But they say to avoid detection, he and his associates falsified documents including campaign finance reports, invoices and contracts.
Specific to this count, the feds said Fattah and Bowser faked entries in the mayoral campaign’s publicly-filed campaign finance statements by reporting fictitious debt and then reducing that “debt” by reporting in-kind contributions. There were nine false filings between 2007 and 2014.
Count 3: Conspiracy to commit honest services wire fraud
Fattah and Bowser conspired to repay money he owed to a political consultant with federal funds earmarked for “Blue Guardians” — an entity that didn’t exist at the time of the application for the funding. In order to avoid detection by investigators or reporters, the grand jury wrote Fattah and Bowser submitted more false entries in public campaign finance reports for Fattah’s 2007 mayoral campaign. It alleges five falsified reports between 2010 and 2014.
Count 4: Conspiracy to commit mail fraud
This count is with regard to the allegation that Fattah used campaign funds donated to his mayoral and congressional campaigns in order to pay for his son’s student loan debt owed to Drexel University and Sallie Mae. In order to do it? The feds say Fattah funneled money through Naylor’s political consulting firm.
The grand jury detailed nine allegedly falsified local, state and federal documents between 2009 and 2014 that they say were designed to cover up the scheme.
Counts 5 through 10: Mail fraud
These six counts are related to six checks written and mailed in fall 2010 and spring 2011. A check cut on Nov. 22, 2010 took $5,000 from Fattah’s mayoral campaign account and sent it to Naylor’s consulting firm. Ordinarily, this would be kosher.
But federal investigators detailed five separate checks sent from Naylor to Sallie Mae to cover student loan debts for Chaka Fattah Jr. around the same time. They totaled $4,729.
Counts 11 through 14: Falsification of records
Fattah and Bowser allegedly falsified documents, specifically the Fattah for Mayor Committee Commonwealth of Pennsylvania Campaign Finance Report in cycle years 2010 through 2013. It says they faked in-kind contributions, their own expenditures and a statement of unpaid debts.
Count 15: Falsification of records
This count alleges Fattah and Bowser falsified a 2010 FEC report to cover up any evidence related to paying his son’s debt with campaign funds, repaying a loan with charity money or paying a consultant with funds earmarked for what the grand jury says was a sham federal entity.
Count 16: Conspiracy
This count alleges Fattah and Bowser conspired with Vederman in a bribery scheme (the next count) in order to accept “money and things of value” in return for influencing decisions related to his official position as a congressman. Specifically, the feds say Fattah pushed for an ambassadorship for Vederman.
Count 17 and 18: Bribery
Beginning in 2008, Fattah started lobbying hard for Vederman to obtain a position as an ambassador (the man said he would literally be an ambassador anywhere in the world). During this time, Fattah spoke with the White House on numerous occasions to press for a spot for Vederman and even hand-delivered a letter to President Obama regarding the issue.
By 2011, little progress had been made so Fattah started pushing for Vederman to be appointed to a spot on the federal trade commission. Then, at the beginning of 2012 — just days after Vederman wired Fattah $18,000 (for what the feds say was a sham sale of Renee Chenault-Fattah’s Porsche) — Bowser offered Vederman’s girlfriend a position in Fattah’s office as a “special assistant to the congressman.”
The financial history between Vederman and Fattah is deep, according to the feds. These are the highlights:
- 2009: Vederman sponsors Fattah’s live-in au pair for a student visa
- April 2010: Vederman issued a check for $3,000 for college tuition
- April 2010: Vederman gave Fattah’s son a check and then the son deposited cash into Fattah’s personal account. Days later, Fattah withdrew the same amount from his account in order to pay city taxes.
- October 2010: Fattah’s son cashed a check to him from Vederman’s personal account the same day the congressman delivered a letter to the president pressing for an ambassadorship for Vederman. (Related: In a conversation between Fattah Jr. and his roommate in 2011, Fattah Jr. said he’d provide his father with “stacks” of cash whenever necessary.)
- January 2012: Vederman wired Fattah $18,000 to purchase a Porsche from Chenault-Fattah, which stayed in a car in her garage.
Count 19: Bank fraud
This count alleges Fattah, Vederman and Bowser attempted to defraud the Credit Union Mortgage Association by claiming Fattah was financially stable partially due to an $18,000 check from Vederman — the check that the feds say was for a Porsche the man never actually bought.
Count 20: False statements to financial institutions
Jan. 19, 2012. Made false statements to CUMA in order to get a $320,000 mortgage on a vacation home in the Poconos. Fattah claimed he and Cheanult-Fattah had the financial resources to qualify by showing an $18,000 wire transfer from Vederman that they said was to buy Chenault-Fattah’s Porsche. The feds say that sale never happened, and Chenault-Fattah continued to possess, drive and insure the car after the payment was made.
Count 21: Falsification of records
This count alleges Fattah, Vederman and Bowser made up entries in documents related to the sale of the Porsche in January 2012.
Count 22: Money laundering
The charges of money laundering are also related to the alleged Porsche scheme. Here, the feds say Fattah laundered cash from Vederman in order to put $25,000 into an attorney’s escrow account to buy the property in the Poconos.
Count 23: Money laundering conspiracy
This is a conspiracy charge filed against Fattah, Vederman and Bowser related to the above alleged money laundering.
Count 24 through 26: Wire fraud
Nicholas submitted false grant applications to NOAA regarding a future conference on higher education that federal investigators say never happened. In March 2013, EAA received and Nicholas began to use funds earmarked for the conference for things totally unrelated to that purpose. The feds listed 10 checks in 2013 totaling more than $50,000 that were written to consultants, attorneys and Nicholas herself.
Count 27: Money laundering
This laundering charge against Nicholas refers to a $20,000 check cut in March 2013 that was drawn out of EAA’s account and paid to Naylor’s firm. This check triggered a charge of money laundering because it was the only one with a value greater than $10,000.
Counts 28 and 29: Falsification of records
These counts against Nicholas are with regard to two allegedly falsified federal documents: A financial report transmitted to NOAA and EAA’s final performance progress report submitted to NOAA.