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ANDOVER MAN INDICTED FOR DEFRAUDING FOR TSONGAS CAMPAIGN

    BOSTON, Feb. 22 /PRNewswire/ --  U.S. Attorney A. John Pappalardo, Special Agent in Charge of the Federal Bureau of Investigation Thomas Hughes, and Special Agent in Charge of Criminal Investigations for the Internal Revenue Service Kenneth Claunch today announced the indictment of Nicholas A. Rizzo, Jr., 59, of 30 Hemlock Road, Andover, Mass., for defrauding the Tsongas for President Committee of more than $1 million and for fraudulently obtaining approximately $2,800,000 in bank loans.
    A federal grand jury sitting in Boston returned a sealed indictment against Rizzo on February 19, 1993.  The 46 count indictment charged Rizzo with committing mail fraud, money laundering, bank fraud, making false statements to the Federal Election Commission, and violating the federal election laws.  The indictment also seeks forfeiture of $3.93 million from Rizzo.
    According to Pappalardo, the indictment alleges that from February 1988 until August 1991, Rizzo falsely misrepresented his income and assets to seven different Massachusetts banks, and therefore fraudulently obtained loans totalling approximately $2,871,024. Beginning in March 1991, Rizzo assumed the position as chief fundraiser and national finance chairman for former U.S. Senator Paul Tsongas' campaign to be President of the United States.
    The indictment charges that Rizzo, as a former fundraiser for Tsongas, President Carter, Vice President Mondale, Congressman Gephardt of Missouri, and as a former Assistant Treasurer of the Democratic National Committee, used his experience and position as fundraising chairman to defraud Tsongas, the Tsongas campaign committee, and various contributors to the campaign, of approximately $1,052,000 by soliciting funds he said were for the campaign and then spending them personally.  While some of the fraudulently obtained funds went to pay off fraudulently obtained bank loans, sums also went to pay illegal gambling debts to Rizzo's bookies, gambling debts Rizzo had at casinos throughout North America, and personal expenses, such as women's clothing and the costs of visiting an adult entertainment center.  In fact, according to the indictment, the campaign contributions Rizzo made to the Tsongas Committee and to other campaigns, came from funds he fraudulently obtained from the Tsongas campaign.
    The indictment alleges that the scheme to defraud the campaign consisted of:
   (1) obtaining $794,000 in loans from supporters of Paul Tsongas by
       falsely representing to them that the money could be legally
       loaned, would be used by the campaign and would be repaid.  In
       fact, $729,000 was not repaid;
   (2) stealing $155,000 of $181,000 in campaign contributions which
       Rizzo solicited and then diverted to a secret bank account he
       maintained at the Andover Bank.  This diversion also deprived the
       campaign and its contributors of matching funds;
   (3) reimbursement illegalities totalling $77,000, for such conduct as
       submitting false bills for expenses not incurred, double billing
       for expenses that were incurred, and billing for personal
       expenses for which he was not entitled.
    The indictment charges that in the course of Rizzo's scheme to defraud the campaign, he caused the Tsongas Committee to file ten false reports with the Federal Election Commission that did not reflect the loans and contributions Rizzo had obtained.  Also, Rizzo violated the Federal Election Law sixteen times, according to the indictment, by soliciting loans that exceeded the $1,000 legal loan or contribution limit.
    Finally, the indictment alleges that Rizzo made false statements to the Federal Election Commission during the course of their audit of the Tsongas Committee by concealing certain loans he had obtained and by making a false statement about having permission to bill the campaign in the name of another.
    If convicted, Rizzo faces a maximum prison term of 346 years and a maximum fine of $13,850,000.  In addition, the indictment seeks the forfeiture of $3,923,024 in illegal proceeds Rizzo allegedly obtained from the Tsongas Committee, its contributors, and various financial institutions.
    Pappalardo noted that these charges represent the largest case of campaign fraud in history and represent the first prosecution in the District of Massachusetts for violations of the federal campaign finance laws and for making false statements to the Federal Election Commission. Pappalardo noted that, "the indictment alleges that Rizzo abused his position of trust with the campaign and used his experience as a fundraiser and his long term relationship with Paul Tsongas to systematically and massively defraud the Committee and those supporting Paul Tsongas for President."  Pappalardo continued, saying that this prosecution is part of an increased effort in the District of Massachusetts by federal authorities to investigate and prosecute criminal conduct arising during federal and state campaigns for public office.
    The investigation is being conducted jointly by the Federal Bureau of Investigation and the Internal Revenue Service, and has received the cooperation of the staff of the Federal Election Commission in Washington DC.  The prosecution is being handled by Assistant U.S. Attorneys Joseph F. Savage, Jr. and Brien O'Connor of Pappalardo's Public Corruption Unit.  The investigation is continuing.
    -0-             02/22/93
    CONTACT:  Press Officer, U.S. Attorney's Office, 617-223-9445 ST:  MA


-- NE011 -- X406 02/22/93
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Date:Feb 22, 1993
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