Another black eye for the Big Easy

Posted: April 14, 2008 in Uncategorized

Senator indicted in fraud case

by Meghan Gordon, The Times-Picayune

Derrick Shepherd, once considered a rising political star who won three elections and basked in the glory of his military service, was indicted Thursday for allegedly helping a woman who orchestrated an illegal scheme to launder $2 million for her construction bond business.

A grand jury returned a 41-count superseding indictment in the U.S. District Court, Eastern District of Louisiana that charged Shepherd, a Democratic state senator from Marrero, alongside convicted bond broker Gwendolyn Joseph Moyo; her accused “straw man,” James Zoucha; and two Nevada corporations she used to do business after being prohibited from writing construction bonds.

Shepherd is charged with three criminal counts of mail fraud, one count of conspiracy to commit mail and wire fraud, and one count of conspiracy to commit money laundering. If convicted on all counts, he faces a maximum of 85 years in prison, but legal observers predicted that he realistically faces closer to six years.

Even though the allegations pertain only to Shepherd’s private law office, U.S. Attorney Jim Letten and FBI Special Agent in Charge James Bernazzani described the indictment as another blow to public corruption in Louisiana.

[…]

Shepherd, 38, is accused of depositing five checks made payable to Moyo’s AA Communications into his law firm’s account with Dryades Savings Bank. The checks from various contractors totaled $141,000 and were all dated Dec. 13 or Dec. 19, 2006.

He transferred $55,000 of the payments to a different operating account in the law firm’s name and dropped $15,000 into his personal checking account. He put $8,000 from the operating account back into the first account.

Within days Shepherd drafted three checks to Moyo, one to Zoucha, one to Yu Peng and one to James Taylor for a total of $75,000 in returned payments, according to the indictment. Investigators think Peng immediately turned the check over to Mayo.

On Dec. 21, 2006, he paid off $20,000 in campaign debt from his law firm’s operating account, writing “AA Communications” on the memo line, according to the indictment.

The indictment also says Shepherd attempted to conceal the illegal activity by falsifying his work records. On Dec. 5, 2006, he entered time spent on “Gwen Moyo AA Com” as “3, 6, 11” for a total of 20 hours.

On or about Dec. 18, 2006, he created a false invoice to Moyo and AA Communications, describing $50,700 in “funds received” minus a “legal fee payment” of $10,000 for a $40,700 amount payable to the clients, the indictment says.

In a third document that Shepherd is accused of falsifying, he wrote that he performed 10.75 hours of work for Moyo and AA Communications at a $250 hourly rate for an amount due of $2,700.

He wrote Moyo and her firm on Dec. 21, 2006, a letter that purported to terminate the relationship, enclosing a “final invoice of $2,700 of which we have discussed.” (more…)

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