Michael P.S. Scanlon, 40, a business partner of former lobbyist Jack Abramoff, was sentenced today in U.S. District Court in Washington, D.C., to 20 months in prison for his role in a wide-ranging public corruption and fraud conspiracy, announced the Justice Departmentâ€™s Criminal Division and the FBI.
Scanlon also was ordered by U.S. District Court Judge Ellen S. Huvelle to pay $20,191,537 in restitution to his victims and to serve three years of supervised release following his prison term, as well as to perform 300 hours of community service. Scanlon pleaded guilty in November 2005 to a one-count information charging him with participating in a conspiracy with others to commit bribery, mail and wire fraud, and honest services fraud.
According to court documents, from March 2000 through 2001, Scanlon was employed in the Washington, D.C., offices of two law and lobbying firms where Abramoff worked. During this time, Scanlon also formed and began to operate Capital Campaign Strategies LLC (CCS), a company that provided grass-roots work, public relations services and election campaign support.
In pleading guilty, Scanlon admitted that he and Abramoff conspired to defraud four Native American Indian tribes that either operated or were interested in operating gaming casinos in a scheme referred to as â€œGimme Five.â€ Each of these four clients, which were tribes located in Mississippi, Louisiana, Texas and Michigan, hired Abramoff to give advice regarding how best to limit competition from competing casinos or, in one instance, to re-open a previously closed casino. According to court documents, once Abramoff had established a relationship with the tribal clients, he told them that they needed grass-roots work and public relations services, and he recommended Scanlon and CCS primarily to provide these services. As Scanlon knew, the clients relied on Abramoffâ€™s recommendation in deciding to hire Scanlon and CCS because of Abramoffâ€™s expertise in these matters.
As part of the scheme, Scanlon and Abramoff agreed to charge fees that incorporated huge profit margins and then split the net profits in a secret kick-back arrangement. According to information presented in court, Scanlon knew keeping the kick-back arrangement a secret from the clients was crucial to the success of their scheme, therefore he and Abramoff concealed the arrangement from the tribal clients. According to the plea agreement, CCS received net profits of approximately $39.5 million through this scheme. Scanlon kicked-back approximately $20 million to Abramoff for his assistance to CCS in obtaining these profits.
In addition to the kick-back scheme, Scanlon also admitted that he, Abramoff and others engaged in a pattern of bribery and honest services fraud. Through these schemes, Scanlon and the lobbyist co-conspirators offered and provided a stream of things of value to public officials, including trips, campaign contributions, meals and entertainment, in exchange for agreements that the public officials would use their official positions and influence to benefit Abramoff, Scanlon and their clients.
In one example, according to court documents, Scanlon and Abramoff provided a stream of things of value to former Congressman Robert Ney, and members of his staff, in exchange for numerous official acts. According to court documents, the things of value included a lavish trip to Scotland to play golf on world famous courses; tickets to sporting events and other entertainment; regular meals at restaurants, including Abramoffâ€™s restaurant, Signatures; and campaign contributions for Ney, his political action committees and other political committees on behalf of Ney. In exchange for these things of value, Scanlon and Abramoff, together and separately, sought and received Neyâ€™s agreement to perform, both directly and through others, a series of official acts. These acts included agreements to support and pass legislation, agreements to place statements in the congressional record, meetings with Abramoff and Scanlonâ€™s clients, and advancing the application of a client of Abramoffâ€™s for a license to install wireless telephone infrastructure in the House of Representatives.
To date, 20 individuals, including lobbyists and public officials, have pleaded guilty or been convicted at trial in connection with the activities of Abramoff and his associates. Abramoff pleaded guilty in January 2006 to conspiracy to commit honest services fraud, honest services fraud and tax evasion. He was sentenced in September 2008 to 48 months in prison.
This case was prosecuted by Senior Trial Attorney Mary K. Butler and Trial Attorney M. Kendall Day of the Public Integrity Section, and Assistant Chief Nathaniel B. Edmonds of the Fraud Section. The case was investigated by the FBI, the General Services Administration Office of Inspector General, the Department of the Interior Office of the Inspector G