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California Man Pleads Guilty to $3.5 Million Scam-PAC Fraud
San Antonio
   
 
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A California man pleaded guilty yesterday in the Western District of Texas to conspiracy to solicit millions of dollars in contributions to two political action committees based on false and misleading representations that the funds would be used to support presidential candidates during and after the 2016 election cycle.

According to court documents, from 2016 through at least April 2017, Robert Reyes, Jr., 40, of Hollister, along with others, operated two political action committees—Liberty Action Group PAC and Progressive Priorities PAC—which solicited contributions from the public via robocalls and television, radio, and internet advertisements. The two PACs represented that the contributions would be used to support dueling presidential nominees of the two major political parties, respectively. Instead, Reyes and his co-conspirators used the funds to enrich themselves and to fund additional fraudulent solicitations. Specifically, Reyes admitted that the two PACs raised approximately $3.5 million in contributions during the 2016 election cycle and subsequent months, of which Reyes received approximately $714,000. Of the approximately $3.5 million raised, the two PACs contributed approximately $19 to legitimate political causes.

Additionally, to conceal the origin and nature of the proceeds of the fraudulent scheme, Reyes and others instructed a third-party vendor to withdraw approximately $353,000 from the two PACs in excess of the payments for services rendered, then deposit the excess payments into accounts held by shell companies that they controlled. Reyes admitted to operating additional fraudulent PACs beyond the 2016 election cycle, Support American Leaders and Campaign to Support the President, from which he received approximately $95,000 generated from false and misleading solicitations to donors.

As part of his plea, Reyes agreed to forfeit $809,920.40 that he received for his participation in the scam-PACs during the scheme.

Reyes pleaded guilty to one count of conspiracy to commit wire fraud and to cause false statements to the Federal Election Commission and one count of money laundering. Sentencing will be scheduled at a later date. He faces a maximum penalty of 20 years in prison. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.

Assistant Attorney General Kenneth A. Polite Jr. of the Justice Department’s Criminal Division and Special Agent in Charge Oliver E. Rich of the FBI’s San Antonio Field Office made the announcement.

The investigation was conducted by the FBI’s San Antonio Division, Austin White Collar Crime Task Force.

Trial Attorneys Michael N. Lang and Celia Choy of the Criminal Division’s Public Integrity Section are prosecuting the case. Former PIN Trial Attorney Rebecca Schuman also contributed significantly to the investigation.

Topic(s): 
Voting and Elections
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