JAMES RIADY PLEADS GUILTY WILL PAY LARGEST
WASHINGTON, D.C. – James Tjahaja Riady will pay a record $8.6 million in criminal fines and plead guilty to a felony charge of conspiring to defraud the United States by unlawfully reimbursing campaign donors with foreign corporate funds in violation of federal election law, the Justice Department’s Campaign Financing Task Force and the United States Attorney in Los Angeles announced today.
In addition, LippoBank California, a California state-chartered bank affiliated with Lippo Group, will plead guilty to 86 misdemeanor counts charging its agents, Riady and John Huang, with making illegal foreign campaign contributions from 1988 through 1994.
Riady is one of 26 people and two corporations charged by the Campaign Financing Task Force, which was established four years ago by Attorney General Janet Reno to investigate allegations of campaign financing abuses in the 1996 election cycle.
Under the terms of the plea agreement, filed today in U.S. District Court in Los Angeles, Riady, a citizen of the Republic of Indonesia, will surrender himself to the jurisdiction of the court, despite the lack of an extradition treaty between the United States and Indonesia. Once he surrenders himself, Riady will then plead guilty to the felony charge contained within the information, enter a plea on behalf of LippoBank to the 86 misdemeanor charges contained within the information, pay $8,610,000 in fines levied against himself and LippoBank, and cooperate with the government’s investigation.
The $8.6 million fine represents the largest sanction imposed in a campaign finance matter in the history of the United States.
Under the agreement, Riady will continue cooperating with authorities. Since August 2000, Riady has participated in approximately a half dozen proffer sessions with government prosecutors and agents. He will be required to appear before other investigatory agencies.
In addition, Riady will waive his statutory right to apply for reentry into the U.S. for a period of two years, except when his presence is requested by the government consistent with the cooperation provisions of the plea agreement. He will also perform 400 hours of community service, forfeit to the U.S. Treasury any refunds issued to him from any political campaign committees in the wake of this announcement, and be barred from making, reimbursing or directing any future campaign contributions in U.S. elections.
The information alleges that between May 1990 and June 1994, Riady and Huang conspired to obstruct the Federal Election Commission by surreptitiously reimbursing political campaign contributions with funds often obtained from foreign individuals and entities which were prohibited sources under the Federal Election Campaign Act (FECA), and in violation of the dollar limitations established by the FECA.
According to the information, the reimbursements were accomplished through the following mechanisms:
- During the period of May 1990 through July 1991, contributions made by Huang and various employees of LippoBank from 1988 through 1991 were reimbursed with funds wired from a foreign Lippo Group entity into an account maintained by Huang at a bank in Hong Kong;
- During the period of August 1992 through October 1992, shortly after Riady pledged $1 million in support of Arkansas Governor Bill Clinton’s campaign for the Presidency of the United States, contributions made by Huang were reimbursed with funds wired from a foreign Lippo Group entity into an account Riady maintained at LippoBank and then distributed to Huang in cash.
- During the period of August 1992 through September 1993, contributions made by Lippo Group entities operating in the United States were reimbursed with wire transfers from foreign Lippo Group entities.
- During the period of October 1992 through May 1994, contributions made by a Lippo Group executive were reimbursed by cash in Hong Kong.
- During the period of January 1993 through February 1994, contributions made by Huang and various Lippo Group and LippoBank employees were reimbursed through a fictitious “bonus” issued to Huang from a foreign Lippo Group entity.
The purpose of the contributions was to obtain various benefits from various campaign committees and candidates for Lippo Group and LippoBank, including:
- access, meetings, and time with politicians, elected officials, and other high-level government officials;
- contacts and status for Lippo Group and LippoBank with business and government leaders in the United States and abroad;
- business opportunities for Lippo Group and defendant LippoBank;
- government policies which would inure to the benefit of Lippo Group and defendant LippoBank, including Most Favored Nation status for China, open trade policies with Indonesia, normalization of relations with Vietnam, Community Reinvestment Act exemptions for LippoBank, a repeal of the Glass-Steagall Act which limited business opportunities for LippoBank, and a relaxation of Taiwanese restrictions on investment by foreign banks;
- the deposit of funds into LippoBank by political campaign committees and government agencies; and
- local government support for Lippo Group’s California property development projects which would in turn benefit LippoBank’s plans for expansion.
The unlawful conduct described in the information occurred prior to LippoBank’s acquisition by First Bank’s America, Inc. on or about March 1, 2000. First Bank’s America, Inc. had no involvement in the conduct which forms the basis of the information and plea.
In addition to Riady and LippoBank California, the Task Force has prosecuted 25 individuals and one corporation for offenses relating to violations of the campaign financing laws.
On June 21, 2000, Pornipol “Pauline” Kanchanalak pled guilty to conspiracy to cause false statements to be made to the FEC and to causing a foreign corporation to make an illegal contribution. On that same day, codefendant Duagnet Kronenberg pled guilty to violating campaign finance laws.
On June 2, 2000, David Chang, a member of the 1996 Robert G. Torricelli Campaign Finance Committee, pled guilty to violating federal election law by making illegal contributions to the 1996 campaign of Senator Robert Torricelli. He also pled guilty to witness tampering in connection with the campaign financing task force investigation. On June 6, 2000, Chang’s codefendant, Audrey Yu, pled guilty to obstruction of justice under the same superseding indictment.
On June 1, 2000, Cha-Kuek Koo, a New Jersey businessman, pled guilty to violating federal election law by making illegal contributions to the Senator Robert G. Torricelli Campaign. Koo admitted to assisting David Chang in making conduit contributions using Koo’s employees at LG Group, Executive Office of the Americas. Koo’s sentencing has been set for September 7, 2000.
On April 5, 2000, a federal grand jury indicted two Buddhist nuns, Venerables Yi Chu and Man Ho, with contempt of court for failing to appear as witnesses in the government’s criminal trial against Maria Hsia. Yi Chu and Man Ho remain fugitives.
On March 2, 2000, Maria Hsia was convicted in D.C. on charges of causing false statements to be submitted to the FEC. The trial had been postponed pending an appeal of a ruling by the U.S. District Court in Washington, D.C., which had dismissed some of the false statement counts. In May 1999, the U.S. Court of Appeals in Washington, D.C. overturned the ruling and reinstated those counts. The task force dismissed a second indictment on tax charges after a jury in Los Angeles failed to reach a verdict. Hsia awaits sentencing.
On December 17, 1999, Yogesh Gandhi was sentenced to one year in prison for mail fraud, tax evasion, and violating federal election laws by aiding and abetting the making of a political campaign contribution by a foreign national.
On November 1, 1999, Yah Lin “Charlie” Trie, a Little Rock, Arkansas businessman, was sentenced, after pleading guilty, to a two-count information filed in Little Rock, Arkansas, to three years probation, four months home detention, 200 hours of community service, and a $5,000 fine for violating federal campaign finance laws by making political contributions in someone else’s name and by causing a false statement to be made the FEC. Antonio Pan was also indicted with Trie in the District of Columbia, but has not yet been prosecuted because he has remained outside the United States.
On September 15, 1999, Lawrence Penna, the former President of a now-defunct New Jersey securities firm, was charged with violating election laws by funneling illegal campaign contributions to the 1996 federal election campaigns of President Clinton and Senator Torricelli. Penna’s case was transferred by agreement to the Southern District of New York where charges relating to his violation of United States’ securities laws were pending.
On August 16, 1999, a federal judge sentenced Robert S. Lee to three years of probation and 250 hours of community service for aiding and abetting the making of an illegal foreign campaign contribution to the Democratic National Committee.
On August 12, 1999, former Lippo Executive John Huang pleaded guilty to a felony charge, filed in U.S. District Court in Los Angeles, that he conspired with other employees of the Indonesia-based Lippo Group to make campaign contributions and reimburse employees with corporate funds or with funds from Indonesia. He was sentenced to one year of probation, 500 hours of community service, a $10,000 fine and directed by the judge to continue cooperating with the investigation as a condition of his probation.
On May 27, 2000, Berek Don, former GOP party leader in Bergen County, NJ, pleaded guilty to another conduit contribution scheme to the Senator Torricelli Campaign. Don awaits sentencing. On October 13, 2000 Carmine Alampi, a Bergen County New Jersey attorney, pleaded guilty to the same scheme and was fined $5000. He also awaits sentencing.
On March 23, 1999, Juan C. Ortiz, the Chief Financial Officer of Future Tech International, Inc., was sentenced to two years probation, $20,000 in fines, and 200 hours in community service for acting as a conduit for an illegal campaign contribution and participating in the reimbursement of eight other conduit contributions.
On December 14, 1998, Johnny Chung was sentenced to probation and 3,000 hours of community service for bank fraud, tax evasion and two misdemeanor counts of conspiring to violate election law.
On November 24, 1998, Howard Glicken, a fund-raiser for the Democratic party, was sentenced to 18 months probation, an $80,000 fine, and ordered to perform 500 hours of community service for violating campaign finance laws.
On November 4, 1998, Franklin Haney was indicted on more than 40 counts, including among others, conspiring with another to defraud the United States by impairing and impeding the FEC and conspiring to violate specific provisions of federal election law. He was acquitted of all charges on June 30, 1999.
On September 30, 1998, Democratic fund-raiser Mark B. Jimenez was indicted in Washington, D.C. on 17 counts of organizing, making and concealing illegal conduit contributions to a number of Democratic campaigns, including the Torricelli Campaign. In December 1998, Future Tech International, Jimenez’s Miami based computer sales company, pleaded guilty to tax offenses resulting from its illegal deduction of a $100,000 contribution to the DNC and employee campaign contributions reimbursed through the company’s payroll. On April, 15, 1999, Jimenez, who is now in the Philippines, was indicted in Miami on additional charges of tax evasion and fraud. The task force is pursuing Jimenez’s extradition from the Philippines.
In 1997, the Task Force obtained guilty pleas from Democratic fund-raisers Nora and Gene Lum, and their daughter Trisha, and Michael Brown for illegal fund-raising activities after their cases were referred from Independent Counsel Daniel Pearson. In August 1998, Gene Lum pleaded guilty to filing a false 1994 tax return and falsely preparing Nora’s 1994 tax return. After cooperating with the government, he was sentenced in June 1999, to two years in prison. Nora was sentenced to 5 months in a halfway house, 5 months in home detention, and ordered to pay a $30,000 fine. Trisha Lum and Michael Brown each received probation, a $5,000 fine, costs of more than $7,000, and were ordered to perform 150 hours of community service.
source : http://www.justice.gov/opa/pr/2001/January/017crm.htm