Louisiana Commissioner Of Elections Convicted Of Accepting Kickbacks From Electronic Vote Vendors
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UNITED STATES OF AMERICA versus JERRY M. FOWLER
From about 1991 through 1999, JERRY M. FOWLER used his position as Commissioner of Elections for the Louisiana Department of Elections and Registration to obtain illegal kickbacks from vendors who wanted to do business with the Louisiana Department of Elections and Registration. FOWLER conspired with Pasquale "Pat" Ricci and others to cause the state of Louisiana to pay inflated prices for the purchase of AVM voting machines, AVM voting machine counters, and the installation of the AVM voting machine counters. The vendors used the receipts from the inflated invoices to pay kickbacks to FOWLER. The illegal kickbacks were paid through various means including direct cash payments to FOWLER and payments on FOWLER'S behalf. FOWLER knowingly and willfully filed materially false income tax returns for the years 1996, 1997, and 1998, by not reporting any of the kickbacks as income.
FOWLER'S 1996, 1997, 1998 U.S. Individual Income Tax Returns, Forms 1040, and 1997 Amended U.S. Individual Income Return, Form 1040X, and were signed and mailed from the Middle District of Louisiana.
FOWLER'S 1996, 1997, and 1998 U.S. Individual Income Tax Returns, Forms 1040, reflect adjusted gross income of $157,949.54; $185,938.00 and $165,272.00, respectively. FOWLER'S corrected adjusted gross income including kickback income is $482,053.54; $487,891.29; and $419,312.00 in 1996, 1997, and 1998, respectively.
The AVM voting machine is a mechanical voting machine used by the Louisiana Department of Elections and Registration. The machines were manufactured by Automatic Voting Machines, a corporation that ceased operations during the early 1980's. In 1998, Louisiana had approximately 4,200 AVMs in use.
FOWLER and Pasquale Ricci devised a plan by which FOWLER circumvented state bid laws in the purchase of voting machine products and services. FOWLER requested that Ricci find an exclusive agent that FOWLER could declare as the sole source for buying AVM voting machines. With only a sole AVM source, FOWLER was not required to request bids and he and his co-conspirators controlled and inflated the price paid by the state for voting machines. David Philpot, owner of Birmingham, Alabama, based Election Services, Inc., agreed to the scheme proposed by FOWLER and Ricci and was declared the exclusive agent for Sequoia Pacific Voting Equipment, Inc., for AVM machines in the state of Louisiana. FOWLER declared Philpot the sole source of AVM machines even though FOWLER was aware that there were other sources from which to buy AVM machines. From 1991 through 1999, all AVM purchases by Louisiana were from Philpot's Election Services, Inc., at inflated prices.
One of FOWLER'S duties as Commissioner of Elections was the purchase of voting machine counters for voting machines. Ricci, through his New Jersey based company, Independent Voting Machine Services Company, Inc., was FOWLER'S source for many voting machine parts. FOWLER wanted to make some money on these deals. FOWLER and Ricci conspired to have the state buy a large amount of counters through Ricci at inflated prices so a kickback could be made to FOWLER even though they both knew the large number of counters were not needed by the state.
To facilitate the machine counter scheme, Ricci contacted Glen Boord and Ralph Escudero, the owners of Fort Lauderdale, Florida, based, Uni-Lect, Inc., and Harold Webb, the owner of Mount Holly, New Jersey, based Garden State Elections. Ricci conspired with them and got them to participate in the inflated price scheme by charging him an inflated price for the counters so he could sell them to the state of Louisiana at inflated prices. Phil Foster facilitated the same counter scheme through David Philpot and Election Services, Inc. At all times FOWLER, Ricci, Escudero, Boord, Webb, Foster, and Philpot knew that they were using their companies to inflate prices to facilitate the payment of illegal kickbacks to FOWLER.
One of FOWLER'S duties as Commissioner of Elections was the maintenance of voting machines including the installation of parts and counters when necessary. Both FOWLER and Ricci knew state employees were skilled in installing counters and did in fact install counters. However, during the years of 1993 through 1998, FOWLER and Ricci conspired to let Ricci's company install the counters. FOWLER and Ricci always changed all counters in machines. The machines varied in size from either a 40 counter machine to a 50 counter machine. The price paid by the state for the service was greatly inflated.
FOWLER and Ricci knew that there was no legitimate reason to always change all of the counters in a machine. The counters were replaced in machines that had never exhibited any counter problems. FOWLER described the practice as a preventative maintenance program even though the true reason for the counter replacement was to generate kickbacks for FOWLER.
FOWLER'S admissions about the amount of kickbacks he received were corroborated through several means.
1. All known bank accounts of FOWLER were subpoenaed and the cash deposits to those accounts were analyzed. The annual cash deposits to FOWLER'S accounts are consistent with the $400,000 in kickbacks that FOWLER estimated that he received each year.
2. Most of FOWLER'S co-conspirators have already pled guilty in state court to paying kickbacks to FOWLER. The co-conspirators' factual bases were evaluated and the amount of kickbacks they admitted paying to FOWLER are consistent with the amount of kickbacks that FOWLER admitted receiving. Additionally these amounts are consistent with the cash deposits to FOWLER'S bank accounts.
3. In addition to the cash deposits to FOWLER'S bank accounts, FOWLER worked out a deal with Ricci to receive substantial amounts of cash that were not always deposited to his bank accounts. FOWLER introduced Ricci to bankers in North Louisiana. FOWLER, Ricci, and two bankers, at two banks, worked out a plan for Ricci to borrow money from the banks and give the money to FOWLER. At each bank Ricci borrowed $25,000.00 for a six-month term. The $25,000.00 was given to Ricci in the form of five cashier's checks payable to Ricci in the amount of $5,000.00 each. Ricci gave the five cashier's checks to FOWLER who placed them in a safety deposit box controlled by him at a financial services business in the Middle District of Louisiana. The owners of the financial services business are personal friends of FOWLER. The financial services business is a finance company whose offices are located in a former bank building. When FOWLER needed cash, he would go to the financial services business and place one of the cashier's checks in another safety deposit box which was accessible by him and the owners of the business. The owners retrieved the cashier's check from the box, converted the cashier's check to cash, and placed the cash in the safety deposit box. After one or two days, FOWLER would return to the financial services business and retrieve his $5,000 in cash. FOWLER got the cashier's checks in $5,000 increments thinking that the money would last longer rather than getting $25,000.00 all at once. Ricci borrowed $25,000.00 from each of the two banks every six months for approximately a ten-year period. FOWLER received approximately $100,000.00 per year from this single source.
FOWLER willfully and intentionally did not report the illegal kickback income on his 1996, 1997, and 1998, U.S. Individual Income Tax Returns, Forms 1040. FOWLER willfully and intentionally did not disclose his kickback income to the preparers of his 1996, 1997, and 1998, U.S. Individual Income Tax Returns, Forms 1040, because he did not want to alert them to his criminal actions. Each of the above described tax returns which FOWLER signed contained a written declaration that it was being made under penalties of perjury.
FOWLER has admitted that he knew that the kickbacks he received while he was the Commissioner of Elections should have been reported as income on his personal federal income tax returns. FOWLER further admitted that he did not report the kickback income because he did not want to report his criminal activity to the Internal Revenue Service.
This investigation disclosed that FOWLER made and subscribed to his 1996, 1997, and 1998, U.S. Individual Income Tax Returns, Forms 1040, which he knew were false as to material matters. FOWLER did not report any of the illegal kickback income in the amounts of $324,104.00; $301,953.29; and $254,040.00, for 1996, 1997, and 1998, respectively.
UNITED STATES OF AMERICA versus JERRY M. FOWLER
1. The Office of the United States Attorney for the Middle District of Louisiana, through undersigned counsel, and the above-named defendant agree that the defendant will waive indictment and enter pleas of guilty to a Bill of Information, charging three (3) counts of willfully making and subscribing false tax returns, in violation of Title 26, United States Code, Section 7206 (1).
2. The United States Attorney and the defendant agree that, if the Court accepts the guilty pleas, no additional criminal charges related to the violations contained therein will be brought against the defendant in this district.
3. The defendant agrees to provide complete and truthful information to any law enforcement agent or attorney of the United States, and at any grand jury proceeding or trial. The defendant waives the Fifth Amendment privilege against self-incrimination. The defendant will also cooperate with the Internal Revenue Service in a good faith effort to resolve his tax liabilities. This Plea Agreement, however, is not conditioned upon any obligation of the United States to receive, or act upon, information which the defendant may now or in the future provide or stand ready to provide.
4. The United States Attorney agrees to inform the Court of defendant's actions pursuant to this Plea Agreement. The United States, however, is not obliged, as a condition of this Plea Agreement, to file any motion with the Court either for a downward departure under Section 5K1.1 of the United States Sentencing Commission Sentencing Guidelines, or to reduce the defendant's sentence under Rule 35 of the Federal Rules of Criminal Procedure. If a motion is filed, the Court, in it's discretion, may or may not reduce the sentence below the guidelines' range otherwise applicable.
5. Except for use in this case, and as otherwise provided herein, no truthful testimony or other information provided by the defendant, or any information derived therefrom will be used against the defendant in any criminal trial.
6. If the defendant refuses to provide truthful information or testimony, or provides false or misleading information or testimony, he may, after a judicial finding of such, be prosecuted for any offense covered by this agreement, and all statements and information provided by the defendant may be used against him. The defendant's pleas of guilty may not be withdrawn.
7. The defendant hereby expressly waives the right to appeal his sentence, including, but not limited to, any appeal right conferred by Title 18, United States Code, Section 3742. The defendant, however, reserves the right to appeal any punishment imposed in excess of the statutory maximum.
8. The defendant agrees to fully and truthfully complete the Financial Statement provided to him by the Office of the United States Attorney and to return the financial statement to the undersigned Assistant United States Attorney within 10 days of this agreement being filed with the Court. Further, upon request, he agrees to provide the Office of the United States Attorney with any information or documentation in his possession regarding his financial affairs and agrees to submit to a debtor's examination when requested. The defendant agrees to provide this information whenever requested until such time any judgment or claim against him, including principal, interest, and penalties is discharged or satisfied in full. This information will be utilized to evaluate his capacity to pay the government's claim or judgment against him, whatever that claim or judgment may be. If the defendant refuses to comply with this paragraph or provides false or misleading information, he may, after a judicial finding of such, be prosecuted for any offense covered by the agreement, and all statements and information provided by the defendant may be used against him. The defendant's pleas of guilty may not be withdrawn.
9. The defendant agrees to enter the pleas of guilty to the Bill of Information herein, and the United States Attorney agrees to these pleas pursuant to Rule 11 (e) (1) (C), Federal Rules of Criminal Procedure, with the provision that the Court will sentence the defendant to a term of thirty-six (36) months imprisonment on Count 1, a term of thirty-six (36) months imprisonment on Count 2, to run concurrent with Count 1, and a term of twenty-four (24) months imprisonment on Count 3, to run consecutive to the terms imposed on Counts 1 and 2. It is further agreed by the parties that the defendant will enter his pleas of guilty to the Bill of Information and the Court will sentence the defendant prior to December 19, 2000. In addition, the Court will not impose a fine nor the costs of prosecution in this case. The Court must impose a special assessment of $100, per count, which defendant agrees to pay at the time of sentencing. The Court may also order restitution in accordance with law. The defendant understands that he must receive a term of supervised released after imprisonment of not more than one (1) year.
10. Pursuant to Rule 11 (e) (2), Federal Rules of Criminal Procedure, the Court may accept or reject this Plea Agreement. If the Court rejects the Plea Agreement, the Court, on the record, will so inform the defendant and advise the defendant that the Court is not bound by the Plea Agreement. The Court will advise the defendant that, if he chooses to continue in the guilty pleas, the disposition of the case may be less favorable to the defendant that contemplated by the Plea Agreement, and afford the defendant the opportunity to withdraw the pleas of guilty.
11. The defendant acknowledges that the terms herein constitute the entire agreement and that no other promises or inducements have been made. The defendant acknowledges he has not been threatened, intimidated or coerced in any manner.
12. The defendant acknowledges that this Plea Agreement has been entered into knowingly, voluntarily and with the advice of counsel and that he fully understands the agreement. The defendant has no objection to the legal representation he has received.
This Plea Agreement is entered into this _____day of _________, 2000, at Baton Rouge, Louisiana.
______________________________
DEFENDANT UNITED STATES ATTORNEY
______________________________
RICHARD CRANE BRIAN A. JACKSON
ATTORNEY FOR DEFENDANT FIRST ASSISTANT U.S.
2200 Hillsboro Road, Suite 310 ATTORNEY
______________________________
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| Chapter 4 — Trust Our Election Officials? |
| Next — Bribery Of A North Carolina Election Director |
| Back — As Bad As The 1904 Election In Colorado? by Ed Quillen |