Thursday, September 24, 2009

White Collar: U.S. Arrests Three Broward County Officials on Corruption Charges

Federal agents arrested three current or former Broward County officials on charges related to official corruption or money laundering. The three complaints are unrelated, but all resulted from undercover FBI operations. The three individuals charged are the following: 1) Beverly Gallagher, a member of the Broward County school board, 2) Fitzroy Salesman, a former Miramar, Florida, city commissioner, and 3) Josephus Eggelletion, a Broward County commissioner.

The complaint against Gallagher charges her with fraud and extortion. It alleges that she directed a $71 million contract for the construction of Hollywood Hills High School to a general contractor who, in turn, would hire as a sub contractor a purported company operated by FBI undercovers. The complaint further alleges that Gallagher served as consultant to the undercover agents. Moreover, the complaint alleges that Gallagher arranged a meeting between the FBI agents and a high ranking school official to help the agents' company qualify for board of education construction work. The government alleges that Gallagher received $12,500 for her help.

The complaint against Salesman charges him with fraud, extortion, and bribery. It alleges that Salesman contacted a high ranking Miramar official to inquire whether there were any no-bid contracts available for the construction company that the FBI agents purportedly operated. Moreover, the complaint alleges that Salesman interceded for the agents with Miramar officials to arrange meetings and to attempt to obtain construction work for the agents' company. The complaint accuses Salesman of receiving $5840 for his efforts.

The complaint against Eggelletion charges him with money laundering. It alleges that Eggelletion helped the undercover agents launder $900,000 purportedly from an investment fraud scheme. The laundering allegedly took place by routing the purported proceeds of the fraud from a Miami financial institution through the Bahamas to an account in St. Croix. As a crux of the charge, the government is alleging that the movement of the monies took place to conceal the purported fraudulent conduct. The complaint alleges that Eggelletion received $23,300 for his part in the money laundering scheme.

The three defendants were arrested based on criminal complaints obtained by the United States Attorney for the Southern District of Florida, headquartered in Miami. The criminal complaints allowed federal authorities to take the three defendants into custody. They were arraigned separately in federal court and released on bail.

The government cannot proceed against the defendants based on the criminal complaints. Instead, pursuant to the Fifth Amendment to the U.S. Constitution, the government must obtain Grand Jury indictments to proceed. Such indictments may charge the same crimes that are in the criminal complaints or different ones. The arrests and arrangements based on the criminal complaints has begun the running of the speedy trial clock. The Sixth Amendment to the U.S. Constitution guarantees the right of a defendant to a speedy trial. The government has a little over two months to bring the cases to trial. However, this time period usually expands as the time required for certain pre-trial activities is excluded from the speedy trial calculations.

Until the government obtains indictments and begins making its evidentiary disclosures, it is difficult to suggest what avenues of defense my be open to the defendants.

Please see the following article in The Miami Herald,

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