Thursday, October 1, 2009

White Collar: Florida Political Fundraiser Indicted

A Broward County ophthalmologist was indicted by a federal grand jury in the Southern District of Florida for diverting funds intended for lobbying and campaign contributions to his personal use. The indictment accuses Alan Mendelsohn, M.D., with diverting to his personal use hundreds of thousands of dollars from political action committees he had set up. The specific charges are 27 counts of wire fraud or mail fraud and five counts of making false statements to federal officials.

It is unlawful to divert political contributions to personal use. Actions to do so are chargeable as either mail or wire frauds.

The indictment alleges that during the course of the decade, Dr. Mendelsohn had created three political action committees. The ostensible purpose of these PACs was to raise money to contribute to politicians and to influence state legislation concerning the viatical industry, which was a market involving the sale of life insurance policies of those with terminal illnesses, mostly AIDS.

According to the indictment Mendelsohn received more than $1.5 million in contributions to his PACs from Mutual Benefits, a Fort Lauderdale insurance company. All total, the indictment alleges that Mendelsohn collected more than $2 million for his PACs. Of that amount, the indictment alleges that Mendelsohn diverted more than $600,000 to himself and his associates.

Among the amounts that the indictment alleges Mendelsohn diverted are the following: 1) $60,000 monthly payments to his mistress from April 2003 to February 2005, 2) $240,000 for the purchase and repair of residence for Mendelsohn and his mistress and an automobile for the mistress, 3) $87,000 to an unnamed public official from November 2003 to November 2006, and 4) hundreds of thousands of dollars to pay for his children's tuition at a private Florida prep school, college, and medical school.

Finally, the indictment alleges that Mendelsohn claimed falsely to have used his influence with investigators to close both state and federal investigations.

It is unclear why the grand jury did not also charge money laundering in the indictment. If the movements of money alleged by the indictment are accurate, the facts appear to make out a case for monetary transactions designed to conceal illegal conduct. The government may be considering a superseding indictment charging additional people and crimes.

For further information please see the following article in The Miami Herald,

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