Florida Physician Pleads Guilty to Conspiracy in Fraudulent Lobbying and Fund Raising Scheme
|U.S. Department of Justice December 09, 2010|
WASHINGTON—A Florida physician pleaded guilty today in U.S. District Court in Fort Lauderdale, Fla., for his role in a fraud scheme involving lobbying and fund raising for political candidates and organizations, announced Assistant Attorney General Lanny A. Breuer of the Criminal Division.
Alan D. Mendelsohn, 52, of Broward County, Fla., pleaded guilty today before U.S. District Judge William J. Zloch, to a one-count criminal information, charging him with conspiracy to commit mail fraud, to make false statements and to file false tax returns. Mendelsohn faces up to five years in prison and a $250,000 fine. Sentencing has been set for Feb. 17, 2011.
According to plea documents, Mendelsohn entered into an agreement with a lobbyist and campaign consultant to create political entities for the purpose of raising money in support of political parties and candidates for political office in Florida. Between 2002 and 2007, Mendelsohn engaged in various lobbying activities that raised several million dollars in contributions for these political organizations, as well as for a pre-existing political entity of which Mendelsohn was an officer.
Mendelsohn admitted that from 2003 through 2008, he and his co-conspirator agreed to siphon approximately $330,000 from the political entities in direct and third party payments for Mendelsohn’s benefit. Mendelsohn also admitted that from 2003 through 2005 he caused certain lobbyists and in some cases their clients to make contributions totaling $50,000 to a private school his children attended in exchange for lobbying services. The funds were then used to pay tuition for Mendelsohn’s children. Mendelsohn caused another client to send a $75,000 wire transfer to a car dealer to purchase a car for Mendelsohn’s personal use, in exchange for his lobbying services. As Mendelsohn admitted, none of this income was reported to the Internal Revenue Service (IRS) as required.
From 2003 through mid-2006, Mendelsohn also admitted that he knowingly mischaracterized personal expenses totaling approximately $163,770 as business deductions, which had the result of illegally reducing the amount of income paid to Mendelsohn that his medical practice reported to the IRS in each of those years.
In total, Mendelsohn underreported his taxable income by more than $600,000 based on the various schemes. Moreover, Mendelsohn admitted that he caused the political entities, as well as certain corporations used to facilitate the conspiracy, to file false federal tax returns and information, and required state disclosure reports that mischaracterized these payments.
As part of the scheme, Mendelsohn also admitted that from 2003 through 2005 he and his co-conspirator used $82,000 from the political entities to make multiple payments to a person associated with a Florida state senator. Mendelsohn admitted that he knew some or all of the payments were benefitting the public official by allowing the public official to receive money without paying taxes on the money.
In addition, Mendelsohn admitted that beginning in late April and early May 2007, Mendelsohn contacted a Florida businessman, who previously had made large contributions to the political entities at Mendelsohn’s request, to solicit additional contributions that would be used by one of the entities to support a candidate for the Florida legislature. According to court documents, in order to persuade the contributor to make the payments, Mendelsohn told the contributor that he had reached an agreement with a senior public official in the Florida state government to use his office to have federal authorities close an investigation of the contributor and his businesses. Mendelsohn admitted that his representation to the contributor was false, and that at various times he falsely told the contributor that the official and an intermediary were taking action on the contributor’s behalf. Ultimately, the contributor provided Mendelsohn with two checks totaling $150,000, made payable to one of the political entities.
Finally, Mendelsohn admitted that he falsely told FBI agents that the $75,000 payment for the car was a gift and not income from lobbying services. Similarly, Mendelsohn admitted that he lied to FBI agents when he claimed that he had never received any personal benefits from the political entities for which he raised money.
This case is being prosecuted by Senior Trial Attorney Mary K. Butler and Trial Attorney Eric G. Olshan of the Criminal Division’s Public Integrity Section. This case was investigated by the Miami Division of the FBI and the Criminal Investigation Division of the Internal Revenue Service in Deerfield, Fla.