Two Participants in Illegal Campaign Contribution Scheme Plead Guilty

David B. Fein, United States Attorney for the District of Connecticut, and Kimberly K. Mertz, Special Agent in Charge of the Federal Bureau of Investigation, announced that two individuals pleaded guilty today in New Haven federal court to conspiracy charges stemming from a scheme to direct illegal campaign contributions into the campaign of a candidate for the U.S. House of Representatives. Joshua Nassi, 34, of Fairfield, and Benjamin Hogan, 33, of Southington, each pleaded guilty before United States District Judge Janet Bond Arterton to one count of conspiracy to make false statements to the Federal Election Commission and to impede the FEC’s enforcement of federal campaign finance laws.

“With today’s guilty pleas, six individuals have now acknowledged their involvement in a scheme to disguise the source of contributions to a federal campaign, contributions that were given to influence legislation pending before the Connecticut General Assembly,” stated U.S. Attorney Fein. “The Department of Justice is committed to prosecuting those who corrupt our system of government, our campaign finance laws, and the electoral process.”

“Today’s guilty pleas serve as a reminder that there are consequences for those who undermine the integrity of the legislative process by engaging in a concealed pay-to-play system,” stated FBI Special Agent in Charge Mertz. “The public interest was not being served. The only interests being served were those of the defendants who put their own interests above all. This investigation demonstrates the FBI’s commitment to the investigation of corruption at all levels of government.”

According to court documents and statements made in court, in August 2011, the state of Connecticut applied for a court order enjoining Roll Your Own (RYO) smoke shops from continuing to operate without complying with state law governing tobacco manufacturers. RYO smoke shops are retail businesses that sell loose smoking tobacco and cigarette-rolling materials and offer customers the option of paying a “rental” fee to insert the loose tobacco and the rolling materials into a RYO machine, which is capable of rapidly rolling large quantities of cigarettes. Customers did not pay a tax on the RYO cigarettes when rolled by the RYO machines, in contrast to cigarettes purchased over-the-counter.

Fearing that the Connecticut General Assembly would enact legislation harmful to RYO smoke shop owners’ business interests during the 2012 legislative session, Hogan, Paul Rogers, Harry Raymond “Ray” Soucy, David Moffa, and others engaged in a scheme to direct conduit campaign contributions into the campaign of a candidate for the U.S. House of Representatives. The candidate was also a member of the Connecticut General Assembly. As part of the scheme, the co-conspirators recruited multiple individuals to serve as conduit contributors to the campaign. These individuals permitted checks to be written in their own names to the campaign, and Rogers, Hogan, and other conspirators reimbursed them with cash, thereby concealing the fact that RYO smoke shop owners were contributing to the campaign.

At the time, Nassi was the campaign manager for the campaign of the candidate for the U.S. House of Representatives, and Hogan was an employee of Smoke House Tobacco, an RYO smoke shop with two locations in Waterbury that was co-owned by Rogers. Soucy had a pre-existing relationship with Nassi and the member of the General Assembly who was running for Congress.

In November and December 2011, Hogan, Rogers, Soucy, Moffa, and others made four $2,500 conduit contributions to the campaign. Hogan was aware of the purpose of the contributions and that the contributions were being made in the names of others.

On approximately January 31, 2012, the campaign committee submitted to the Federal Election Commission (FEC) a report of the campaign committee’s receipts and disbursements for the period October 1, 2011 through December 31, 2011. The report falsely stated the source and amount of the four $2,500 contributions that were received and deposited by the campaign committee during that time period.

On April 3, 2012, Soucy contacted Nassi and told him that RYO owners wanted to provide additional contributions to the campaign. That same day, the Connecticut General Assembly’s Joint Committee on Finance, Revenue, and Bonding voted in favor of Senate Bill 357, legislation that would have deemed RYO smoke shop owners to be tobacco manufacturers under Connecticut law, a designation that would have subjected RYO smoke shop owners to a substantial licensing fee and tax increase. Later that day, Soucy contacted Nassi again to state his displeasure with the vote.

Approximately one week later, Soucy, Rogers, and an FBI special agent working in an undercover capacity delivered four $2,500 checks in the names of conduit contributors to Nassi. On April 23, 2012, Nassi advised Soucy that one of the checks had bounced, and Soucy indicated that the contributor had been given cash to deposit. Nassi stated that the campaign needed the check by midnight the following day, and Soucy delivered a replacement check by that deadline. On May 2, 2012, the campaign submitted a fundraising report to the FEC stating that the four contributions given in April were from the conduit contributors when, in fact, they were not.

Over the next two weeks, Nassi continued to advise Soucy on the status of the RYO legislation, and Soucy told Nassi that he would be delivering $10,000 if the legislation died. On May 9, 2012, the legislative session ended and the legislation had not been called for a vote by either chamber of the General Assembly.

On May 14, 2012, Soucy, Rogers, and Hogan met at Smoke House Tobacco where Soucy provided Rogers with $10,000 in cash to be used to reimburse additional conduit contributors. Prior to the meeting, Hogan had approached Waterbury business owner Daniel Monteiro and an employee of Monteiro’s and asked them to serve as conduit contributors. Monteiro subsequently wrote a $2,500 check to the campaign, and his employee obtained a bank check in the amount of $2,500. Both were assured that they would be reimbursed. These two checks, and another $2,500 bank check drawn on Hogan’s own account but not in his name, were given to Soucy at the meeting. Also, at Nassi’s request, Rogers gave Soucy a fourth $2,500 check from a conduit contributor that was payable to a political party. Soucy then delivered the four checks to Nassi at a political event.

On May 16, 2012, after Soucy informed the campaign that one of the contributions had been made in the name of an RYO shop owner and should not be deposited, Soucy met Nassi and provided him with a replacement $2,500 check in the name of someone who was not affiliated with any RYO shops.

Hogan and Nassi are scheduled to be sentenced on July 9 and July 16, 2013, respectively. Both face a maximum term of imprisonment of five years and a fine of up to $250,000.

Rogers, Soucy, Moffa, and Monteiro have also pleaded guilty to charges related to this scheme and await sentencing.

As to the two other individuals who have been charged as a result of this investigation, U.S. Attorney Fein stressed that an indictment is not evidence of guilt. Charges are only allegations, and each defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt.

This matter is being investigated by the Federal Bureau of Investigation and is being prosecuted by Assistant United States Attorneys Christopher M. Mattei and Eric J. Glover.