Two Virginia Businessmen Sentenced for Illegally Reimbursing Campaign Contributions
|U.S. Department of Justice May 31, 2013|
WASHINGTON—William P. Danielczyk, Jr. was sentenced today to 28 months in prison and ordered to pay a $50,000 fine for illegally reimbursing $186,600 in contributions to the senate and presidential campaign committees of a candidate for federal office and then obstructing the subsequent law enforcement investigation.
Acting Assistant Attorney General Mythili Raman of the Criminal Division; U.S. Attorney Neil H. MacBride of the Eastern District of Virginia; and Valerie Parlave, Assistant Director in Charge of the FBI’s Washington Field Office, made the announcement after sentencing by U.S. District Judge James C. Cacheris in the Eastern District of Virginia.
On February 26, 2013, Danielczyk, 51, and Eugene R. Biagi, 78, both of Oakton, Virginia, pleaded guilty to making illegal conduit campaign contributions. Biagi was sentenced to two years’ supervised probation for his role in Danielczyk’s scheme.
According to court records, Danielczyk was the chairman of Galen Capital Corporation and Biagi served as the corporation’s secretary. In September 2006, Danielczyk co-hosted a fundraiser for a candidate’s campaign for the U.S. Senate and in March 2007, he co-hosted a fundraiser for the same candidate’s 2008 campaign for the president of the United States.
Danielczyk admitted that he recruited individuals, including Biagi and other corporate employees, to serve as “straw donors” to the campaigns, assuring the donors that they would be reimbursed for their contributions. Danielczyk’s assistant collected the contributions, and Danielczyk and Biagi then reimbursed the straw donors for their contributions using Galen Capital Corporation’s corporate funds.
Biagi admitted that he disguised the nature of the reimbursement payments by falsely identifying the purpose of the reimbursement checks on the memorandum line of the check itself and by issuing the checks for amounts slightly larger than the campaign contributions. As part of the obstruction scheme, Danielczyk directed the creation of back-dated letters addressed to individual contributors, which falsely characterized the reimbursement payments to them as “consulting fees.” One set of the letters contained a check for $1,500 in order to further the charade that the reimbursement checks were consulting fees. Biagi furthered the scheme by, among other means, signing the back-dated letters and the checks, thereby supporting Danielczyk’s aims at covering up the true conduct and obstructing the investigations focused on the reimbursement scheme.
Danielczyk and Biagi admitted they used corporate funds to reimburse a total of $186,600 to the two campaigns. The campaigns unwittingly reported them as lawful contributions from the individual “straw donors.”
This case was investigated by the FBI’s Washington Field Office. Assistant U.S. Attorneys Mark D. Lytle and Timothy D. Belevetz from the U.S. Attorney’s Office for the Eastern District of Virginia and Trial Attorney Eric L. Gibson of the Criminal Division’s Public Integrity Section prosecuted the case on behalf of the United States.