Jack Abramoff Gets Indicted

Posted on August 11, 2005

The Associated Press reports that lobbyist Jack Abramoff, an associate and close friend of House Majority Leader Tom DeLay, has been indicted today by a federal grand jury on fraud charges. The charges arise out of a deal to purchase casino boats

The indictment, returned by a grand jury in Fort Lauderdale, charges that Abramoff and an associate, 36-year-old New York businessman Adam Kidan, used a fake wire transfer to defraud two lenders out of some $60 million to finance the deal for SunCruz Casinos.
Abramoff and Kidan are charged with five counts of wire fraud and one count of conspiracy to commit wire fraud and mail fraud. Each count carries a penalty of up to 5 years in prison and a $250,000 fine. U.S. Attorney R. Alexander Acosta said Abramoff was in FBI custody in Los Angeles. Kidan's attorney in Florida, Martin Jaffe, said his client would surrender to authorities in Fort Lauderdale on Friday.
The partners bought SunCruz, which runs a fleet of gambling boats, from entrepreneur Konstantinos "Gus" Boulis for $147 million in 2000, but the deal soon fell apart. Amid bitter legal fighting over the sale, Boulis was shot to death five months later in 2001 what police called a hit. The Fort Lauderdale killing has never been solved. The indictment against Abramoff charges that he used income from SunCruz to finance political fund-raising activities, including events at private boxes at Washington-area sports venues such as the MCI Center and Oriole Park at Camden Yards.
The two lenders who were allegedly defrauded in the SunCruz deal were Foothill Capital Inc., a subsidiary of Wells Fargo, and Citadel Equity Fund Ltd., based in the Cayman Islands, according to court documents in a civil lawsuit. Abramoff is also under federal investigation in Washington by a grand jury investigating whether he and a lobbying partner overcharged Indian tribes by millions of dollars for their work.

Tom DeLay has not been mentioned in connection with any of these cases, just to be clear. But it is interesting because the House Ethics Committee is investigating allegations that Abramoff or his foreign clients paid some of DeLay's overseas travel expenses. So, how close are Abramoff and DeLay? According to the Associated Press, DeLay once described Abramoff as "one of my closest and dearest friends." He's got some interesting friends.