Political Action Committee Operators Charged with Fraud from Trump Election

The Justice Department plans to prosecute three men for allegedly running scam political action committees that raised $3.5 million for 2016 presidential campaigns but donated only $19 to help former President Donald Trump get elected.

Instead, they used the money for lavish lifestyles, according to a Justice Department announcement.

The prosecutions represent a rare occurrence for the Justice Department. Scam PACs have been a problem for a long time but tracing the money in a way that would allow the operators to face criminal charges has been elusive.

“Matthew Nelson Tunstall, 34, of Los Angeles, California; Robert Reyes, Jr., 38, of Hollister, California; and Kyle George Davies, 29, of Austin, Texas, solicited contributions to Liberty Action Group PAC and Progressive Priorities PAC under the guise that the PACs were affiliated with or meaningfully supporting specified candidates for public office,” the Justice Department last week statement says.

The candidates mentioned in the indictment are Trump and his Democratic opponent, Hillary Rodham Clinton.

The three defendants are charged with either wire fraud and conspiracy to commit wire fraud, money laundering or conspiracy to make a false statement to the Federal Election Commission.

The Trump political action committee was called Liberty Action Group. Its robocall solicitations warned that Clinton would “release violent criminals from jail.”

The three defendants operated a separate pro-Clinton political action committee at the same time called Progressive Priorities. It ran anti-Trump solicitations that asked for donations to Clinton’s campaign to “fight back against those who would drive us apart.”

Political action committees are tax-exempt organizations registered with the Federal Election Commission that pool campaign contributions before turning them over to candidates or using them to promote ballot initiatives or legislation.

They frequently are steeped in controversy about whether the funds are misappropriated but the allegations infrequently lead to prosecution.

In one case, the political action committee of former U.S. Rep. John Doolittle, R-Calif., paid 15 percent of its donations to a firm that employed only his wife. The firm received $68,630 in 2003 and 2004, and $224,000 in 2005 and 2006. The FBI investigated but Doolittle never was prosecuted.

In the case the Justice Department announced this week, the defendants are accused of misdirecting money from the political action committees to their bank accounts.

They would launder the money by reporting it as “consulting media and fundraising” expenses paid to media companies, according to prosecutors.

For more information, contact The Legal Forum (www.legal-forum.net) at email: [email protected] or phone: 202-479-7240.