03/05/98- Updated 04:44 PM ET|
Fund-raiser faces tax, fraud charges
LOS ANGELES - Democratic fund-raiser Johnny Chung was charged Thursday with funneling money to the Clinton-Gore re-election campaign by asking others to make contributions, then reimbursing them.
Chung was charged with tax evasion, bank fraud and conspiracy to violate federal election campaign laws.
Court papers also allege Chung, a California businessman, plotted to launder money to the re-election campaign of Sen. John Kerry, D-Mass.
Before the charges were announced, Chung and his attorney had been engaged in plea bargaining with prosecutors amid indications of an agreement.
A federal official who spoke on condition of anonymity Thursday said Chung had agreed to plead guilty to the charges on Monday. The official said the plea agreement had been filed under seal.
Chung has alleged that in 1995 he was solicited for money by a White House staffer, delivered a $50,000 check to Hillary Rodham Clinton's office and then was allowed to bring a group of Chinese businessmen to the White House to watch President Clinton deliver his weekly radio address.
The charges against Chung were contained in a criminal information filed in U.S. District Court in Los Angeles. A criminal information is used to file charges when a defendant has waived the right to have a grand jury evaluate the evidence and vote on an indictment, and often means the defendant has reached an agreement with the government.
Earlier Thursday, Yogesh Gandhi, suspected of illegally funneling $325,000 in foreign contributions to the Democratic party, appeared in federal court on unrelated fraud charges after being arrested as he prepared to fly home to India.
Gandhi was taken into custody without incident Wednesday evening at his home in Danville.
Gandhi appeared before a U.S. magistrate Thursday on a mail fraud charge. Bail was set at $100,000 and he was ordered to stay in northern California.
Gandhi's attorney, Peter Coleridge, said his client wasn't fleeing the country and had a round-trip ticket for what was supposed to be a vacation.
Coleridge refused to say if Gandhi was cooperating with the federal investigation.
Gandhi is accused of obtaining corporate American Express cards for himself and his wife, Kristi Marshall, in 1995 by forging a coworker's name on the application, according to an affidavit by FBI agent Ramyar Tabatabaian.
Tabatabaian, who works on the Justice Department's campaign finance task force in Los Angeles, said the Hayward police department had learned that Gandhi had a United Airlines ticket to leave at noon Thursday from San Francisco to New York, London and on to New Delhi.
In essence, the task force seized on the unrelated fraud case to prevent Gandhi from leaving the country.
A spokesman for the House Government Reform and Oversight Committee, the congressional panel investigating fund-raising abuses, said committee investigators had been called by local police on Tuesday night and told about the flight risk.
In his affidavit, Tabatabaian said he had learned "through my investigation with the campaign finance task force that Gandhi made a $325,000 campaign contribution to the Democratic National Committee in May of 1996 that is suspected to have come from a foreign source and for which Gandhi is suspected to have acted as an illegal conduit."
The mail fraud charge against Gandhi, who claims to be related to Mohandas Gandhi who won India's independence from England, rests on cooperation provided by a former coworker, Donald Shimer, Tabatabaian said.
Shimer, now employed by Summit Medical Center Foundation in Oakland, Calif., told Tabatabaian that in 1987 or 1988 he accepted Gandhi's offer to become executive director of the Gandhi Memorial International Foundation that Gandhi had set up. Shimer worked there until resigning in 1992.
In May 1996, Shimer was denied credit while trying to purchase goods with his own American Express card because the credit card company said Shimer had two corporate accounts that were behind on payments.
Shimer learned the accounts had been opened in 1995 based on applications carrying his name and what Shimer swore was a forgery of his signature, Tabatabaian wrote. Shimer said he recognized the forged signature as the handwriting of Gandhi.
Tabatabaian said the corporate accounts, one for the Gandhi Foundation and one for a related company, gave Gandhi's home address and were issued in the name of Gandhi and his wife.
By The Associated Press
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