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May 14, 1997




Donald C. Smaltz, Independent Counsel In Re Espy, announced:

   Today, John J. Hemmingson, former President, Chief Executive Officer and largest shareholder of Crop Growers Corporation, and Alvarez T. Ferrouillet, Jr., a New Orleans lawyer, were sentenced by the Honorable Edith Brown Clement, United States District Judge for the Eastern District of Louisiana, to a term of one year imprisonment each for multiple felonies arising out of laundering a $20,000 illegal corporate campaign contribution to retire the campaign debt of Henry Espy, the brother of former Secretary of Agriculture Mike Espy.

   In addition, Hemmingson was sentenced to pay a fine of $30,000 and make restitution to Crop Growers of $20,000. Ferrouillet was fined $10,000.

   On December 19, 1996, a jury convicted Hemmingson of interstate transportation of property taken by fraud, and two counts of money laundering. The jury also convicted Ferrouillet, who chaired the effort to retire the campaign debt of Henry Espy, of interstate transportation of property taken by fraud, multiple counts of money laundering, and false statements to federal investigators.

    Independent Counsel Smaltz stated:

    Hemmingson's sentence demonstrates that individuals who buy access to senior government officials through illegal means, such as illegal campaign contributions, can expect to spend time in prison.

    This was a classic case of corruption of the corporate boardroom. Hemmingson arranged for the company to pay $26,000 in 1993 to buy access to Secretary Espy and to pay $20,000 in 1994 to maintain the access he had previously bought. Such surreptitious contributions to subvert the political process destroy the public's trust in our government.

    Ferrouillet's sentence demonstrates that lawyers are not immune from prosecution just because they are lawyers, and they too should expect to spend time in prison when they violate the law.

   In previous related matters brought by this office, Hemmingson was acquitted on February 13, 1997 following a jury trial for conspiracy to defraud the Federal Election Commission and causing false statements to the FEC; Crop Growers was found guilty, pursuant to its plea, and fined $2 million for conspiracy and maintaining false books and records as a public company related to the illegal campaign contributions directed by Hemmingson; and Ferrouillet pleaded guilty on February 24, 1997 to the six-counts (conspiracy and false statements to a bank in connection with a loan to retire Henry Espy's campaign debt) that Judge Clement transferred to the Northern District of Mississippi and included in her sentencing order today.

The Independent Counsel's investigation is ongoing.


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