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UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF LOUISIANA

SUPERSEDING INDICTMENT FOR CONSPIRACY, FALSE
STATEMENTS TO A BANK, INTERSTATE TRANSPORTATION
OF PROPERTY TAKEN BY FRAUD, MONEY LAUNDERING,
AND FALSE STATEMENTS TO FEDERAL AGENTS

 


UNITED STATES OF AMERICA

 

VS.

 

ALVAREZ T. FERROUILLET, JR.,

FERROUILLET AND
FERROUILLET LAW FIRM,

AND

MUNICIPAL HEALTHCARE
COOPERATIVE,
INCORPORATED,

AND

JOHN J. HEMMINGSON,

  Defendants.


Criminal Docket No. 96-198

Section::"N" (2)

Violations:
18 U.S.C. 2
18 U.S.C. 371
18 U.S.C. 1001
18 U.S.C. 1014
18 U.S.C. 1956(a)(1)(B)(i),(ii)
18 U.S.C. 1957(a)
18 U.S.C. 2314

 

THE GRAND JURY CHARGES:

COUNT 1

A. Introduction

   At all times material to each count of this Indictment:

   1. On March 30, 1993, a special primary election was held in the State of Mississippi to elect a Representative in Congress for the Second Congressional District. One of the candidates for this federal office was Henry William Espy, Jr. The special election was held to fill the congressional seat vacated by Henry William Espy, Jr.'s brother, Alphonso Michael Espy, who had resigned to become the United States Secretary of Agriculture.

   2. On March 30, 1993, Henry William Espy, Jr. lost the primary election. At the time of his defeat, his campaign debts totaled approximately $190,000.00.

   3. The defendant ALVAREZ T. FERROUILLET, JR. was an attorney licensed to practice law in the State of Louisiana. The defendant ALVAREZ T. FERROUILLET, JR. owned a fifty percent (50%) partnership interest in the defendant FERROUILLET AND FERROUILLET LAW FIRM which was located in New Orleans, Louisiana. One other individual was the managing partner and owned the remaining fifty percent (50%) partnership interest in the defendant FERROUILLET AND FERROUILLET LAW FIRM.

   4. The defendant ALVAREZ T. FERROUILLET, JR. also was a director and owned a fifty percent (50%) interest in the defendant MUNICIPAL HEALTHCARE COOPERATIVE, INCORPORATED, a Louisiana Corporation formed in 1992, which was located in New Orleans, Louisiana. One other individual was a director and the registered agent and owned the remaining fifty percent (50%) interest in the defendant MUNICIPAL HEALTHCARE COOPERATIVE, INCORPORATED. The defendant MUNICIPAL HEALTHCARE COOPERATIVE, INCORPORATED was engaged in the business of developing health care plans for municipalities and corporations.

   5. In or about April, 1993, the defendant ALVAREZ T. FERROUILLET, JR. met Henry William Espy, Jr. and agreed to coordinate and supervise all efforts to retire the campaign debts. Henry William Espy, Jr. appointed the defendant ALVAREZ T. FERROUILLET, JR. as Chairman of the Henry Espy for Congress Committee.

   6. The Henry Espy for Congress Committee was registered as a principal campaign committee with the Federal Election Commission and was designated and authorized by Henry William Espy, Jr., pursuant to the Federal Election Campaign Act, to receive contributions and make expenditures in connection with the candidacy of Henry William Espy, Jr. for United States Congress. The Henry Espy for Congress Campaign Committee was subject to the reporting provisions and the campaign financing limitations of the Federal Election Campaign Act (the "Act").

   7. A political committee which either (a) is the principal campaign committee for a candidate for federal office, or (b) makes expenditures in the excess of $1,000.00 per year to support or oppose a candidate for a federal office, is required by the Act, specifically, Title 2, U.S.C., 434, to file periodic reports with the Federal Election Commission, which reports should accurately reflect the identities of all individuals and entities who contribute in excess of $200.00 to each such political committee in any given calendar year.

   8. The Act, in particular Title 2, U.S.C., 441a(a)(1)(A), makes it unlawful for any one person to give contributions to any candidate with respect to any election for federal office which, in the aggregate, exceed $1,000.00.

   9. The Act, in particular Title 2, U.S.C., 437g(d)(1)(A), makes it unlawful for any candidate to accept contributions from any one person which, in the aggregate, equals or exceeds $2,000.00 during a calendar year. This prohibition includes partnerships such as the defendant FERROUILLET AND FERROUILLET LAW FIRM.

   10. The Act, in particular Title 2, U.S.C., 441b(a), makes it unlawful for any corporation organized by authority of any law of Congress to make a contribution or expenditure in connection with any primary election held to select candidates for any political office. For the purpose of this limitation on campaign contributions, the Act, in particular Title 2, U.S.C., 441b(b)(2), provides that the term "contribution" includes "loans."

   11. The Federal Election Commission ("FEC") was and is the agency of the United States Government entrusted with responsibility for enforcement of the reporting requirements of the Act and for detection, investigation, and institution of enforcement action against violations of the Act, including the provisions referred to above. In addition, the FEC is responsible for making available to the public specific information about the amounts and sources of political contributions to federal candidates.

   12. Omni Bank was a bank organized under the laws of the United States of America, with a principal office in Metairie, Louisiana. Omni Bank was at all times a "financial institution" as defined by Title 31, United States Code, Section 5312.

   13. The defendant ALVAREZ T. FERROUILLET, JR. was a banking customer of Omni Bank.

   14. Financial institutions such as Omni Bank are required to file a report called a "Currency Transaction Report" for each transaction in currency of more than $10,000.00 including deposits.

   15. Currency Transaction Reports are required to be filed by financial institutions with the Internal Revenue Service on IRS Form 4789, which requires, among other information, that the bank inform the Internal Revenue Service of the identity and occupation of the individual who conducted the currency transaction with the bank, the total amount of cash involved in the transaction, and the amount of the currency in denominations of $100.00 or higher.

   16. Currency Transaction Reports are required to be filed with the Internal Revenue Service because the United States Congress has found and declared that the information about large currency transactions provided by these Currency Transaction Reports is useful to various agencies of the United States in investigations and proceedings.

   17. Crop Growers Insurance, Inc. (hereinafter "CGI") was a Montana corporation which was primarily engaged in the business of marketing and servicing federal multi-peril crop insurance and crop hail insurance. It was a wholly owned subsidiary of a publicly held corporation named Crop Growers Corporation. In 1993 and 1994, John J. Hemmingson was Chairman of the Board of Directors, President and Chief Executive Officer, and a director of CGI.

   18. The First National Bank of Clarksdale in Clarksdale, Mississippi was an institution the accounts of which were insured by the Federal Deposit Insurance Corporation. B. The Conspiracy

   19. From on or about April 1, 1993 up to and including the date of the filing of this Indictment, in the Eastern District of Louisiana, and elsewhere, the defendants ALVAREZ T. FERROUILLET, JR., the FERROUILLET AND FERROUILLET LAW FIRM, MUNICIPAL HEALTHCARE COOPERATIVE, INCORPORATED, and others known and unknown to the Grand Jury, knowingly and willfully combined, conspired, confederated and agreed together and with each other: (1) to commit an offense against the United States, namely to make material false statements for the purpose of influencing the actions of the First National Bank of Clarksdale in Clarksdale, Mississippi, in violation of Title 18, United States Code, Section 1014; (2) to commit an offense against the United States, namely to engage in money laundering transactions, in violation of Title 18, United States Code, Sections 1956(a)(1)(B)(i) and 1957(a); and (3) to defraud the United States, and in particular the FEC, an agency of the United States, by impairing, obstructing, impeding and defeating its lawful governmental functions and duties under the Act. C. Objectives Of The Conspiracy

   20. It was an objective of the conspiracy that the defendants and their co-conspirators would and did obtain credit and extensions of credit by making false statements to a federally insured financial institution for the purpose of obtaining money for the Henry Espy for Congress Campaign and then lulling and further deceiving the bank about the loan being repaid so that the bank would grant extensions of the loan payback date.

   21. It was further an objective of the conspiracy that the defendants and their co-conspirators engaged in financial transactions designed to launder money obtained from CGI into the Henry Espy for Congress Campaign bank accounts in a fashion designed to conceal the fact that the money represented an unlawful corporate campaign contribution.

   22. It was further an objective of the conspiracy that the defendants and their co-conspirators would and did intentionally obstruct, impair, and impede the FEC in the lawful discharge of its statutory duties, namely: (a) To prevent the FEC from learning that CGI had made an unlawful campaign contribution to the debt retirement effort of Henry William Espy, Jr. D. Means and Methods of the Conspiracy The unlawful combination, conspiracy, and agreement was to be and was accomplished by the following means and methods, and in the following manner:

   23. It was part of the conspiracy that the defendant FERROUILLET AND FERROUILLET LAW FIRM would and did issue a Continuing Guarantee of a $75,000.00 loan made by the First National Bank of Clarksdale in Clarksdale, Mississippi to Henry William Espy, Jr., the purpose of which was to pay off campaign expenses of the Henry Espy for Congress Campaign.

   24. It was further part of the conspiracy that the defendants ALVAREZ T. FERROUILLET, JR., the FERROUILLET AND FERROUILLET LAW FIRM, and MUNICIPAL HEALTHCARE COOPERATIVE, INCORPORATED, and others known to the Grand Jury, would and did make false oral and written statements to the First National Bank of Clarksdale in Clarksdale, Mississippi in order to induce the bank to make a loan of $75,000.00 and also to grant extensions of the loan obligation.

   25. It was further part of the conspiracy that the defendants ALVAREZ T. FERROUILLET, JR., the FERROUILLET AND FERROUILLET LAW FIRM, and MUNICIPAL HEALTHCARE COOPERATIVE, INCORPORATED, and others known and unknown to the Grand Jury, would and did create fraudulent documents in order to disguise and conceal unlawful campaign contributions to the Henry Espy for Congress Committee.

   26. It was further part of the conspiracy that the defendant ALVAREZ T. FERROUILLET, JR., and others known to the Grand Jury, would and did conduct and structure transactions involving proceeds of unlawful activity with financial institutions in order to launder, disguise, and conceal unlawful campaign contributions to the Henry Espy for Congress Committee. E. Overt Acts in Furtherance of the Conspiracy

   27. In furtherance of the conspiracy and to accomplish its unlawful objectives, the defendants ALVAREZ T. FERROUILLET, JR., the FERROUILLET AND FERROUILLET LAW FIRM, MUNICIPAL HEALTHCARE COOPERATIVE, INCORPORATED, and others known and unknown to the Grand Jury, committed various overt acts in the Eastern District of Louisiana, and elsewhere, among which were the following:

  1. On or about April 28, 1993, the defendant ALVAREZ T. FERROUILLET, JR., presented a letter of guarantee to the First National Bank of Clarksdale in Clarksdale, Mississippi in support of a loan application submitted by Henry William Espy, Jr., which stated in part:
    i) "Mr. Espy is due an amount equal to $75,000.00, an amount he earned for services rendered from July, 1992 to the present from Municipal Healthcare Cooperative, Inc. in assisting MHCC in securing certain government and private contracts. The said amount is vested in Mr. Espy and shall be made payable to him on June 15, 1993. . . said funds are presenting pledged to my trust account at FNBC, New Orleans, Louisiana . . .", and which also stated in part:
    ii) " I have been in communication with Ms. Jennifer Henry . . . regarding the Federal Election Commission rules for handling the said debt liquidation and the proposed lending arrangement between your bank and Henry is the best and the recommended manner of handling same . . .".
  2. On or about May 3, 1993, Henry William Espy, Jr. signed and submitted a loan application to the First National Bank of Clarksdale in Clarksdale, Mississippi, which stated that: ". . . Mr. Espy has earned $75,000.00 in fees from Municipal Healthcare Cooperative, Inc. . . ."
  3. On or about May 3, 1993, the defendant FERROUILLET AND FERROUILLET LAW FIRM submitted a Continuing Guarantee in support of a loan application submitted by Henry William Espy, Jr. to the First National Bank of Clarksdale in Clarksdale, Mississippi.
  4. On or about May 3, 1993, Henry William Espy, Jr. obtained a $75,000.00 loan from the First National Bank of Clarksdale in Clarksdale, Mississippi.
  5. On or about May 6, 1993, Henry William Espy, Jr. and the defendant ALVAREZ T. FERROUILLET, JR. opened an account at the First National Bank of Clarksdale in Clarksdale, Mississippi and deposited into said account the $75,000.00 in loan proceeds which thereafter were disbursed to creditors of the Henry Espy for Congress Committee.
  6. On or about July 9, 1993, the defendant ALVAREZ T. FERROUILLET, JR. submitted a letter to the First National Bank of Clarksdale in Clarksdale, Mississippi, which stated in part: ". . . Municipal Healthcare Cooperative, Inc. has received and escrowed for the account of Henry Espy the amount of $75,016.22 which amount is due and payable to the First National Bank of Clarksdale as per my letter dated April 28, 1993 . . .".
  7. On or about November 16, 1993, the defendant ALVAREZ T. FERROUILLET, JR., solicited an employee of the First National Bank of Commerce, Mandeville, Louisiana to draft and sign a letter with the following statement: " . . . we have confirmation that the amount of $75,000.00 is for the benefit of and for the account of Mr. Henry Espy. The funds are held in trust by Ferrouillet and Ferrouillet . . .".
  8. On or about November 16, 1993, the defendant ALVAREZ T. FERROUILLET, JR., sent the letter described in sub-paragraph (g) above to an agent who forwarded it to the First National Bank of Clarksdale in Clarksdale, Mississippi.
  9. On or about March 31, 1994, the defendant ALVAREZ T. FERROUILLET, JR. attended a fundraising dinner in Washington, D.C. for Henry William Espy, Jr. at the 116 Club. Among others, attendees at this dinner included persons who represented agricultural businesses before the United States Department of Agriculture ("USDA"). The defendant ALVAREZ T. FERROUILLET, JR. advised the attendees, which included John J. Hemmingson, that he was managing the campaign debt and that they should help Henry William Espy, Jr.
  10. On or about May 17, 1994, the defendant ALVAREZ T. FERROUILLET, JR. sent a letter to an agent of the First National Bank of Clarksdale in Clarksdale, Mississippi, which referenced in part: a) ". . . the guaranteed funds in escrow. . . ."
  11. On or about May 23, 1994, the defendant ALVAREZ T. FERROUILLET, JR. advised the FEC in a telephone call that the Henry Espy for Congress Committee would file a Year End Report of Receipts and Disbursements for 1993 and would send in a response to the FEC explaining the steps which the Henry Espy for Congress Committee would be taking to pay off the $75,000.00 campaign loan.
  12. On or about June 28, 1994, the defendant ALVAREZ T. FERROUILLET, JR. opened the Henry Espy for Congress Account at Omni Bank in New Orleans, Louisiana.
  13. On or about June 30, 1994, the defendant ALVAREZ T. FERROUILLET, JR. drafted a false and fraudulent document purporting to be an engagement letter for legal fees between the defendant FERROUILLET AND FERROUILLET LAW FIRM and CGI.
  14. On or about June 30, 1994, the defendant ALVAREZ T. FERROUILLET, JR. caused the false and fraudulent document purporting to be an engagement letter to be transmitted to John J. Hemmingson and CGI.
  15. On or about July 26, 1994, John J. Hemmingson signed a CGI check in the amount of $20,000.00 payable to the defendant ALVAREZ T. FERROUILLET, JR., Attorney-at-Law.
  16. On or about July 28, 1994, the defendant ALVAREZ T. FERROUILLET, JR. received the $20,000.00 check, traveled to a grocery store in Algiers, Louisiana, gave the check to the owner of the grocery store, received approximately $5,000.00 cash, all in $100.00 bills, and was told to return for the remaining $15,000.00 at a later time.
  17. On or about July 28, 1994, the owner of the grocery store deposited the $20,000.00 check into the grocery store commercial checking account at Mississippi River Bank in New Orleans, Louisiana.
  18. On or about and between August 1, 1994 and August 8, 1994, the owner of the grocery store withdrew $15,000.00 cash, all in $100 bills, from the grocery store commercial checking account at Mississippi River Bank in New Orleans, Louisiana.
  19. On or about and between August 1, 1994 and August 8, 1994, the defendant ALVAREZ T. FERROUILLET, JR. traveled to the grocery store in Algiers, Louisiana and obtained the $15,000.00 cash, all in $100 bills, from the owner of the grocery store.
  20. On or about August 8, 1994, the defendant ALVAREZ T. FERROUILLET, JR. traveled to the Omni Bank, Kenner, Louisiana Branch to deposit $10,000.00 where he was asked by a bank teller to produce identification. The defendant ALVAREZ T. FERROUILLET, JR. questioned the bank teller as to the reason for producing identification and was told by the bank teller that the identification was needed because the bank was required by law to fill out a currency transaction report on the deposit. After being so advised, the defendant ALVAREZ T. FERROUILLET, JR. deposited $10,000.00 cash, all in $100 bills, into the Henry Espy for Congress Account.
  21. On or about August 10, 1994, the defendant ALVAREZ T. FERROUILLET, JR. traveled to Omni Bank, Kenner, Louisiana Branch and deposited $9,000.00 cash, all in $100 bills, into the Henry Espy for Congress Account.
  22. On or about August 11, 1994, the defendant ALVAREZ T. FERROUILLET, JR. traveled to Omni Bank, Metairie, Louisiana Branch and deposited $1,000.00 cash, all in $100 bills, into the Henry Espy for Congress Account.
  23. On or about August 19, 1994, the defendant ALVAREZ T. FERROUILLET, JR. sent and delivered to the Henry Espy for Congress Committee a list of 46 individuals and falsely described these individuals as follows: "These were cash donations from friends, clients, and associates of mine in the N.O. [New Orleans] area.".
  24. On or about August 19, 1994, the defendant ALVAREZ T. FERROUILLET, JR. caused $21,000.00 to be transferred by means of wire transmission from the Henry Espy for Congress Account at Omni Bank in New Orleans, Louisiana to the First National Bank of Clarksdale in Clarksdale, Mississippi in payment on the outstanding balance of the $75,000.00 campaign loan.
  25. On or about March 27, 1995, the defendant ALVAREZ T. FERROUILLET, JR. made a false statement to Special Agents Cynthia A. Falls of the Federal Bureau of Investigation ("FBI") and Special Agent Stacy Rubey De Guerrero of the Office of the Inspector General, United States Department of Agriculture ("USDA"), while both special agents were assigned to the Office of the Independent Counsel, by stating that the $10,000.00 cash deposit which was made at Omni Bank in Kenner, Louisiana on August 8, 1994 was comprised of contributions which he had collected from people he knew, such as his clients, his relatives, his secretary, and his mechanic. After making said false statement, the defendant ALVAREZ T. FERROUILLET, JR. gave Special Agents Falls and De Guerrero a fraudulent list which he said depicted 46 cash donors who contributed the $10,000.00 which he had deposited at the Omni Bank in Kenner, Louisiana on August 8, 1994.
  26. On or about July 21, 1995, the defendant ALVAREZ T. FERROUILLET, JR. made a false statement in that he advised Supervisory Special Agent Arthur L. Wicks of the United States Customs Service, while said special agent was assigned to the Office of the Independent Counsel, that "I can save you a lot of time and work in interviewing the rest of those people. They did not give contributions. They were pledges. . ."
  27. On or about October 19, 1995, the defendant FERROUILLET AND FERROUILLET LAW FIRM issued a check from its operating account to the defendant ALVAREZ T. FERROUILLET, JR. in payment for the outstanding balance of the $75,000.00 campaign loan.
  28. On or about October 19, 1995, the defendant ALVAREZ T. FERROUILLET, JR. traveled to the First National Bank of Commerce, Lakefront Branch, New Orleans, Louisiana and used the check referenced in sub-paragraph (aa) above to purchase a cashier's check which he sent via certified mail to an attorney for the First National Bank of Clarksdale in Clarksdale, Mississippi to retire the remaining balance, plus interest and court costs, of the $75,000.00 campaign loan.

All in violation of Title 18, United States Code, Section 371.

THE GRAND JURY FURTHER CHARGES:

COUNT 2

   1. Paragraphs 3 through 27 of Count 1 are re-alleged and incorporated by reference as though set forth in full.

   2. On or about April 28, 1993, in the Eastern District of Louisiana, and elsewhere, the defendants ALVAREZ T. FERROUILLET, JR., the FERROUILLET AND FERROUILLET LAW FIRM, and MUNICIPAL HEALTHCARE COOPERATIVE, INCORPORATED knowingly made a material false statement for the purpose of influencing the action of the First National Bank of Clarksdale in Clarksdale, Mississippi, an institution the accounts of which were then insured by the Federal Deposit Insurance Corporation, in connection with a loan application, in that the defendants ALVAREZ T. FERROUILLET, JR., the FERROUILLET AND FERROUILLET LAW FIRM, and MUNICIPAL HEALTHCARE COOPERATIVE, INCORPORATED submitted a letter of guarantee to Mr. Thomas E. Garmon, Executive Vice President of the bank in support of the loan application which stated: "Mr. Espy is due an amount equal to $75,000.00, an amount he earned for services rendered from July, 1992 to the present from Municipal Healthcare Cooperative, Inc. in assisting MHC in securing certain government and private contracts. The said amount is vested in Mr. Espy and shall be made payable to him on June 15, 1993 . . . I have been in communication with Ms. Jennifer Henry . . . regarding the Federal Election Commission rules for handling the said debt liquidation and the proposed lending arrangement between your bank and Henry is the best and the recommended manner of handling same. . .", when in truth and in fact, as the defendants well knew, Henry William Espy, Jr. had not earned the stated fees at that point in time and there had been no such communication with Ms. Jennifer Henry of the Federal Election Commission.

All in violation of Title 18, United States Code, Sections 1014 and 2.

THE GRAND JURY FURTHER CHARGES:

COUNT 3

   1. Paragraphs 3 through 27 of Count 1 are re-alleged and incorporated by reference as though set forth in full.

   2. On or about May 3, 1993, in the Eastern District of Louisiana and elsewhere, the defendants ALVAREZ T. FERROUILLET, JR., the FERROUILLET AND FERROUILLET LAW FIRM, and MUNICIPAL HEALTHCARE COOPERATIVE, INCORPORATED knowingly made a material false statement for the purpose of influencing the action of the First National Bank of Clarksdale in Clarksdale, Mississippi, an institution the accounts of which were then insured by the Federal Deposit Insurance Corporation, in connection with a loan application, in that the defendants told loan officers of the bank by telephone and in person, that ". . . Mr. Espy has earned $75,000.00 in fees from Municipal Healthcare Cooperative, Inc. . . .", when in truth and in fact, as the defendants well knew, Henry William Espy, Jr. had not earned the stated fees at that point in time.

All in violation of Title 18, United States Code, Sections 1014 and 2.

THE GRAND JURY FURTHER CHARGES:

COUNT 4

   1. Paragraphs 3 through 27 of Count 1 are re-alleged and incorporated by reference as though set forth in full.

   2. On or about July 9, 1993, in the Eastern District of Louisiana and elsewhere, the defendants ALVAREZ T. FERROUILLET, JR., the FERROUILLET AND FERROUILLET LAW FIRM, and MUNICIPAL HEALTHCARE COOPERATIVE, INCORPORATED knowingly made a material false statement for the purpose of influencing the action of the First National Bank of Clarksdale in Clarksdale, Mississippi, an institution the accounts of which were then insured by the Federal Deposit Insurance Corporation, in connection with a request for a ninety (90) day extension of a loan by deferment of action in that the defendants submitted a letter to the bank which stated: ". . . Municipal Healthcare Cooperative, Inc. has received and escrowed for the account of Henry Espy the amount of $75,016.22 which amount is due and payable to the First National Bank of Clarksdale as per my letter dated April 28, 1993 . . .", when in truth and in fact, as the defendants well knew, no such sum of money had been received and escrowed for the account of Henry Espy.

All in violation of Title 18, United States Code, Sections 1014 and 2.

THE GRAND JURY FURTHER CHARGES

COUNT 5

   1. Paragraphs 3 through 27 of Count 1 are re-alleged and incorporated by reference as though set forth in full.

   2. On or about November 16, 1993, in the Eastern District of Louisiana and elsewhere, the defendants ALVAREZ T. FERROUILLET, JR., the FERROUILLET AND FERROUILLET LAW FIRM, and MUNICIPAL HEALTHCARE COOPERATIVE, INCORPORATED knowingly made a material false statement for the purpose of influencing the action of the First National Bank of Clarksdale in Clarksdale, Mississippi, an institution the accounts of which were then insured by the Federal Deposit Insurance Corporation, in connection with a request for a ninety (90) day extension of a loan by deferment of action in that the defendants caused a letter to be submitted to the bank which stated: " . . . we have confirmation that the amount of $75,000.00 is for the benefit of and for the account of Mr. Henry Espy. The funds are being held in trust by Ferrouillet and Ferrouillet . . .", when in truth and in fact, as the defendants well knew, no such funds were being held in trust.

All in violation of Title 18, United States Code, Sections 1014 and 2.

THE GRAND JURY FURTHER CHARGES:

COUNT 6

   1. Paragraphs 3 through 27 of Count 1 are re-alleged and incorporated by reference as though set forth in full.

   2. On or about May 17, 1994, in the Eastern District of Louisiana and elsewhere, the defendants ALVAREZ T. FERROUILLET, JR., the FERROUILLET AND FERROUILLET LAW FIRM, and MUNICIPAL HEALTHCARE COOPERATIVE, INCORPORATED knowingly made a material false statement for the purpose of influencing the action of the First National Bank of Clarksdale in Clarksdale, Mississippi, an institution the accounts of which were then insured by the Federal Deposit Insurance Corporation, in connection with a request for a ninety (90) day extension of a loan by deferment of action in that the defendants submitted a letter to an attorney for the bank which stated: " . . . to transfer the funds guaranteeing the principal amount of the loan extended to Mr. Espy, would have a devastating long term effect on Mr. Espy personally . . ." and which proposed a plan for a ninety (90) day extension of the loan which would include money transfers to the bank from "the guaranteed funds in escrow," when in truth and in fact, as the defendants well knew, no such funds had been escrowed.

All in violation of Title 18, United States Code, Sections 1014 and 2.

THE GRAND JURY FURTHER CHARGES:

COUNT 7

   1. Paragraphs 3 through 27 of Count 1 are re-alleged and incorporated by reference as though set forth in full.

   2. On or about July 26, 1994, in the Eastern District of Louisiana, and elsewhere, the defendants ALVAREZ T. FERROUILLET, JR., the FERROUILLET AND FERROUILLET LAW FIRM, MUNICIPAL HEALTHCARE COOPERATIVE, INCORPORATED, and others known and unknown to the Grand Jury, willfully and knowingly transported and caused to be transported in interstate commerce, namely, between the State of Montana and the State of Louisiana, money and securities with a value of $5,000.00 or more, namely, a check in the amount of $20,000.00, number 17069, dated July 26, 1994, drawn on the Crop Growers Insurance, Inc. Account at First Interstate Bank of Great Falls in Great Falls, Montana, signed by John J. Hemmingson, and made payable to "ALVAREZ T. FERROUILLET, JR. Attorney-at-Law", knowing the same to have been taken by fraud.

All in violation of Title 18, United States Code, Sections 2314 and 2.

THE GRAND JURY FURTHER CHARGES:

COUNTS 8 AND 9

   1. Paragraphs 3 through 27 of Count 1 are re-alleged and incorporated by reference as though set forth in full.

   2. On or about the dates set forth below, in the Eastern District of Louisiana and elsewhere, the defendant ALVAREZ T. FERROUILLET, JR., and others known to the Grand Jury, willfully and knowingly conducted and attempted to conduct a financial transaction involving property, as more particularly set forth below, that was and that the defendant knew represented the proceeds of specified unlawful activity, namely, interstate transportation of a $20,000.00 check taken by fraud, in violation of Title 18, United States Code, Section 2314, knowing that the transactions were designed in whole and in part to conceal and disguise the nature, location, source, ownership, and control of the proceeds of that unlawful activity:

Count Date of
Financial Transaction
Amount of
Transaction
8 July 28, 1994 $5,000.00
9 Between July 28, 1994 and August 8, 1994 $15,000.00

All in violation of Title 18, United States Code, Sections 1956(a)(1)(B)(i) and 2.

THE GRAND JURY FURTHER CHARGES:

COUNT 10

   1. Paragraphs 3 through 27 of Count 1 are re-alleged and incorporated by reference as though set forth in full.

   2. On or about the date set forth below, in the Eastern District of Louisiana, and elsewhere, the defendant ALVAREZ T. FERROUILLET, JR., willfully and knowingly caused another individual known to the Grand Jury to conduct and attempt to conduct a financial transaction involving property, as more particularly set forth below, that was and that the defendant knew represented the proceeds of specified unlawful activity, namely, interstate transportation of a $20,000.00 check taken by fraud, in violation of Title 18, United States Code, Section 2314, knowing that the transactions were designed in whole and in part to conceal and disguise the nature, location, source, ownership, and control of the proceeds of that unlawful activity:

Count Date of
Financial Transaction
Amount of
Transaction
10 July 28, 1994 $20,000.00

All in violation of Title 18, United States Code, Sections 1956(a)(1)(B)(i) and 2.

THE GRAND JURY FURTHER CHARGES:

COUNTS 11 AND 12

   1. Paragraphs 3 through 27 of Count 1 alleged and incorporated by reference as though set forth in full.

   2. On or about the dates set forth below, in the Eastern District of Louisiana and elsewhere, the defendant ALVAREZ T. FERROUILLET, JR., and others known to the Grand Jury, willfully and knowingly conducted and attempted to conduct financial transactions involving property, as more particularly set forth below, that was and that the defendant knew represented the proceeds of specified unlawful activity, namely, interstate transportation of a $20,000.00 check taken by fraud, in violation of Tile 18, United States Code, Section 2314, knowing that the transactions were designed in whole and in part to conceal and disguise the nature, location, source, ownership, and control of the proceeds of the unlawful activity and to avoid a transaction reporting requirement under federal law, to wit: the filing of currency transaction reports.

Count Date of
Financial Transaction
Amount of
Transaction
11 August 10, 1994 5:18 PM $9,000.00
12 August 11, 1994 9:20 AM $1,000.00

All in violation of Title 18, United States Code, Sections 1956(a)(1)(B)(i), (ii) and 2.

THE GRAND JURY FURTHER CHARGES:

COUNT 13

   1. Paragraphs 3 through 27 of Count 1 are re-alleged and incorporated by reference as though set forth in full.

   2. In or about August 19, 1994, in the Eastern District of Louisiana and elsewhere, the defendant ALVAREZ T. FERROUILLET, JR., and others known to the Grand Jury, willfully, and knowingly engaged and attempted to engage in a monetary transaction, affecting interstate commerce, in criminally derived property of a value greater than $10,000.00, that is, a transfer of approximately $21,000.00 in United States currency from the Henry Espy for Congress Account at Omni Bank in New Orleans, Louisiana, to the Henry Espy, Jr. and ALVAREZ T. FERROUILLET, JR. Account at the First National Bank of Clarksdale in Clarksdale, Mississippi, a financial institution, that was derived from specified unlawful activity, namely, interstate transportation of a $20,000.00 check taken by fraud.

All in violation of Title 18, United States Code, Sections 1957(a) and 2.

THE GRAND JURY FURTHER CHARGES:

COUNT 14

   1. Paragraphs 3 through 27 of Count 1 are re-alleged and incorporated by reference as though fully set forth in full.

   2. On or about March 27, 1995, in the Eastern District of Louisiana, in a matter within the jurisdiction of the Office of the Independent Counsel, and the Federal Bureau of Investigation ("FBI"), both agencies of the United States, and the United States Department of Agriculture ("USDA"), a department of the United States, the defendant ALVAREZ T. FERROUILLET, JR., knowingly and willfully made false material statements and representations, in that the defendant ALVAREZ T. FERROUILLET, JR:

  1. Agent Stacey Rubey De Guerrero of USDA, while they were then assigned to the Office of the Independent Counsel, that a $10,000.00 cash deposit which he made at Omni Bank in Kenner, Louisiana on August 8, 1994, was comprised of contributions which he had collected from people he knew such as clients, relatives, his secretary, and his mechanic on behalf of the Henry Espy for Congress Campaign, when in truth and in fact, as the defendant ALVAREZ T. FERROUILLET, JR. well knew, the $10,000.00 cash did not come from those individuals; and knowingly and willfully made and used a false writing and document knowing the same to contain false material statements and entries, in that the defendant ALVAREZ T. FERROUILLET, JR.:
  2. gave Special Agent Cynthia A. Falls of the FBI and Special Agent Stacy Rubey De Guerrero of USDA, while they were then assigned to the Office of Independent Counsel, a list which he said depicted forty-six (46) cash donors who contributed the $10,000 which he had deposited at Omni Bank in Kenner, Louisiana on August 8, 1994, when in truth and in fact, as the defendant ALVAREZ T. FERROUILLET, JR. well knew, the $10,000.00 cash did not come from those individuals.

All in violation of Title 18, United States Code, Section 1001.

THE GRAND JURY FURTHER CHARGES:

COUNT 15

   1. Paragraphs 3 through 27 Count 1 are re-alleged and incorporated by reference as though fully set forth in full.

   2. On or about July 21, 1995, in the Eastern District of Louisiana and elsewhere, in a matter within the jurisdiction of the Office of the Independent Counsel, and the United States Customs Service, both agencies of the United States, the defendant ALVAREZ T. FERROUILLET, JR. knowingly and willfully made a false material statement and representation, in that the defendant ALVAREZ T. FERROUILLET, JR. advised Supervisory Agent Arthur L. Wicks of the United States Customs Service, while he was then assigned to the Office of the Independent Counsel, that "I can save you a lot of time and work in interviewing the rest of those people. They did not give contributions. They were pledges." when in truth and in fact, as the defendant ALVAREZ T. FERROUILLET, JR. well knew, none of the individuals on the list of donors had pledged money to the Henry Espy for Congress Campaign.

All in violation of Title 18, United States Code, Section 1001.

 

A TRUE BILL:

 

 



Foreperson



DONALD C. SMALTZ
INDEPENDENT COUNSEL

Walter F. Becker, Jr.
Associate Independent Counsel
Bar Roll No. 1685
New Orleans, Louisiana
June 25, 1996

 

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