Two Gilbert, Arizona brothers, William Tierney, and Robert Tierney were arrested and charged with wire fraud conspiracy, mail fraud conspiracy, and money laundering conspiracy for their role in a nationwide, multi-year scheme to defraud donors to at least nine political action committees in the amount of more than $23 million.
Geoffrey S. Berman, the US Attorney for the Southern District of New York said, “As alleged, the defendants secretly operated numerous political action committees, raising small-dollar donations from people who believed their hard-earned money would support the causes described in solicitation calls and mailings. In reality, as alleged, these PACs were political action committees in name only – they engaged in no advocacy campaigns, education efforts, or political operations, and donated less than one percent of the money they raised to candidates for office, all while personally enriching the defendants. Now, these so-called PACs are no longer defrauding donors, and the defendants have been charged with federal crimes.”
According to the Complaint unsealed in Manhattan federal court:
From 2014 up to the present, William Tierney a/k/a “Bill Johnson and Robert Tierney defrauded tens of thousands of donors to at least nine political action committees that they controlled, operated, and influenced. The defendants founded and directly operated six PACs, and managed, operated, or influenced three additional PACs (Scam PACs).
These nine Scam PACs – which collectively raised more than $23 million between 2014 and 2017, and more than $50 million in the past 10 years – were fraudulent entities, operated solely to enrich the defendants and their co-conspirators.
As alleged, the Scam PACs targeted victims across the country, raising funds on the basis of fraudulent representations that the donations would support voter education regarding, and the political campaigns of those who supported, various causes, including autism awareness, law enforcement, and pro-life causes—including through purported “coast to coast” education and advocacy campaigns, working with local groups and organizations, and “investing every penny . . . in the big races to come.”
In truth, virtually all of the money raised was either paid to the scheme participants or used to perpetuate the fraud through additional telemarketing, fundraising, and overhead expenditures. During the relevant time period, less than one percent of all donor money to the Scam PACs was spent on political contributions.
The defendants perpetrated the fraud through various deceptive means and methods. For example, as alleged, the defendants created and utilized a web of shell pass-through entities to conceal and disguise their fraud. Donated funds were transferred to these shell entities, which were given names that suggested activities related to marketing, consulting, and communications efforts, including for issue-specific causes – so that payments to the shell entities would appear to be for legitimate expenditures.
In at least one instance, a website was created for one of the shell entities, falsely stating that the entity provided direct marketing and political consulting services to trade associations, candidate campaigns, political action committees, and nonprofit organizations. In fact, these and the other shell entities were created by the defendants and their co-conspirators, had no active operations or employees, were retained by no outside “clients,” and served only to funnel and disguise financial transactions involving money donated to certain Scam PACs.
William Tierney also allegedly instructed two companies that made telemarketing solicitation calls for certain Scam PACs to create their own shell companies – which he referred to as “Stealth LLCs” – with names that concealed any discernible connection with their parent telemarketing vendors. This prevented the Federal Election Commission (FEC), donors, and other members of the public from being able to learn from required FEC disclosure forms that multiple Scam PACs were in fact paying the same telemarketing vendors.
As alleged, the scheme participants also used multiple fraudulent identities. William Tierney used the fake identity of “Bill Johnson” when meeting and corresponding with officials at certain fundraising call centers, including during meetings at which Robert Tierney was present. Another fake identity, “Emma Smith,” was used in fundraising solicitations, and was described as a “Volunteer Coordinator” for one of the PACs; in fact, neither Emma Smith nor the position of “Volunteer Coordinator” actually existed. The defendants also undertook efforts to avoid press coverage of the Scam PACs more generally, despite the Scam PACs’ claims in solicitation materials of national advocacy and awareness campaigns.
Donations to the Scam PACs during the relevant period totaled more than $23 million. Approximately $109,000 of those donations were directed to political candidates and more than $3.5 million was paid to the defendants personally.
William Tierney, 46, and Robert Tierney, 40, are each charged with one count of wire fraud conspiracy, which carries a maximum sentence of 20 years in prison; mail fraud conspiracy, which carries a maximum sentence of 20 years in prison; conspiracy to commit money laundering, which carries a maximum sentence of 20 years in prison; and conspiracy to engage in monetary transactions in property derived from specified unlawful activity, which carries a maximum sentence of 10 years in prison.