|Jefferson got money from Moyo, feds testify|
by Paul Rioux, The Times-Picayune
Friday October 17, 2008, 10:05 PM
Twice-convicted bond broker Gwendolyn Moyo funneled $20,000 in illegal proceeds to U.S. Rep. William Jefferson last year and threw him a lavish party in a private suite at a Los Angeles Lakers game, according to testimony in Moyo's federal fraud trial Friday as prosecutors rested their case.
Moyo spent $5,000 to hire an event planner and reserved a $2,000 suite at the Staples Center in Los Angeles, racking up a $5,000 catering bill for the January 2007 shindig.
She also spent $1,000 on two rooms for herself and Jefferson at the Huntley Hotel in Santa Monica, according to credit card records presented in court.
Prosecutors said the event shows Moyo's greed as she allegedly blew through money as quickly as she bilked it from more than a dozen small businesses and individuals who paid her about $2 million for phony construction bonds.
But the party also reveals Moyo's connections to powerful New Orleans area politicians.
Two months earlier, Moyo had sought Jefferson's help when the state Department of Insurance obtained a court order freezing her bank accounts and instructing her to stop selling bonds without a license.
Jefferson referred Moyo to former state Sen. Derrick Shepherd, who resigned his office and pleaded guilty last week when he admitted helping Moyo launder more than $140,000 in illegal proceeds, keeping $65,000 for himself.
Friday's testimony disclosed for the first time that Jefferson also received money from Moyo.
On Jan. 25, 2007, two days before the party, Moyo wired $20,000 to Jeffco Services, a company controlled by Jefferson's sister, New Orleans' 4th District Assessor Betty Jefferson. The next day, Jeffco Services wired $20,000 to a bank account held by the "Honorable William Jefferson, " said Melanie Haggerty, an FBI financial analyst.
Haggerty said Moyo had wired the money from an account she had opened just days earlier when she deposited nearly $60,000 from the sale of two bogus bonds. Prosecutors said this links William Jefferson to Moyo's ill-gotten gains.
Neither William nor Betty Jefferson has been indicted in the case. Both are facing federal charges in unrelated cases.
Friend of the family
FBI flowcharts presented in court to document Moyo's spending habits are rife with arrows pointing to members of William Jefferson's extended family.
Betty Jefferson's company received a total of $320,000 in four installments from November 2006 to January 2007.
In July 2007, Moyo sent a $15,000 payment to Jefferson Group Inc., a construction company run by Archie Jefferson, William and Betty's brother. Moyo has suggested the money was for repairs to her Hurricane Katrina-damaged house in the gated Eastover subdivision in eastern New Orleans.
The charts also showed about $7,500 in payments to Jefferson and Jefferson, a law firm run by two of William Jefferson's daughters, Jalila Jefferson-Bullock and Jamila Jefferson. The firm defended Moyo in the civil suit filed by the state Department of Insurance.
Prosecutors rested their case Friday afternoon after three days of testimony. They painted Moyo as the ringleader of a fairly crude scheme to sell worthless bonds printed on a form scanned into a computer.
Moyo, who is serving as her own attorney, will present her case starting Monday morning. The case could go to the jury as soon as Tuesday, U.S. District Judge Carl Barbier said.
'Way off base'
Barbier urged Moyo, who is being held in jail without bail, to spend the weekend gathering her thoughts to avoid a repeat of her rambling performances while cross-examining government witnesses.
"I've got to tell you, Ms. Moyo, pretty much everything you've said and done is way off base, " Barbier said after dismissing the jury for the weekend. "You've talked about everything under the sun except for the evidence against you."
Many of the allegedly fraudulent bonds sold by Moyo were underwritten by First Nations Insurance Group of Toronto, Canada. Prosecutors said it is a shell company that is not licensed to write bonds in the United States or Canada.
FBI Special Agent Peter Smith testified about a letter that company President Vijay Kumar sent Moyo asking for $10,000 because the locks had been changed at the corporate office after he fell behind on rent payments.
"So the multimillion-dollar company that supposedly guaranteed all of these million-dollar bonds is asking Ms. Moyo for a loan to keep the lights on?" Assistant U.S. Attorney George Kennedy said.
"That's right, " Smith said.
Moyo often found herself short on cash thanks to lavish spending on posh hotels, overseas trips, fancy cars and expensive clothing, according to an FBI analysis of charges to her bank accounts.
Haggerty said Moyo deposited a $142,232 check in a new account in May 2007. By the end of the month, Moyo had spent all but about $2,000, Haggerty said.
The check had been written by Christine Diatta as payment for a $3.5 million bond for Diatta's project to build a motel in Memphis.
The bond was supposed to serve as an insurance policy that Diatta could cash if the contractor failed to complete the job. But when the motel project ran into trouble, Diatta testified Friday that she discovered Moyo had never secured a bond.
She sent a letter asking Moyo to either refund the $142,232 bond premium or pay another contractor to finish the job. Moyo responded with a blistering letter that referenced the slave trade between the United States and Africa.
"Unfortunately, 'free labor' ended over 300 years ago for those that still seek it, " wrote Moyo, who is an African-American, as is Diatta.
Shortly after the letter was read in court, Diatta muttered something that could not be heard from the gallery but drew a protest from Moyo.
"Oh, did you hear me? I'm so sorry, " Diatta said, her voice dripping with sarcasm. "I thought I was saying it under my breath."
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Paul Rioux can be reached at email@example.com or 504.826.3785.