Thread: Feds indict former Speaker of the House Dennis Hastert (R-IL) on bank-related charges

Professor Mundy: Plea deal possible in 'sensational' Hastert Case ...

by The John Marshall Law School

Professor Hugh Mundy says it's possible that former U.S. House speaker Dennis Hastert could cut a plea deal on federal bank fraud charges. Mundy calls the "sensational" case likely easy to prove.

Washington Post - June 9, 2015 - Hastert pleads not guilty to 2 counts of fraud charges in hush-money scandal - Read More

NBC Chicago - June 9, 2015 - Hastert Pleads Not Guilty to Federal Charges in Hush Money Case - Watch Here

Patch - June 9, 2015 - Former Speaker Pleads Not Guilty - Read More

http://news.jmls.edu/2015/06/profess...-hastert-case/

Dennis Hastert's next move: Plea deal or fight the charges?

• Former U.S. House Speaker Dennis Hastert has tough decisions to make about the future of his federal case.
  

Mike Riopell

The indignity of a first court appearance behind him, former U.S. House Speaker Dennis Hastert has a big decision to make.

The answer could be painfully difficult for everyone involved, and the consequences for Hastert and others could be vast.

Will the longtime suburban congressman go to trial to try to clear his name and disprove the charges against him?

Or will he strike a plea deal with federal prosecutors and avoid as much of a potentially messy court battle as possible?

Hastert pleaded not guilty this week, but that won't be the end of the story.

Ricardo Meza, a partner at Greensfelder, Hemker and Gale, helped explain. Meza, of Arlington Heights, is a former assistant U.S. attorney and was most recently Illinois' executive inspector general.

Now, Meza said, prosecutors and Hastert's legal team will probably talk about where the case will go.

"I suspect there will be discussions," he said.

Keep the secrets?

On the one hand, Hastert could plead guilty, opting to avoid a trial on the charges that he lied to the FBI about trying to hide cash withdrawals, all in the name of covering for what the indictment calls "past misconduct."

In this option, Meza says, Hastert perhaps could avoid any further revelations about the motivations for those cash payments. Federal law enforcement sources have told The Associated Press those motivations involve sex from a long time ago when Hastert taught and coached at Yorkville High School.

Keeping more details out of the public record could be a good motivator.

"The government doesn't have to prove motive," Meza said. "The plea doesn't necessarily require the defendant to disclose why he did those things."

Clear his name?

But a guilty plea doesn't keep the media from poking around further, and reporters from across the country have been flooding Yorkville for weeks.

Plus, Meza said, pleading guilty to lying to the FBI is no easy call. That comes with serious penalties and a permanent black mark of a conviction. Both charges carry a maximum of five years in prison and a $250,000 fine.

A trial could allow Hastert to publicly fight the charges and prevail, clearing his name in the eyes of the law and avoiding legal penalties.

A formerly powerful figure at the top of the political world might not be inclined to just roll over.

"Neither of these are small admissions," Meza said of the charges.

"Especially a defendant of that stature who has a reputation."

A message left with Hastert's attorney wasn't returned.

http://www.dailyherald.com/article/2...ews/150619757/

Patriot Act That Dennis Hastert Passed Led To His Indictment

WRITTEN BY HUFFINGTON POST POSTED: 05/28/2015, 10:58PM


On Oct. 24, 2001, then-House Speaker J. Dennis Hastert (R-Ill.), shepherded the Patriot Act through the House of Representatives. It passed 357 to 66, advancing to the Senate and then-President George W. Bush’s desk for signing. Hastert took credit for House passage in a 2011 interview, claiming it “wasn’t popular, and there was a lot of fight in the Congress” over it.

Patriot Act That Dennis Hastert Passed Led To His Indictment

Posted: 05/28/2015 11:58 pm EDT Updated: 05/29/2015 5:59 pm EDT

On Oct. 24, 2001, then-House Speaker J. Dennis Hastert (R-Ill.) shepherded the Patriot Act through the House of Representatives. It passed 357 to 66, advancing to the Senate and then-President George W. Bush’s desk for signing.

Hastert took credit for House passage in a 2011 interview, claiming it “wasn’t popular, and there was a lot of fight in the Congress” over it.

Little did Hastert know at the time that the law he helped pass would give federal law enforcement the tools to indict him on charges of violating banking-related reporting requirements more than a decade later.

The Department of Justice on Thursday announced Hastert's indictment for agreeing to pay $3.5 million in hush money to keep someone quiet about his “prior misconduct.” The indictment accuses Hastert of structuring bank withdrawals to avoid bank reporting requirements, and lying to the FBI about the nature of the withdrawals. It does not reveal the “misconduct” that Hastert was trying to conceal. The recipient of the money was a resident of Yorkville, Illinois, where Hastert taught high school and coached wrestling from 1965 to 1981.

The indictment suggests that law enforcement officials relied on the Patriot Act’s expansion of bank reporting requirements to snare Hastert. As the IRS notes, “the USA PATRIOT Act of 2001 increased the scope” of cash reporting laws “to help trace funds used for terrorism.” The Bank Secrecy Act of 1970, which was amended by the Patriot Act, had already required banks to report suspicious transactions.

The banks that Hastert frequented, the indictment states, were required to “prepare and file with the Financial Crimes Enforcement Network a Currency Transaction Report (Form 104) for any transaction or series of transactions involving currency of more than $10,000.” From 2010 to 2012, Hastert made 15 withdrawals of $50,000 from multiple bank accounts in order to make the hush money payments, according to the indictment. One or more of the banks flagged the transactions as suspicious. In April 2012, “pursuant to bank policy and federal regulations,” bank representatives questioned Hastert about the transactions, according to the indictment.

After that, according to the indictment, Hastert began withdrawing cash in increments smaller than $10,000 to avoid detection. When the FBI questioned Hastert about the purpose of the withdrawals, the indictment alleges, Hastert lied and told them he was keeping the cash for himself.

Peter Djinis, a former senior enforcement attorney in the Department of the Treasury, told The Huffington Post that the Patriot Act may have enabled Hastert's banks to communicate their suspicions with one another.

The Patriot Act immunizes banks from legal liability for sharing information about unusual customer transactions, Djinis noted. Prior to the law, those kinds of communications might have put the banks in legal danger for violating customers' privacy rights.

Now, if a bank sees "something suspicious, they can contact another financial institution and discuss what they saw to get a fuller picture," Djinis said. Since Hastert was using multiple bank accounts, he said, "there may well have been such discussions in Hastert’s case."

If the Patriot Act is ultimately Hastert's undoing, it will not be the first time the law has been used to prosecute a politician’s criminal activity. In 2008, Newsweek reported that the Patriot Act’s expanded banking disclosure requirements put the FBI on the trail of former New York Gov. Elliot Spitzer (D). Investigators identified payments made in connection with Spitzer’s solicitation of prostitutes.

http://chicago.suntimes.com/news/7/7...his-indictment

http://www.alipac.us/f9/former-u-s-r...eturns-320714/

. . . April 1997, he was convicted on 16 counts of bank fraud, misusing campaign funds for personal use and lying to investigators. After being convicted, Reynolds served the first sentence, and another 42 for the the second conviction . . .

The Patriot Act needs to be repealed in its totality. For a law that was intended to protect Americans against international terrorism to be exploited to invade the privacy and impede the financial rights of Americans, is a clear sign that this was the undisclosed intent of the law to begin with, and not to stop terrorism. In fact, I'm not even sure how the federal government can use the Patriot Act in such a manner against Hastert. When a law states it is for one thing, how can it be used for something completely different and still be a valid law? Well, it can't.

Originally Posted by Judy

He plead not guilty, the article says.

Not guilty plea upon arraignment is not too meaningful, it is always a defense attorney's advice. Jails and prisons are full of those who originally plead not guilty. That said, I am not saying Hastert is guilty as charged. That said, what is he hiding to motivate him to pay millions in hush money? I wish to hear the "rest of the story."

Originally Posted by kevinssdad

Not guilty plea upon arraignment is not too meaningful, it is always a defense attorney's advice. Jails and prisons are full of those who originally plead not guilty. That said, I am not saying Hastert is guilty as charged. That said, what is he hiding to motivate him to pay millions in hush money? I wish to hear the "rest of the story."

That's true. He may change his plea later on to avoid a trial.

Dennis Hastert and 'Individual A' leave many unanswered questions

Dennis Hastert's faculty portrait from the 1966 Yorkville High School yearbook when he taught and coached wrestling. (Chicago Tribune)


By David Heinzmann and Jeff CoenChicago Tribune contact the reporters

Hastert mystery: Case leaves open many questions about mysterious 'Individual A'


One by one, men identified by political insiders and the Kendall County rumor mill have denied being "Individual A," the mysterious figure who prosecutors say took cash from former House Speaker J. Dennis Hastert to keep quiet about a dark history with him.

They have repeatedly waved off the media, sometimes pointing to others who in turn have told persistent reporters to keep looking.

More than a month after Hastert's indictment, the identity of the person who sources said was a victim of sexual misconduct by Hastert in connection with his years as a teacher and wrestling coach at Yorkville High School remains a secret. The mystery surrounding Individual A begets more questions as the case unfolds.


Secrets of the Hastert case

Does the government regard Individual A as a victim, a witness, or as a planner taking part in an illegal scheme? Or some combination of all three? What did Individual A do with the $1.7 million Hastert allegedly gave him before investigators caught up to the former congressman's activities? And how did the two reach an agreement for Hastert to pay a total of $3.5 million, a staggering sum even for a man who turned to a lucrative lobbying career after decades in public service.

Some legal experts have speculated that Individual A is being treated as a cooperating witness. But prosecutors may not need his testimony to prove their allegation that Hastert illegally took large sums of money out of the bank without reporting it, then lied to the FBI when asked about what he was doing.

The government likely does not need Individual A's cooperation to make its case against Hastert on the bank and lying charges, said Jeff Cramer, a former federal prosecutor who now heads the Chicago office of Kroll, a corporate investigations firm. But information from the recipient of the money does help prosecutors build a more robust story around their case.

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CLOUT STREET Tribune coverage: Dennis Hastert indicted SEE ALL RELATED


"In theory, no, it doesn't matter why one takes out the money, nor why someone lies to the FBI. The fact is, they do it," Cramer said. "However, that part of the tale, if it goes to trial, the jury is going to want to hear ... It does help explain why (Hastert) was so frantically trying to get money out, and after the banks came to him, he continued."

Sources with knowledge of the case have said Hastert made payments to cover up sexual misconduct against Individual A, identified only as a man. For their part, prosecutors have yielded few clues in court paperwork about that person's identity, writing that Individual A lived previously in Yorkville and has known Hastert most of their life. In fact, prosecutors have taken steps to protect Individual A's identity, filing court papers seeking to permanently seal records that could disclose his identity.

CAPTIONNot guilty pleaTerrence A. James, Chicago Tribune
Former U.S. House Speaker Dennis Hastert leaves Chicago's Dirksen U.S. Courthouse on June 9, 2015, after pleading not guilty to charges he evaded bank regulations and lied to the FBI.

In the indictment, prosecutors noted Hastert's early career as a teacher and wrestling coach between 1965 and 1981, which sent the media digging through Yorkville High School yearbooks and knocking on doors of former high school wrestlers now in their 50s and 60s.

Legal experts agree it is likely the clues in the indictment itself are on point.

"The indictment typically will contain language that is relevant to the offense, otherwise a good lawyer is going to be able to strike language from it," said longtime defense attorney Joseph Duffy.

Since the indictment is required to outline the elements of the offense, it seems clear the government is establishing the circumstances under which Individual A was wronged by Hastert, said Duffy, who was previously a high-ranking federal prosecutor.

Allowing witnesses and victims in federal prosecutions to remain anonymous is not uncommon. But few cases share details as intriguing as the Hastert prosecution. Had the news of Individual A come out during Hastert's eight-year tenure as speaker, the case would have been a major Beltway scandal.

Adding to the secrecy surrounding Individual A, and possibly extending anonymity to that person permanently, the judge in the case has granted a prosecutors' motion for a protective order covering information surrounding the case.
Prosecutors contend that discovery material to be turned over to the defense could have an impact on "law enforcement interests" if it were made public. In their motion filed in June, prosecutors also said they were seeking to protect "the privacy interests of third parties."

Under the court order, aspects of the case related to Individual A could be filed under seal and not publicly disclosed without the court's permission. Sensitive discovery material would either be returned to the government or destroyed after the case is over.


Dennis Hastert's rise to U.S. House Speaker (timeline)

That means the identity of Individual A is unlikely to be disclosed in the court case unless Hastert decides to proceed to a trial and prosecutors needed to call Individual A to the witness stand to build the case against him. The U.S. attorney's office in Chicago declined to comment for this story.

But closing the door on the case without airing the whole story about Individual A's role may leave open questions about what the public has a right to know. Authorities have not said whether Hastert's years in Congress, including eight as speaker, had any bearing on his conduct with Individual A.

They also have not said whether Individual A owes taxes on the money. Legal experts are somewhat divided on that question.

Prosecutors described the payments from Hastert as an agreement to "compensate for and conceal his prior misconduct." Part of the intrigue, legal experts said, is whether Individual A took part in a crime by striking an agreement for hush money or whether he received an informal settlement for injuries negotiated in good faith with Hastert.

"As a general rule, compensation for injuries is not taxable," Duffy said.

However, the indictment does say the payment of money was to have Individual A help cover past misconduct, meaning keep it quiet, Duffy said, adding "payment for the concealment of past wrongdoing would be taxable."

In figuring out "the various tax possibilities of these questions, there's a lot of 'it depends,' " said Scott Coffina, a former federal prosecutor who now specializes in white-collar criminal defense and corporate investigations. The tax status of the money may be an open question at this stage in the case, he said.

"The government may ask (Individual A) about it," said Coffina, who is based in Philadelphia. "And the IRS may be interested."

But experts agreed that taking Individual A to task for any role in the alleged scheme is tricky if the government believes he was in fact a victim of sexual misconduct. If prosecutors want to treat Individual A's involvement as if he was a victim in a civil case, there may be room to do so, notwithstanding the unusual nature of the arrangement between Hastert and Individual A.

"Settlements can be pretty informal," said Michael Knoll, a tax policy expert who teaches at the University of Pennsylvania Law School. Settlements for damages related to physical injuries are tax exempt under the law, Knoll said. "The sexual abuse would trigger the physical element" of the tax exemption, he said.

But Cramer, who has experience in financial crimes prosecutions, was skeptical that the government would treat the Hastert payments as if they were a tax-free settlement.


PDF: Read the Hastert indictment

"Could lawyers argue that and try to put a square peg in a round hole? Sure lawyers can argue that. But this is not a settlement," he said.

If Individual A didn't pay taxes on the money Hastert provided, it is likely the IRS would be interested, Cramer said: "This is a pitch coming right down the plate, and the IRS is not just going to look at it without taking a swing."

Others agreed that if the tax-free settlement notion doesn't prevail, the IRS is unlikely to take a pass on taxes owed just because Individual A may have been a victim.

"A sympathetic situation doesn't mean you don't owe taxes," Knoll said.

http://www.chicagotribune.com/news/l...ry.html#page=2

Hastert faces double trouble as lawsuit proceeds

By JOSH GERSTEIN
7/23/15 6:26 PM EDT

Former House Speaker Dennis Hastert, who is facing criminal charges over allegedly hiding cash payments to cover up reported sexual impropriety, suffered a separate legal setback Thursday when a federal judge revived a lawsuit charging that Hastert misused taxpayer money.

U.S. District Court Judge Charles Kocoras had twice dismissed the 2013 lawsuit filed by Hastert’s former business partner J. David John. It alleges that Hastert misapplied federal funds for personal use at a district office Hastert operated in Yorkville, Ill. for several years after he left Congress.

However, in an order Thursday, Kocoras said John’s lawyers had cleared the legal hurdles needed to proceed with the suit.

“We find that John has pleaded enough in the allegations of his second amended complaint about the original source issue to demonstrate that he sufficiently alerted the FBI to the likelihood of wrongdoing,” the judge wrote in his 11-page ruling.

Kocoroas said John asserted he told the FBI in 2011 that “he had knowledge that Hastert was using federally funded offices, staff, office supplies and vehicles for personal business ventures.”

John said he traveled with Hastert and worked together with him on several projects, including a planned Grand Prix racetrack in Southern California and sports events to be organized in the Middle East.

Reinstatement of the civil suit poses an additional legal headache for Hastert and for federal prosecutors who obtained an indictment in May charging the former speaker with structuring bank withdrawals to avoid federal reporting requirements and with lying to the FBI about where the money was going. The indictment alleged the money was part of $3.5 million Hastert agreed to pay an unnamed longtime acquaintance to compensate for and conceal past misconduct.

A lawyer for John, Michael Goldberg, said in an interview that John’s team plans to press for testimony that could support the case.

That effort is likely to include seeking information from the FBI and Hastert.

“We welcome the judge’s decision, and we look forward to the discovery phase of the case, including written discovery and depositions,” Goldberg said.

Those kinds of inquiries are unlikely to be welcomed by the FBI or Hastert — especially in light of the pending criminal case. Either party could bring a motion to try to halt the suit until the criminal case is resolved.

Hastert is represented in the civil case by his son, Ethan, a partner at Chicago law firm Mayer Brown. Ethan Hastert did not reply to phone and email messages seeking comment.

However, when POLITICO reported in 2009 that Hastert had set up the taxpayer-funded office and was simultaneously pursuing a lobbying career, a Hastert aide said the former speaker kept the two things “completely separate.”

A spokesman for the U.S. Attorney’s Office in Chicago, which is prosecuting Hastert and represents the FBI in civil cases, declined to comment on the judge’s ruling.

John’s suit, known as a “qui tam” action, is a case filed by a private party on behalf of the U.S. Government. If the case is successful, the private party can receive up to 30% of any money recovered on behalf of the government.

The government can take over such suits and pursue them in court, but in April 2014 the U.S. Attorney’s office declined to do that. It offered no explanation for the move.

What’s less clear is whether the suit played any role in the FBI’s scrutiny of Hastert that led to the indictment earlier this year. The charges say the FBI opened that investigation in 2013, but don’t specify the reason the former speaker drew the attention of law enforcement.

The issue of who first brought Hastert’s alleged misuse of taxpayer funds to the attention of the FBI could be critical to the lawsuit’s outcome. The law only allows the first person to inform the government about such wrongdoing to pursue a claim to recover the money.

If the criminal case doesn’t result in a quick plea deal, it also has the potential to render the civil suit moot in another way: Hastert’s assets could be completely consumed paying the bills of his high-priced criminal defense team, led by Tom Green of law firm Sidley Austin.

Green did not respond to a request for comment.

http://www.politico.com/story/2015/0...#ixzz3gm6yR6eY

Remember Dennis Hastert? Why Is Media Giving Hastert a Pedophile Pass? Why the Silence?

— July 27, 2015

Why has the media backed off on Dennis Hastert? After news broke that Hastert was being indicted for allegedly trying to cover up a sexual assault committed on a male minor, the media has barely mentioned the ongoing litigation.

From 1965 to 1981, Dennis Hastert was a teacher and wrestling coach in Yorkville, Illinois. He was indicted for lying to police about $3.5 million he had agreed to pay to “cover up past misconduct.”

Don’t let this story fade, keep the pressure on Hastert.

Video at link

http://www.ringoffireradio.com/2015/...y-the-silence/