CHICAGO (CN) – Former Speaker of the House Dennis Hastert was charged Thursday with structuring $952,000 in cash withdrawals for $3.5 million he paid someone “to conceal his past misconduct,” and lying to the FBI about it.
The grand jury indictment states that Hastert “agreed to provide Individual A $3.5 million in order to compensate for and conceal his prior misconduct against Individual A.”
Hastert, 73, the longest-serving Republican Speaker of the House, was indicted on two counts: structuring cash transfers to evade currency transaction reports, and making a false statement to the FBI.
Speculation about Individual A – including whether it’s a man or woman – began immediately. The 7-page indictment states that he or she “has been a resident of Yorkville, Illinois and has known defendant John Dennis Hastert most of Individual A’s life.”
The New York Times reported Friday afternoon that Hastert paid off a man who told the FBI that Hastert had “inappropriately touched” him decades ago, when Hastert was a high school wrestling coach. The Times attributed the information to two people with knowledge of the FBI investigation. Hastert was a high school teacher and coach in Yorkville from 1965 to 1981.
The payoffs began in 2010, according to the indictment, when A and Hastert “discussed past misconduct by defendant against Individual A that had occurred years earlier.”
Hastert then began paying cash to A: “approximately $1.7 million in cash from various bank accounts he controlled,” and the payoffs lasted from 2010 to 2014, the indictment states.
Hastert is not charged with paying the money, but with structuring 15 withdrawals of $50,000 from three bank accounts, to duck federal requirements that transactions of more than $10,000 in cash must be reported.
He made the $50,000 withdrawals from Old Second Bank, People’s State Bank and Castle Bank, the government says. None of them are accused of wrongdoing in the indictment, which states that after bank officials began questioning Hastert about his withdrawals, in or about April 2012, he “began withdrawing cash in increments of less than $10,000.”
Hastert and A changed the schedule in 2014 and Hastert began paying $100,000 every 3 months, according to the indictment. By then, the FBI and IRS were watching him.
According to the indictment, law enforcement was concerned about whether Hastert:
a) was structuring currency transactions;
b) “was using the cash he was withdrawing to cover up past misconduct;”
c) “was using the cash he was withdrawing for a criminal purpose;
d) “was the victim of a criminal extortion related to, among other matters, his prior positions in government;” or
e) “was using the cash for some other purpose, not related to a crime or past misconduct.”
Hastert lied to the FBI when it questioned him in his hometown of Plano, Ill., on Dec. 8, 2014, according to the indictment: “Specifically, in response to the agents’ question confirming whether the purpose of the withdrawals was to store cash because he did not feel safe with the banking system, as he previously indicated, John Dennis Hastert stated: ‘Yeah … I kept the cash. That’s what I’m doing.'”
But Hastert “well knew, this statement was false,” the government says.
Each count is punishable by up to 5 years in prison and a $250,000 fine.
Hastert’s arraignment date has not yet been set.
Hastert worked as a lobbyist since he retired from Congress in 2009 – the year before the alleged payoffs began. He began his first term in 1986 and became speaker in 1999 after Newt Gingrich stepped down, facing ethics problems.
Hastert gained prominence long before he became speaker, as a leading apologist for Lt. Col. Oliver North and the Reagan administration during the Iran-Contra hearings.
Since leaving office Hastert also worked in the Public Policy and Political Law Practice at the Dickstein Shapiro law firm in Washington, D.C., from which he has resigned, according to The New York Times. The firm also removed his biography from its website.
Hastert also resigned from the board of the CME Group, of Chicago, which runs one of the world’s largest futures and derivatives exchanges.
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