Ex-Texas Congressman Gets 10 Years for Fraud

HOUSTON (CN) – A federal judge sentenced former Texas Congressman Steve Stockman to 10 years in federal prison Wednesday for defrauding two businessmen of $1.2 million to fund his campaigns, chiding him for abusing the public’s trust in elections.

U.S. District Judge Lee Rosenthal also ordered Stockman, who turns 62 on Nov. 14, to pay more than $1 million in restitution.

Former Texas U.S. Rep. Steve Stockman. (AP Photo/Evan Vucci, File)

The Republican represented southeast Texas districts in the U.S. House of Representatives from 1995 to 1997 and 2013 to 2015. He made an unsuccessful run for the U.S. Senate in 2014.

Wearing an orange jumpsuit and standing next to his defense attorney, Stockman folded his arms behind his back as he listened to federal prosecutor Robert Heberle lobby for Rosenthal to sentence him to 14 years in prison.

“He used his office not to help constituents, but to commit fraud to fund his campaigns,” Heberle said.

Heberle said Stockman acted like the rules did not apply to him while serving in one of the highest offices in the U.S. “He has not expressed a whiff of remorse,” the prosecutor said.

A federal grand jury returned a superseding indictment in March 2017, charging Stockman with 24 counts, including mail and wire fraud, money laundering and making false statements to the Federal Election Commission. He was convicted of 23 counts in April.

The government accused Stockman, an accountant, of using several shell bank accounts of bogus nonprofit charities formed in his name to launder $1.2 million donated by two prolific donors to Republican political causes: Richard Uihlein, a Chicago businessman, and Stanford Rothschild, a Baltimore investment manager who died last year at age 91.

Over a four-week trial this spring, his defense team tried to portray him as a disorganized, but kind-hearted man who solicited Uihlein and Rothschild with honest intentions.

They also claimed Uihlein and Rothschild knew the donations were not going to charities.

But the bank records, emails, text messages and check stubs the government presented as evidence for the fraud, which spanned 2010 to 2014, were damning.

Federal agents arrested Stockman in March 2017 while he was boarding a plane at Bush Intercontinental Airport in Houston, the culmination of an FBI investigation that started in 2014 after news reports surfaced that Stockman’s 2012 campaign for Congress had received $15,000 in illegal donations.

An FBI forensic accountant testified in Stockman’ trial she had traced him moving $150,000 of Rothschild’s donations through seven bank accounts before spending it on trips to Disneyland, credit card debts, airline tickets, dental, medical and power bills, charges at a California tattoo parlor and several purchases from SkyMall.

Stockman’s defense attorney said at Wednesday’s sentencing hearing she had given Rosenthal 15 letters from people vouching his character.

“He’s someone who has long cared for others and done things for people long before this case was a gleam in prosecutors’ eyes. He paid for braces for neighbors’ children and he has housed troubled people his whole life,” Marlo Cadeddu said.

She said Stockman’s cellmate at the Joe Corley Federal Detention Facility, an hour north of Houston, had written a letter stating what a good influence Stockman has been on him. “I’ve been doing this for 20 years and I have never seen that,” Cadeddu said.

She asked the 35 people in the gallery to stand up if they support Stockman and 20 stood, including Richard Wilson, a 65-year-old retired engineer with a full white beard.

Wilson walked up and stood next to Stockman and said the former congressman had helped him after he lost visitation rights to his children.

“He taught me how to get laws changed in child custody visitation. It saved my family,” Wilson said.

After the hearing, Wilson said he worked on Stockman’s first congressional campaign in 1994.

“He ran a successful campaign for Congress out of his garage with less money than I think anybody has before or since,” Wilson said.

Stockman was 37 when he upset longtime incumbent Democrat Jack Brooks in the November 1994 election for Texas’ 9th Congressional District.

True to his reputation as a Tea Party-backed rebel, Stockman made headlines in January 2014 when he walked out of former President Barack Obama’s State of the Union address.

Cadeddu asked Rosenthal to sentence her client to 13 months in prison. She said 13 months was the average federal sentence for public corruption cases from 1994 to 2016.

“I ask that you to consider the entire person. The measure of no person is the worst thing they have done,” she said.

But Rosenthal was unsympathetic. With onlookers leaning in to hear her voice in the spacious courtroom, she said Stockman had shown a willingness to exploit others and ruin their lives.

“You stole money and used it for personal gain, then compounded it by abusing public trust,” she said.

Two of Stockman’s former staffers testified against him after cutting deals with prosecutors. Thomas Dodd pleaded guilty in March 2017 to mail and wire fraud and lying to the Federal Election Commission. Jason Posey pleaded guilty in October 2017 to mail and wire fraud and money laundering. They are set to be sentenced Dec. 12.

After sentencing Stockman to a decade in prison, Rosenthal said, “That’s a long time, but Mr. Stockman I think you earned it.”

Mark Michalek, supervisor of the FBI’s public corruption squad in Houston, said after the hearing that “public corruption is the FBI’s number one criminal investigative priority,” and Tuesday’s midterm elections underscored the importance of going after crooked politicians.

“So yesterday many of us took part in the American tradition of exercising our right to vote. When you cast your vote, in reality it’s a vote of confidence in the candidate’s ability to faithfully discharge the duties of the office that they’re seeking,” he said.

Michalek added, “Public officials who choose to misuse their official position for private gain undermine the integrity of government and they erode the public’s trust in the very framework of our democracy.”

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