Defendant Used Straw Donors and Submitted Forged Documents to Attempt to Steal $400,000 in Matching Funds From New York City
In federal court in Brooklyn, Erlene King was charged with wire fraud in connection with her attempt to steal funds from New York City’s Campaign Finance Board (CFB).
Breon Peace, United States Attorney for the Eastern District of New York and James E. Dennehy, Assistant Director in Charge, Federal Bureau of Investigation, New York Field Office (FBI) announced the charge.
Mr. Peace expressed his appreciation to the New York City CFB for its cooperation and assistance during the investigation.
CFB Overview
The CFB oversees and administers a publicly funded campaign finance system in connection with municipal elections in New York City. This includes a “matching funds program” that provides eligible candidates with public funds based on the number and amount of certain donor contributions. According to the CFB, the program “empowers New Yorkers in every neighborhood to make their voices heard in city elections” and “by encouraging candidates to raise small-dollar contributions from average New Yorkers, the program increases engagement between voters and those who seek to represent them.”
Candidates running for the Office of the Brooklyn Borough President in the 2021 election cycle were eligible to participate in the CFB’s matching funds program if they met certain criteria. Among other things, to be eligible to receive public funds, candidates were required to meet a two-part fundraising threshold. Specifically, a candidate had to collect a minimum number of donations and raise a minimum amount of money from New York City residents before the CFB paid any matching funds.
For candidates who ran for the Office of the Brooklyn Borough President during the 2021 election cycle, candidates received up to $8 in matching funds for each $1 of eligible contributions, up to $175 per contributor. In other words, if a candidate received an eligible contribution of $175, a candidate for the Office of the Brooklyn Borough President could collect up to $1,400 in matching funds. In total, the matching funds program provided up to $1,457,777 in public matching funds to a candidate for the Office of the Brooklyn Borough President. Because campaigns for Brooklyn Borough President during the 2021 election cycle needed to raise at least $50,000 in eligible contributions to receive any matching funds, any candidate who was eligible to receive matching funds necessarily received at least $400,000 in matching funds from the CFB.
The Scheme
As alleged in court documents, King served as the campaign treasurer for a candidate who ran in a primary for the Office of the Brooklyn Borough President during the 2021 election cycle (Candidate #1). King obtained fraudulent donations for the purpose of inducing the CFB to provide matching funds to the campaign. A number of those contributions, which were obtained at King’s direction, were fraudulent nominee contributions made in the names of individuals who either did not personally fund the contributions or were later reimbursed for their contributions (i.e., straw donors). For example, King used CashApp to send money to intermediaries and instructed them to distribute the money to fund contributions from straw donors to Candidate #1. Other fraudulent contributions were made in the names of individuals whose identities were stolen and who had not personally contributed to Candidate #1. The CFB ultimately determined that the campaign submitted fictitious records and did not pay any public matching funds to the campaign.
The charges in the information are merely allegations, and the defendant is presumed innocent unless and until proven guilty. If convicted, the defendant faces up to 20 years in prison.
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