Charges filed against businessman Jeffrey E. Thompson

D.C. businessman Jeffrey E. Thompson, once a major government contractor, has been charged in federal court in a campaign finance conspiracy. The charges are a highly anticipated development in a long-running investigation that began with improprieties in Mayor Vincent C. Gray's 2010 campaign but later expanded greatly in scope. Related story: Jeffrey Thompson, alleged ‘shadow campaign’ funder, is charged in federal court

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UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLUMBIA

Case: 1:14-cr-00049

Assigned to Kollar-Kotelly, Colleen
Assign. Date: 3/10/2014

Description: INFORMATION (A)
Case Related to: 12-cr-156 (CKK)
18 Use. 371

(Conspiracy)

. D.C. Code
Defendant. (Conspiracy)

JEFFREY E. THOMPSON

INFORMATION
The United States Attorney charges that at all relevant times:
DEFENDANT AND HIS RELATED COMPANIES

1. Defendant JEFFREY E. THOMPSON a resident of the District
of Columbia, was the Chairman, Chief Executive Officer, and majority owner of Thompson,
Cobb, Bazilio and Associates, P.C. a for-profit corporation registered in the District
of Columbia that provided accounting, management consulting, and tax services. TCBA billed
and received millions of dollars under contracts with various District of Columbia and federal
government entities. TCBA's main office was in the District of Columbia.

2. THOMPSON was also the Chairman, Chief Executive Officer, President, and sole
owner of D.C. Healthcare Systems, Inc. an investment holding company and a for-
profit corporation registered in the District of Columbia. DCHSI's address in the District of

Columbia was the same as TCBA's address.
3. DCHSI owned D.C. Chartered Health Plan, Inc.

CHARTERED contracted with the District of Columbia government to provide managed care

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services to a substantial number of District of Columbia residents. CHARTERED's contract
with the District of Columbia, paid primarily by the federal government, totaled approximately
$300 million each year. CHARTERED's main office was in the District of Coltunbia.

COUNT ONE
(Conspiracy - Federal)

4. The allegations set forth in paragraphs 1 through 3 of this Information are re-
alleged and incorporated by reference herein.

5. The Federal Election Commission was an agency and department of the
United States with jurisdiction to enforce the limits and prohibitions of the Federal Election
Campaign Act of 1971, as amended, codified at 2 U.S.C. 431-455 (the "Election Act").
Similar to the D.C. Campaign Act, the Election Act limited financial influence in the election of
candidates running for federal office and provided for public disclosure of the financing of
federal election campaigns by limiting the amount and source of money that could be contributed
to a federal candidate and that candidate's authorized committee; prohibiting any person from
making conduit contributions; prohibiting direct contributions of corporate money to federal
candidates, their authorized committees, and political action committees and requiring
authorized committees to file periodic reports of receipts and disbursements. These periodic
reports, which were filed with the FEC and made publicly available, were intended to provide
citizens with a transparent record of such contributions to candidates for federal office.

6. From at least in or about 2006 to in or about March 2012, in the District of
Columbia and elsewhere, THOMPSON, together with others, unlawfully, willfully, and
knowingly did conspire to commit offenses against the United States, that is, violations of Title

2, United States Code, Sections 43 7g(d)(l 441a (excessive campaign contributions), 44lb

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(corporate contributions), and 441f (contributions in the name of another), and Title 26, United
States Code, Section 7206(2).

Objects of the Conspiracy
7. It was a part and object of the conspiracy that THOMPSON, together with others,

knowingly and willfully made: (1) contributions in excess of the limits of the Election Act; (2)
contributions of corporate money to candidates for federal office and a multicandidate and
(3) contributions to candidates for federal office in the names of other persons, each aggregating
$25,000 and more in acalendar year, in violation of Title 2, United States Code, Sections
437g(d)(1)(A)(i) and 44la(a)(l)(Afurther part and object of the conspiracy that THOMPSON, together with
others, unlawfiilly, willfully, and knowingly would and did willfully aid and assist in, and
procure, counsel, and advise the preparation and presentation under, and in connection with any
matter arising under, the intemal revenue laws, of a return and other document, which was
materially fraudulent and false, in violation of Title 26 United States Code, Section 7206(2).

inc!' afl Means of the Cogspiracv

9. Among the manners and means by which THOMPSON, his co-conspirators, and
others would and did carry out the objectives of the conspiracy were the following:

a. They would and did disburse excessive and unreported corporate
contributions from TCBA and DCHSI to pay for campaign services in coordination with and in
support of a federal political candidate, including the distribution and dissemination of
campaign-prepared materials in support of the federal political candidate's authorized

committee.

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b. They would and did directly and indirectly cause individuals to make
contributions to the authorized committees of candidates for the United States House of
Representatives, Senate, and President, as well as multicandidate PAC, and would and did assure
such individuals that they would be reimbursed for their contributions;

c. They would and did reimburse those contributions using funds from
THOMPSON, TCBA, and

d. They would and did misrepresent such reimbursement payments in
TCBA's accounting books and records by recording them variously as "advances," "bonuses,"
"advances on bonus," and consultant fees;

e. They would and did prepare and assist in preparing, and cause to be
prepared, false and fiaudulent documents, and make and cause to be made false representations
to the IRS, including but not limited to Forms W-2, Fonns 1099, Forms 1120 U.S. Corporate
Income Tax Return, Forms l120X Amended U.S. Corporate Income Tax Return, promissory
notes, and transactional documents.

Overt Acts
10. In furtherance of the conspiracy and to effect the illegal objects thereof,
THOMPSON and his co-conspirators committed and caused to be committed the following overt
acts, among others, in the District of Columbia and elsewhere:

a. Between 2006 and 2012, THOMPSON utilized at least 32 conduits to
make contributions to at least 13 federal candidates and a multicandidate PAC in excess of at
least $250,000.

b. During calendar year 2008, THOMPSON: directly and indirectly
caused individuals to make contributions to the authorized committees of candidates for the

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United States House of Representatives and President, as well as a rnulticandidate PAC,
aggregating $25,000 and more in that calendar year; (ii) assured such individuals that they would
be reimbursed for their contributions; and reimbursed those contributions using funds from
THOMPSON, TCBA, and DCHSI.

c. From in or about February 2008 through in or about May 2008,
THOMPSON used TCBA and DCHSI to disburse approximately $608,750 in excessive and
unreported corporate contributions to pay for campaign services in coordination with and in
support of a federal political candidate for President of the United States and the federal political
candidate's authorized committee.

d. THOMPSON caused TCBA to file false corporate income tax returns that
misrepresented, concealed, and improperly deducted TCBA's conduit contribution
reimbursement payments to certain TCBA employees in TCBA's Form 1120 U.S. Corporate
Income Tax Retums for 2007 and 2008.

(Conspiracy, in violation of Title 18, United States Code, Section 371)

COUNT TWO
(Conspiracy -- District of Columbia)

11. The allegations set forth in paragraphs 1 through 3 of this Information are re-
alleged and incorporated by reference herein.

12. The District of Columbia's Office of Campaign Finance was an agency
and department of the District of Columbia with jurisdiction to enforce the limits and
prohibitions of the District of Columbia Campaign Finance Reform and Conflict of Interest Act
of 1974, as amended (then codified at D.C. Code I-1101.01 through 1--115l.06) (the

Campaign Act"). The D.C. Campaign Act regulated the role of money in the election of

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candidates running for District of Columbia office and provided for public disclosure of the
financing of District of Columbia election campaigns by imposing limits on the amount of
money that could be contributed to a District of Columbia candidate and that candidate's
principal campaign committee; prohibiting any person (including any corporation) from making
a contribution in the name of another, including by reimbursement; and requiring principal
campaign committees to file periodic reports of receipts and disbursements. These periodic
reports, which were filed with the OCF and made publicly available, were intended to provide
voters with a transparent record of such contributions to candidates for District of Columbia
oflice.

13. From at least in or about September 2006 through in or about April 2011, in the
District of Columbia and elsewhere, THOMPSON, together with others, unlawfully, willfully,
and knowingly did conspire to defraud the District of Columbia and an agency thereof, that is,
the Office of Campaign Finance by reimbursing individuals for contributions and
funding and concealing contributions in excess of those permitted under the District of Columbia
Campaign Finance Reform and Conflict of Interest Act of 1974, as amended (then codified at
D.C. Code 101.01 through 1-1151.06) (the Campaign Act"), and thereby obstructed
and impeded the due administration of the campaign finance laws.

Objects of the Conspiracy

14. It was a part and object of the conspiracy that THOMPSON, together with others,
unlawfully, willfully, and knowingly would and did defraud the District of Columbia and an
agency thereof, that is, the OCF, by reimbursing individuals for contributions and funding and
concealing contributions in excess of those permitted under the D.C. Campaign Act to candidates
for Mayor of the District of Columbia and Member of the Council of the District of Columbia

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Council"), and thereby obstructed and impeded the due administration of the campaign

finance laws.

Manner and Means of the Conspiracy
15. Among the manners and means by which THOMPSON, his co-conspirators, and

others would and did carry out the goal of the conspiracy were the following:

a. They would and did make in-kind contributions to pay for campaign
services and campaign materials in coordination with and in support of certain candidates for
Mayor of the District of Columbia and Member of the D.C. Council and their principal campaign
committees;

b. They would and did disguise the true source of the in-kind contributions,
that is, THOMPSON and his companies, by transferring the funds through intermediaries; and

c. They would and did misrepresent and conceal from the OCF, other
candidates, and the public that they had reimbursed individuals for contributions and disbursed
in--kind contributions in coordination with and in support of certain candidates for Mayor of the
District of Columbia and Member of the D.C. Council and their principal campaign committees
by, among other things, causing principal campaign committees to submit materially false,
fictitious, and fiaudulent statements and representations to the OCF.

Overt Acts
16. In furtherance of the conspiracy and to effect the illegal object thereof,
THOMPSON, together with his co-conspirators, committed and caused to be committed the
following overt acts,-among others, in the District of Columbia and elsewhere:

a. From in or about May 2010, until on or about September 14, 2010,

THOMPSON used TCBA and DCHSI to disburse approximately $668,800 in excessive and

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unreported corporate contributions to pay for campaign services and campaign materials in
coordination with and in support of a political candidate for Mayor of the District of Columbia
and the political candidate's principal campaign committee.

b. From in or about August 2006, until in or about September 2006,
THOMPSON used DCHSI to disburse approximately $278,000 in excessive and unreported
corporate contributions to pay for campaign services and campaign materials in coordination
with and in support of a political candidate for Mayor of the District of Columbia and the
political candidate's principal campaign committee.

c. From in or about April 2007, until in or about May 2007, THOMPSON
disbursed approximately $20,000 in excessive and unreported corporate contributions to pay for
campaign services and campaign materials in coordination with and in support of a political
candidate for Ward 4 Member of the D.C. Council and the political candidate's principal
campaign committee.

d. From in or about September 2008, until in or about October 2008,
THOMPSON disbursed approximately $100,000 in excessive and unreported corporate
contributions to pay for campaign services and campaign materials in coordination with and in
support of a political candidate for At-Large Member of the D.C. Council and the political
candidate's principal campaign committee.

e. From in or about October 2008, until in or about November 2008,
THOMPSON disbursed approximately $100,000 in excessive and unreported corporate
contributions to pay for campaign services and campaign materials in coordination with and in
support of a political candidate for At-Large Member of the D.C. Council and the political

candidate's principal campaign committee.

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f. From in or about May 2010, until in or about September 2010,
THOMPSON disbursed approximately $26,000 in excessive and unreported corporate
contributions to pay for campaign services and campaign materials in coordination with and in
support of a political candidate for Ward 6 Member of the D.C. Council and the political
candidate's principal campaign committee.

g. From in or about April 2010, until in or about September 2010,
THOMPSON disbursed approximately $140,000 in excessive and unreported corporate
contributions to pay for campaign services and campaign materials in coordination with and in
support of a political candidate for Ward 1 Member of the DC. Council and the political
candidate's principal campaign committee.

h. From in or about March 2011, until in or about May 2011, THOMPSON
disbursed approximately $148,146 in excessive and unreported corporate contributions to pay for
campaign services and campaign materials in coordination with and in support of a political
candidate for At-Large Member of the D.C. Council and the political candidate's principal

campaign committee.

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i. From in or about September 2006, until in or about April 2011,

THOMPSON utilized at least 75 conduits to make contributions to at least 15 mayoral and D.C.

Council candidates in excess of at least $500,000.

(Conspiracy, in violation of Title 22, D.C. Code, Section 1805a(a)(1))

DATED: March 10, 2014

RONALD C. MACHEN JR.
United States Attorney

In and For the District of Columbia
D.C. Bar No. 447889

A

Michael K. Atkinson, D.C. Bar No. 430517
Loyaan A. Egal, New York Bar

Lionel Andre, D.C. Bar No. 422334

Ellen Chubin Epstein, D.C. Bar No. 442861
Jonathan P. Hooks, D.C. Bar No. 468570
Ephraim (Fry) Wernick, D.C. Bar No. 497158
Assistant United States Attorneys

United States Attorney's Office

555 Fourth Street, NW.

Washington, D.C. 20530

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