Martin Austermuhle
Former D.C. Council Chairman Kwame Brown pleaded guilty today in federal court to one count of felony bank fraud.
Appearing before Judge Richard J. Leon in U.S. District Court for the District of Columbia, Brown admitted to falsifying employment and income records in order to get two loans, one a home equity loan worth $184,000 and a second for $55,335 to purchase a boat.
According to the statement of offense, Brown claimed to be the Vice President of Strategy for an unnamed company in 2005 with a monthly income of $3,000; as proof, Brown submitted a Verification of Employment Form on which he forged the signature of college friend who he listed as the company’s president. The problem? Brown never worked for the company, but in October 2005 was granted a loan for $166,000 from Industrial Bank.
For the second loan, Brown got a little more crafty—he changed a “3” to an “8” on a 1099 from a second company he worked for, making it look like he was making $85,000 a year instead of $35,000. The altered form was faxed to Industrial Bank from his council office and dramatically improved his debt-to-income ratio (remember, he was also making over ($90,000 a year as an At-Large councilmember at the time); a $55,335 loan was granted in August 2007 for a boat that was infamously named “Bullet Proof.”
During the court proceedings, Brown quickly and quietly admitted to the charges against him, which have so far cost him his job atop the D.C. Council—his resignation was part of his plea deal—and could land him in jail for up to six months. Though bank fraud carries a maximum sentence of 30 years, prosecutors said that Brown’s first loan had been paid off and that he was current on the second one.
With sentencing set for September 20, Brown’s lawyer asked that the usual travel restrictions be waived so that Brown could leave on a week-long vacation starting tomorrow for the purposes of avoiding publicity related to the case.
In a statement delivered on the steps outside the U.S. District Court (NBC4 has the video), Brown choked up as he admitted fault and apologized to his family, friends and the city’s residents. “Six years ago, I made some very serious mistakes in judgement, and I have taken full and sole responsibility for those mistakes. Those decisions and actions should not have occurred,” he said.
Brown also forcefully addressed allegations related to his 2008 At-Large campaign, for which he has been charged with a misdemeanor violation of D.C. campaign finance rules and will head to court today to plead guilty to.
“I have not stolen or improperly used any campaign funds from either my 2004, 2008 or 2010 campaigns. I have not stolen or improperly used any public money. I am not guilty of knowingly setting up a get-out-the-vote side campaign,” he said.
Brown did admit to knowing that poll workers were being paid more than $50—which would have to be reported—but that this was a practice that was commonplace. “I am guilty of knowing that poll workers and others received more than $50 in cash payments for doing campaign work, which is and has been done in this city for years. I believe I am the only candidate that has ever been charged with a misdemeanor,” he said.
Brown also added that he never used his office for personal enrichment, seeking to distance from the acts that felled Harry Thomas, Jr. did before him. “Nor have I used my public office of position to improperly benefit or enrich myself,” he said.
