Geoffrey S. Berman, the United States Attorney for the Southern District of New York, announced today that WILLIAM TIERNEY was sentenced to two years in prison for conspiring to defraud tens of thousands of victims of more than $1 million in connection with political action committees falsely purporting to support causes including autism awareness, law enforcement support, and the pro-life movement.  TIERNEY was also ordered to pay more than $1.5 million in forfeiture and restitution to victims, as well as an additional $50,000 fine.  TIERNEY pled guilty on November 2, 2018, before United States District Judge Jesse M. Furman, who also imposed the sentence.

U.S. Attorney Geoffrey S. Berman said:  “The successful prosecution of William Tierney demonstrates the commitment of the federal government to rooting out fraud and corruption in political action committees.  Today’s sentence sends a clear warning to anyone engaged in fraudulent political fundraising:  Scam PACs are a crime and those perpetrating them will go to prison.”

According to the Information, other filings in Manhattan federal court, and evidence presented in court at sentencing:

TIERNEY defrauded tens of thousands of donors to six political action committees that he established, controlled, and operated.  These scam PACs were fraudulent entities operated to enrich the defendant, targeting victims across the country to raise funds on the basis of false and misleading representations.  The scam PACs purported to support voter education regarding – and the political campaigns of those who supported – various causes, including autism awareness, law enforcement, and pro-life causes, including through purported “coast to coast” education and advocacy campaigns, working with local groups and organizations, and “investing every penny . . . in the big races to come.”  In truth, virtually all of the money raised was either paid to TIERNEY or used to perpetuate the fraud through additional telemarketing, fundraising, and overhead expenditures.  Less than 1 percent of the money obtained by the scam PACs was contributed to candidates for office.

TIERNEY carried out the fraud through a web of shell pass-through entities utilized to conceal and disguise the scheme.  Donated funds were transferred to these shell entities, which were given names that suggested activities related to marketing, consulting, and communications efforts, including for issue-specific causes.  As a result, payments to the shell entities appeared to be for legitimate expenditures, including when publicly disclosed in Federal Election Commission (“FEC”) filings.  In at least one instance, a website was created for one of the shell entities, falsely stating that the entity provided direct marketing and political consulting services to trade associations, candidate campaigns, political action committees, and nonprofit organizations.  In fact, these and the other shell entities TIERNEY created had no active operations or employees, were retained by no outside “clients,” and served only to funnel and disguise financial transactions involving money donated to certain scam PACs.

To facilitate the fraud, TIERNEY used the false identity “Bill Johnson” when meeting and corresponding with certain vendors.  Another fake identity, “Emma Smith,” was used in fundraising solicitations, and was described as a “Volunteer Coordinator” for one of the PACs.  In fact, neither Emma Smith nor the position of “Volunteer Coordinator” actually existed.  TIERNEY also undertook efforts to avoid press coverage of the scam PACs more generally, despite the scam PACs’ claims in solicitation materials of national advocacy and awareness campaigns.

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In addition to the prison term, Judge Furman ordered TIERNEY, 47, to pay restitution in the amount of $1,175,417.23, forfeiture in the amount of $410,649.18, and a fine in the amount of $50,000.  TIERNEY was also sentenced to one year of supervised release.

TIERNEY pled guilty on November 2, 2018, to one count of conspiracy to commit wire fraud.

Mr. Berman praised the outstanding investigative work of the Special Agents of the United States Attorney’s Office for the Southern District of New York, and thanked the Federal Bureau of Investigation for its contributions to the investigation.

This case is being handled by the Office’s Public Corruption Unit.  Assistant U.S. Attorneys Alex Rossmiller and Alison Moe are in charge of the prosecution.

Geoffrey S. Berman, the United States Attorney for the Southern District of New York, announced that WILLIAM TIERNEY pled guilty today in Manhattan federal court to conspiring to commit wire fraud for inducing donations to six political action committees (“PACs”) he established and operated by misrepresenting the activities and expenditures of the PACs.  TIERNEY was arrested and charged in connection with this scheme in May 2018, and he pled guilty today to one count of conspiracy to commit wire fraud before U.S. District Judge Jesse M. Furman. 

Manhattan U.S. Attorney Berman said:  “William Tierney admitted today that he secretly operated numerous political action committees to obtain small-dollar donations from people who believed their hard-earned money would support the causes described in solicitation calls and mailings.  In reality, the PACs were political action committees in name only, contributing less than 1 percent of the money they raised to candidates for office and instead enriching the defendant, who now faces prison time for his crimes.  This is the first-ever federal prosecution of fraudulent scam PACs, but it won’t be the last.”

According to the allegations set forth in the Complaint and Information filed against TIERNEY in Manhattan federal court, and statements made in public court filings and proceedings, including TIERNEY’s guilty plea hearing:

TIERNEY defrauded tens of thousands of donors to six political action committees that he established, controlled, and operated.  These scam PACs were fraudulent entities operated to enrich the defendant, targeting victims across the country to raise funds on the basis of false and misleading representations.  The scam PACs purported to support voter education regarding – and the political campaigns of those who supported – various causes, including autism awareness, law enforcement, and pro-life causes, including through purported “coast to coast” education and advocacy campaigns, working with local groups and organizations, and “investing every penny . . . in the big races to come.”  In truth, virtually all of the money raised was either paid to TIERNEY or used to perpetuate the fraud through additional telemarketing, fundraising, and overhead expenditures.  Less than 1 percent of the money obtained by the scam PACs was contributed to candidates for office.

TIERNEY perpetrated the fraud through various deceptive means and methods.  For example, he created and utilized a web of shell pass-through entities to conceal and disguise the fraud.  Donated funds were transferred to these shell entities, which were given names that suggested activities related to marketing, consulting, and communications efforts, including for issue-specific causes – so that payments to the shell entities would appear to be for legitimate expenditures, including when publicly disclosed in Federal Election Commission (“FEC”) filings.  In at least one instance, a website was created for one of the shell entities, falsely stating that the entity provided direct marketing and political consulting services to trade associations, candidate campaigns, political action committees, and nonprofit organizations.  In fact, these and the other shell entities TIERNEY created had no active operations or employees, were retained by no outside “clients,” and served only to funnel and disguise financial transactions involving money donated to certain scam PACs.

TIERNEY also instructed two companies that made telemarketing solicitation calls for certain scam PACs to create their own shell companies – which he referred to as “Stealth LLCs” – with names that concealed any connection with their parent telemarketing vendors.  This prevented the FEC, donors, and other members of the public from being able to learn from required FEC disclosure forms that multiple scam PACs were in fact paying the same telemarketing vendors. 

To facilitate the fraudulent scheme, TIERNEY used the fake identity of “Bill Johnson” when meeting and corresponding with officials at certain fundraising call centers.  Another fake identity, “Emma Smith,” was used in fundraising solicitations, and was described as a “Volunteer Coordinator” for one of the PACs; in fact, neither Emma Smith nor the position of “Volunteer Coordinator” actually existed.  TIERNEY also undertook efforts to avoid press coverage of the scam PACs more generally, despite the scam PACs’ claims in solicitation materials of national advocacy and awareness campaigns.

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TIERNEY, 46, of Arizona, pled guilty to one count of conspiring to commit wire fraud, which carries a maximum sentence of five years in prison, and agreed to forfeit and pay restitution in an amount of at least $1.4 million.  The maximum potential sentence in this case is prescribed by Congress and is provided here for informational purposes only, as the sentence of the defendant will be determined by the court.

TIERNEY is scheduled to be sentenced by Judge Furman on February 7, 2019.

Mr. Berman praised the outstanding investigative work of the Special Agents of the United States Attorney’s Office for the Southern District of New York and of the Federal Bureau of Investigation.

This case is being handled by the Office’s Public Corruption Unit.  Assistant U.S. Attorneys Alex Rossmiller and Alison Moe are in charge of the prosecution.

Geoffrey S. Berman, the United States Attorney for the Southern District of New York, and William F. Sweeney Jr., the Assistant Director in Charge of the New York Field Office of the Federal Bureau of Investigation (“FBI”), announced today that WILLIAM TIERNEY, a/k/a “Bill Johnson,” and ROBERT TIERNEY were arrested this morning and charged with wire fraud conspiracy, mail fraud conspiracy, and money laundering conspiracy for their role in a nationwide, multi-year scheme to defraud donors to at least nine political action committees in the amount of more than $23 million.  The defendants are expected to be presented this afternoon in the District Court of Arizona.

U.S. Attorney Geoffrey S. Berman said:  “As alleged, the defendants secretly operated numerous political action committees, raising small-dollar donations from people who believed their hard-earned money would support the causes described in solicitation calls and mailings.  In reality, as alleged, these PACs were political action committees in name only – they engaged in no advocacy campaigns, education efforts, or political operations, and donated less than one percent of the money they raised to candidates for office, all while personally enriching the defendants.  Now, these so-called PACs are no longer defrauding donors, and the defendants have been charged with federal crimes.”      

FBI Assistant Director William F. Sweeney Jr. said:  “The defendants, as alleged, capitalized on the sympathy and activism of those who sought to support awareness of various causes near and dear to their hearts.  Instead, virtually none of the money raised was used for its intended purpose, and the so-called political action committees served as nothing more than a front for an extensive personal fundraising campaign.  Today's charges detail a scheme lacking in ethical oversight and laden with greed, but it all ends today.”

According to the Complaint[1] unsealed today in Manhattan federal court:

From 2014 up to the present, WILLIAM TIERNEY and ROBERT TIERNEY defrauded tens of thousands of donors to at least nine political action committees that they controlled, operated, and influenced.  The defendants founded and directly operated six PACs,[2] and managed, operated, or influenced three additional PACs[3] (“Scam PACs).  These nine Scam PACs – which collectively raised more than $23 million between 2014 and 2017, and more than $50 million in the past 10 years – were fraudulent entities, operated solely to enrich the defendants and their co-conspirators.

As alleged, the Scam PACs targeted victims across the country, raising funds on the basis of fraudulent representations that the donations would support voter education regarding, and the political campaigns of those who supported, various causes, including autism awareness, law enforcement, and pro-life causes—including through purported “coast to coast” education and advocacy campaigns, working with local groups and organizations, and “investing every penny . . . in the big races to come.”  In truth, virtually all of the money raised was either paid to the scheme participants or used to perpetuate the fraud through additional telemarketing, fundraising, and overhead expenditures.  During the relevant time period, less than one percent of all donor money to the Scam PACs was spent on political contributions. 

The defendants perpetrated the fraud through various deceptive means and methods.  For example, as alleged, the defendants created and utilized a web of shell pass-through entities to conceal and disguise their fraud.  Donated funds were transferred to these shell entities, which were given names that suggested activities related to marketing, consulting, and communications efforts, including for issue-specific causes – so that payments to the shell entities would appear to be for legitimate expenditures.  In at least one instance, a website was created for one of the shell entities, falsely stating that the entity provided direct marketing and political consulting services to trade associations, candidate campaigns, political action committees, and nonprofit organizations.  In fact, these and the other shell entities were created by the defendants and their co-conspirators, had no active operations or employees, were retained by no outside “clients,” and served only to funnel and disguise financial transactions involving money donated to certain Scam PACs.

WILLIAM TIERNEY also allegedly instructed two companies that made telemarketing solicitation calls for certain Scam PACs to create their own shell companies – which he referred to as “Stealth LLCs” – with names that concealed any discernible connection with their parent telemarketing vendors.  This prevented the Federal Election Commission (“FEC”), donors, and other members of the public from being able to learn from required FEC disclosure forms that multiple Scam PACs were in fact paying the same telemarketing vendors. 

As alleged, the scheme participants also used multiple fraudulent identities.  WILLIAM TIERNEY used the fake identity of “Bill Johnson” when meeting and corresponding with officials at certain fundraising call centers, including during meetings at which ROBERT TIERNEY was present.  Another fake identity, “Emma Smith,” was used in fundraising solicitations, and was described as a “Volunteer Coordinator” for one of the PACs; in fact, neither Emma Smith nor the position of “Volunteer Coordinator” actually existed.  The defendants also undertook efforts to avoid press coverage of the Scam PACs more generally, despite the Scam PACs’ claims in solicitation materials of national advocacy and awareness campaigns.

Donations to the Scam PACs during the relevant period totaled more than $23 million.  Approximately $109,000 of those donations were directed to political candidates and more than $3.5 million was paid to the defendants personally.

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WILLIAM TIERNEY, 46, and ROBERT TIERNEY, 40, are each charged with one count of wire fraud conspiracy, which carries a maximum sentence of 20 years in prison; mail fraud conspiracy, which carries a maximum sentence of 20 years in prison; conspiracy to commit money laundering, which carries a maximum sentence of 20 years in prison; and conspiracy to engage in monetary transactions in property derived from specified unlawful activity, which carries a maximum sentence of 10 years in prison.

The statutory maximum and mandatory penalties are prescribed by Congress and are provided here for informational purposes only, as any sentencings of the defendants would be determined by the judge.

Mr. Berman praised the investigative work of the Special Agents of the United States Attorney’s Office for the Southern District of New York, and thanked the Federal Bureau of Investigation for its assistance in the investigation.

If you think you are a victim of, or have information about, the scheme alleged in this press release, or if you are a victim of, or have information about, a similar scheme, you are encouraged to contact the FBI at 212-384-2135.

This case is being handled by the Office’s Public Corruption Unit.  Assistant U.S. Attorneys Alex Rossmiller and Alison Moe are in charge of the prosecution.

The charges contained in the Complaint are merely accusations.  The defendants are presumed innocent unless and until proven guilty.

 



[1] As the introductory phase signifies, the entirety of the text of the Complaint, and the description of the Complaint set forth herein, constitute only allegations, and every fact described should be treated as an allegation.





[2] Grassroots Awareness PAC, Americans for Law Enforcement PAC, National Campaign PAC, Voter Education PAC, Action Coalition PAC, and Protect Our Future PAC.





[3] Life and Liberty PAC, Republican Majority PAC, and RightMarch.com PAC.  These three PACs originally were founded by others.