IN THE UNITED STATES DISTRICT COI]RT FOR THE NORTHERN DISTRICT OF FLORIDA TALLAHASSEE DIVISION UNITED STATES OF AMERICA SEALED INDICTMENT 4'.lgcr1(t- SCOTT CHARLES MADDOX and JANICE PAIGE CARTER-SMITH M THE GRAND JI]RY CIIARGES: COTINT ONE Racketeering Conspiracy 18 U.S.C. S 1962(d) [- lntroduction Unless stated otherwise, at all times relevant to this Indictment: 1. Governance, Incorporated ("Govemance") was a government consulting and lobbying S-corporation based in Tallahassee, Florida. Govemance was incorporated in the State of Florida on or about May 14,1999, by defendant SCOTT CHARLES MADDOX C'MADDOX"). On or about March 12,2010, MADDOX sold Governance to defendant JAMCE PAIGE CARTER-SMITH ("CARTER-SMITH"). [n or about April MADDOX 201 0, CARTER-SMITH replaced as Governance's president and registered agent. EElrflFIED ATRI.E COPY J6sdea J. Lyubkncvlts .:.tLL:rr i. .itirl i:!_;\D iL iJiL ..t ii ifi.q.,1J 0t'* B:,. ltuall Dcprrty Clerk 2. Govemance Services LLC ("Gov. Sewices") was a govemment consulting and lobbying limited liability company based in Tallahassee, Flodda. Gov. Services was registered with the State of Florida on or about November 21, 2007, listing CARTER-SMITII as the sole managing member and registered agent. 3. Although Govemance and Gov. Services were two separate legal entities, MADDOX and CARTER-SMITH operated them and presented them to the public and their clients as a singie entity that they and their clients commonly referred to as simply "Govemance." MADDOX and CARTER-SMITH treated Govemance and Gov. Services' finances as their own by, among other things, causing payments from the companies' bank accounts to be made directly to their personal bank accounts and moving money to, ffom, and between the companies' bank accounts to pay for personal, campaign-related, and business expenses. II. The Defendants A. Defendant MADDOX 4. In or about 1993, MADDOX was elected as one of five Tallahassee City Commissioners. In or about 1997, MADDOX was elected as the Mayor of Tallahassee, and served in that position until in or about 2003. MADDOX was a govemment consultant and lobbyist beginning no later than in or about 1999, when he created Govemance. Between in or about 2003 and in or about November 2 2012, MADDOX worked as a lobbyist and ran unsuccessfully for several political offices in Florida. 5. 7n 2012, MADDOX once again ran for and won a seat on the Tallahassee City Commission. Prior to the election, MADDOX consulted with the then-City Attomey about clearing any conflicts of interest relating to MADDOX's lobbying business. MADDOX stated that he had sold Govemance and was in the process of divesting himself of the business. In fact, MADDOX continued to control and profit from Govemance and Gov. Services throughout the subsequent six years while he was a City Commissioner. 6. After being elected City Commissioner, MADDOX spoke with the then-City Attorney about MADDOX's conflicts of interest. MADDOX falsely told the City Attomey that he had potential conflicts with several "forrner" clients. In fact, MADDOX had continuing conflicts of interest with Govemance and Gov. Services' clients, many of whom did business with or were regulated in some manner by the City of Tallahassee, and some of whom had business that was voted upon by the City Commission. MADDOX concealed these conflicts of interest from the City Attorney, City Stafl City Commission, and the public. 7. On or about September 17,2014, MADDOX was interiewed under' oath by an investigator for the Florida Commission on Ethics. During this interview, MADDOX falsely stated under oath that, "when I decided to qualifz for 3 office for the City Commission in2012,I, I did no, you know, didn't receive any compensation whatsoever from Governance from then until now." When asked by the investigator whether he had "any relationship or, or, or have anything to do with [Gov. Services]," MADDOX replied, "I've never had ownership whatsoever of [Gov. Services]." In fact, between November 2012 ardthe date of that interview, MADDOX was, on an ongoing basis, serving as the point of contact at Govemance and Gov. Services for multiple clients and receiving financial benefits from Govemance and Gov. Seruices in the forms of, among other things, direct payments and expenses charged to a credit card in MADDOX's name. 8. In or about April 2015, while still serving as a Commissioner, MADDOX declaled his candidacy for the Leon County, Florida, Superintendent of Schools, and opened a bank account for his campaign. In or about June 2016, MADDOX announced his withdrawal from the Superintendent's race and announced his candidacy for reelection to the City Commission. MADDOX was reelected to another four-year term as Commissioner in November 2016. MADDOX served continuously as a Commissioner fiom November 2012 until at least December 2018. 9. On or about November 30,2016, MADDOX was deposed in a lawsuit involving his residency and eligibility to setve as a Commissioner. After tahing an oath to tell the truth, MADDOX was asked whether he or his law firm 4 had any business relationship with Gov. Services. MADDOX replied, sure whether we represented them on anything, I don't "I'm not know." MADDOX was further asked whether he, his family, or his business had any relationship with Govemance. MADDOX replied, "I don't know what relationship that would be." As MADDOX well knew, at that time, he continued to obtain financial benefits from both companies and he served as the point ofcontact for multiple clients as part of retainer agreements with the companies. 1 0. As a Tallahassee City Commissioner, MADDOX was an agent of the City of Tallahassee, and he had a fiduciary duty to act in the best interests of Tallahassee and its citizens. 11. The Community Redevelopment Agency ('CRA") was a joint City of Tallahassee and Leon County entity that was established by the Tailahassee City Commission in 1998. The CRA was comprised of a Board of Directors, whose members included all five Tallahassee City Commissioners, including MADDOX. From time to time, the Board of Directors held public meetings and voted on whether to fund redevelopment projects using City and County funds. 12. As a member of the CRA Board of Directors, MADDOX was an agent ofthe CRA, and he had a fiduciary duty to act in the best interests Tallahassee and its citizens. 5 of B. Defendant CARTER-SMITH 13. CARTER-SMITH wolked with MADDOX at Govemance beginning no later than in or about 2003. CARTER-SMITII had previously been MADDOX's chief of staffwhen he was the Mayor of Tallahassee. As stated above, CARTER-SMITII formed Gov. Selvices in or about 2007. [n2010, CARTER-SMITH became the owner and registered agent of Govemance. From that point forward, she managed Govemance and Gov. Service's operations, finances, and client relations with MADDOX and at his direction. 14. During CARTER-SMITH's July 9,2014, sworn interview with a Florida Cornmission on Ethics investigator, she was asked whether MADDOX had "any interest at all in [Govemance] from 2010 on?" CARTER-SMITH falsely replied, "He, he had some involvement with some of the clients but once he filed to lun for office, he was not involved at all." CARTER-SMITH further stated, falsely, that MADDOX was not involved in Gov. Services. III. 15. The Enterprise Govemance and Gov. Services, togethel with MADDOX, CARTER- SMITH, and others known and unknown, constituted Title an enterprise as defined in 18, United States Code, Section 196l(4), that is, a group of entities and individuals associated in fact, hereafter referred to 6 as the "Enterprise." 16. The Enterprise constituted an ongoing organization whose members functioned as a continuing unit for a common purpose of achieving the objectives of the Enterprise. The Enterprise was engaged in, and its activities affected, interstate commerce. 17. MADDOX and CARTER-SMITH controlled and operated the Enterprise. MADDOX was the leader of the Entetprise, and directed other members and associates of the Enterprise in carrying out the unlawful activities and other activities in furtherance ofthe Enterprise's affairs. Under the direction of MADDOX, defendant CARTER-SMITH was a member of the Enterprise and also directed associates of the Enterprise in carrying out the unlawful activities and other activities in furtherance ofthe Enterprise's affairs. IV, 18. Purposes of the Enterprise The purposes of the Enterprise included the following, among others: a. Enriching the members and associates of the Enterprise through, among other things, bribery, extortion, bank fraud, wire fi'aud, and rnail fraud. More specifically, a pulpose of the Enterprise was to expand and preserve Govemance and Gov. Services' client base and increase the companies' revenue. b. Advancing the Enterprise's crimes through deception by concealing and protecting the activities ofthe Enterprise from 7 detection by law enforcement, the public, the City, and others. c Promoting and enhancing the Enterprise and its members' and associates' activities. V. The Racketeering Conspiracy 19. Between in or about February 2010 and on or about the date of this Indictment, in the Northem District of Florida and elsewhere, the defendants, SCOTT CHARLES MADDOX and JANICE PAIGE CARTER-SMITH, being persons employed by and associated with the Enterprise, which engaged in, and the activities of which affected, interstate commerce, knowingly and intentionally conspired to violate Title 18, United States Code, Section, 1962(c), that is, to conduct and participate, directly and indirectly, in the conduct of the affairs of the Enterprise through a pattem of racketeering activity, as defined in Title 18, United States Code, Sections 1961(1) and 1961(5). The pattern of racketeering activity through which the defendants agreed to conduct the affairs the Enterprise consisted of multiple acts that are indictable under the following federal statutes: a. Title 18, United States Code, Section 1344(2) (Financial Institution Fraud) 8 of b. Title 18, United States Code, Section 195 I (Interference with Commerce by Extortion) c Title 1 8, United States Code, Sections 1343, 1346 (Honest Services Wire Fraud) d. Title 18, United States Code, Sections l34l , 1346 (Honest Seruices Mail Fraud) and multiple acts involving bribery that are chargeable under Florida State Statute 83 8.015. 20. It was further part ofthe conspiracy that each defendant agreed that a conspirator would commit at least two acts of racketeeling activity in the conduct of the affairs of the Enterprise. VI. Manner and Means 21. The defendants and their associates agreed to conduct the affairs of the Enterprise through the following manner and means, among others: 22. The defendants made false statements, misrepresentations, and concealed material information from a financial institution and others in order to obtain economic benefits. 23. The defendants sent and caused to be sent numelous interstate wire communications and mailings. 9 24. The defendants made false statements, misrepresentations, and concealed matelial information regalding MADDOX's affiliation with, control, and management of Governance and Gov. Services. 25. The defendants used MADDOX's official position as a City Commissioner to extofi money and solicit bribes from companies with business interests in Tallahassee. The defendants demanded, sought, and received the money and bribes with the intent that MADDOX would be influenced in the performanie of official acts, 26. as opportunities arose. MADDOX used his position as City Commissioner to take official action favorable to Govemance and Gov. Services clients, including pressuring and advising City ofhcials and voting on measures before the City Commission. A. The Short Sales 27 . Unless stated otherwise, at a1l times relevant to the short sales described below: a. institution, Branch Banking & Trust Company C'BB&T") was a financial as that term is defined in Title i8, United States Code, Section 20. BB&T's deposits wele fedelally insured by the Federal Deposit InsuLance Corporation. b. BB&T was also a mortgage lending business, as that term is defined in Title 18, United States Code, Section 2T,meaning that BB&T 10 financed or refinanced debt secured by an interest in real estate, and its activities affected interstate comlnerce. SCM Investments, LLC, ("SCM") was a limited liability c company registered with the State of Florida in Tallahassee, Florida. MADDOX fonned SCM on or about May 6, 2005. d. Maddox Acquisitions, LLC, C'MAL") was a limited liability company registered with the State of Florida in Tallahassee, Florida, with Govemance as the only member. MADDOX formed MAL on or about March 9,2007. CARTER-SMITH became the owner of MAL when MADDOX transferred Govemance to her in March 2010. Short sale transactions were a means by which financially distressed owners ofreal estate could sell the real estate to a third party buyer at a price below the amount owed on the outstanding mortgage loan. Short sales had to be approved by the mortgage lender. Before accepting a short sale, BB&T required the seller to affirm that the transaction was being made at "arms-length," to ensure that the buyer and seller did not have an undisclosed business relationship and that the sale price received reflected the fair market value of the property. BB&T also required sellers to disclose financial information so that BB&T could accurately assess the seller's ability to make mortgage payments or contribute to the short sale plice and 11 to determine whether BB&T could collect liom the seller any assets in the event of 28. a judgment. On or about June 24,2008, CARTER-SMITH, signing as the managing member of Gov. Services, executed a promissory note (the "Condo Loan") for condominium units in the Adams Street Lofts in Tallahassee, Florida. The Condo Loan promised that CARTER-SMITH would pay MADDOX, another individual, and Spectrum Resources, a company owned by MADDOX, $475,000 with 5.5Yo interest, with fulI payment due on June 1 , 2014. i. The 208 West Carolina Avenue Property 29. At all relevant times, 208 West Carolina Avenue, Tallahassee, Florida, ("208 W. Carolina") was a two-story office building located in Tallahassee. 30. On or about October 28,2005, SCM purchased 208 W. Carolina using a commercial loan of $855,000 from 31. BB&T. On or about October 20,2010, SCM defaulted on its loan with BB&T for 208 W. Carolina. 32. On or about February 7,2011, MADDOX submitted to BB&T a letter stating that "in spite of [MADDOX's] best efforts, [208 W. Carolina] has been essentially empty since 2009," and that "there have not been any offers at all in this poor economic climate." l2 33. On or about February 7,2011, in an attachment to the above- described letter to BB&T, MADDOX fuithel proposed that the bank accept a short sale of 208 W. Carolina to Gov. Services for the amount of $375,000-nearly $500,000 less than the amount for which MADDOX purchased the property tkough SCM-and included as an attachment to his letter a proposed contract sale between Gov. Services and of SCM. CARTER-SMITH signed the contract on behalf of Gov. Services and MADDOX signed the contract on behalf of SCM. At this time, the outstanding balance on MADDOX's loan was approximately $744,s03. 34. Meanwhile, MADDOX told a Govemance client that he needed money to fund a shorl sale. MADDOX obtained from the client a $120,000 check payable to Govemance, which was deposited into Gov. Services' banl< account on or about August 5,2011. MADDOX also obtained two checks totaling $95,000 from his family members and caused these checks to be deposited into Gov. Services' bank account to be used by CARTf,R-SMITH as part of the purchase price in the shorl sale transaction. Without these checks and the $120,000 deposit, Gov. Services would not have had sufficient funds to purchase 208 W. Carolina. 35. MADDOX submitted a false "Arms-Length Affidavit" to BB&T or about Augu st 22, 2011 . on The affidavit falsely stated that the "sale is an arms- length transaction between Buyer and Seller, and said Buyer, including its 13 principals, directors, and officers, is not an agent, representative, owneL, 01' employee of Seller." 36. On or about August 22,201,1, MADDOX submitted a Full and Final Settlement Agreement to BB&T, signed by MADDOX, falsely stating that the buyer was an "unrelated party" to SCM. 37. Based on the information MADDOX submitted, BB&T agreed to the short sale of 208 W. Carolina to Gov. Services for approximately $465,000 from Gov. Services and a promissory note of approximately $150,000 from SCM to BB&T. BB&T forgave approxirnately $129,503 of SCM's debt in the transaction, not including the promissory note. MADDOX paid only approximately $30,000 on the SCM promissory note before defaulting. ii. 3 8. The 510 North Adams St. Property 510 North Adams Street, Tallahassee, Florida C'5 10 N. Adams") was a house located in downtown Tallahassee that was, at times, used in part as an office building. 39. On or about March 15, 2007 ,MN- pulchased 5 l0 N. Adams for $550,000, using a commercial loan of $495,000 from BB&T. To secure this moltgage loan through MAL, Gover:nance and MADDOX, personally, guaranteed the loan. t4 40. On or about March 15, 2007, in order to secure the 510 N. Adams loan from BB&T, MADDOX submitted to BB&T a Declaration of Limited Liability Company or Limited Liability Partnelship and Authority to Borrow. Thrs document, which MADDOX signed as the plesident of Govemance, stated that MADDOX would "promptly notifu [BB&T] if any other person, or legal entity acquiles an ownership interest in [MAL]." MADDOX never notified BB&T that, in or about March 2010, he sold Govemance, which wholly owned MAL, to CARTER-SMITH. 41. On or about March 15, 2012,MAL and MADDOX defaulted on the BB&T loan for 42. 5 10 N. Adams. In or about March2}l2, MADDOX informed BB&T that he wished to engage in a short sale for the 510 N. Adams property. MADDOX stated that he had an offer from a buyer, Gov. Services, for $225,000----over $250,000 less than the amount lor which MADDOX purchased the property-and MADDOX would supplement this offer with $75,000 cash. BB&T preliminarily accepted the sale price and negotiated a cash supplement fi'om MADDOX of $100,000, subject to the submission of the below-described documents and their accompanying affinnations. BB&T forgave apploximately $133,448, the remaining amount of debt on the mortgage loan, by accepting the short sale. 15 43. On or about August 28, 201,2, in suppoft of his request to BB&T for a short sale of 510 N. Adams, MADDOX submitted a Personal Financial Statement to BB&T that claimed that he had no significant assets beyond 510 N. Adams and his personal residence. ln doing so, MADDOX concealed from BB&T, among other assets, (1) S34,000 in his personal bank account, (2) real propefiy in Madison County, Florida, (3) the balance and interest due to him fi'orn the Condo Loan as an asset, and (4) approximately eight vehicles that 44. MADDOX owned. In or about December 20]2. MADDOX submitted to BB&T documents falsely stating that he was the "president" of Govemance at the time of the sale. 45. On or about December 14,2012, MADDOX submitted to BB&T a Arms-Length Affidavit, which he signed on or about December 14,2012. The affidavit falsely stated that the "sale is an arms-length transaction between Buyer and Seller." The affidavit fuither falsely stated that, "said Buyer, including its principals, directors, and off,rcers, is not an agent, representative, owner, or employee of Seller." 46. On or about December 14,2012, MADDOX submitted to BB&T a "Full and Final Settlement Agreement" falsely stating that "Borrower cunently own[ed] the Property and desire[d] to sell it, but ha[d] been unable, despite Borower's best efforts, to enter into a contract to sell [510 N. Adams] for a price 16 sufficient to generate net sale proceeds to fully pay the remaining indebtedness due on the loan." 47. This Full and Final Settlement Agreement also falsely stated that the buyer, Gov. Services, was an "unrelated paty" to MAL. 48. On or about December 13,2012, in order to satisfy his obligation to pay $100,000 to BB&T under the terms of the short sale, MADDOX caused $100,000 to be wired from Gov. Services' bank account into MADDOX's personal bank account. To conceal that he had received the money from Gov. Serwices, MADDOX then purchased a cashier's check in the amount of $100,000 payable to Governance and deposited the cashier's check into the Governance bank account. MADDOX then purchased a $100,000 cashier's check payable from the Governance bank account to the closing agent for the short sale. B. The Clients i. 49. Company A At all relevant times, Company A was an architectural engineering firm that did, or sought to do, business in the Tallahassee area, including with the City of Tallahassee and Leon County. Company A was on, or sought to be on, a City Commission-approved bidders list for City contracts. Once a company was voted onto the approved bidders list, City officials had the discretion to hire the company fol City-funded projects, and to negotiate with the company on issues t7 that arose relating to such projects. Engineering firms such as Company A that did business in and with the City of Tallahassee were also subject to various permitting and licensing approvals that were left to the discretion of City officials. 50. In or about 2007, Company A hired Govemance as its goverunent consultant, and began paying Governance a monthly retainer fee for MADDOX's consulting and lobbying services. Company A stopped making these payments in May 2011. 51. In or about May 2012, during a meeting with Company A executives, MADDOX stated that he would make sure that an individual who had supported MADDOX's opponent in a previous political campaign, and who owned an architectural engineering fum that was Company A's competitor', would never again do business in the City of Tallahassee. At the time, MADDOX was running for City Commissioner. MADDOX made this statement with the intent to place Company A in fear of economic harm to induce Company A to pay MADDOX. 52. During the meeting, a Company A employee asked MADDOX how Company A could help with MADDOX's political carnpaigr. MADDOX replied that Company A could catch up on its payments to Govemance. 53. Thereafter, beginning on or about May 10,2012, based on their fear of economic harm, Company A paid Governance a monthly retainer fee ranging frotn approximately $2,000 to $5,000. Once MADDOX was elected in November 18 2012, Company A continued to pay Govemance a monthly retainer fee until on or about October 27,2015, when Cornpany A stopped paying Govemance. Between on or about May 10,2012, and on or about October 27,2015, MADDOX held hirnself out to Company A as Cornpany A's goverrunent consultant and lobbyist. 54. After MADDOX was elected to the City Commission, and during the course of Company A's payments to MADDOX, he did not disclose to the City Attomey or the City Commission that he represented Company A. Nor did MADDOX disclose to the City Attorney or the City Commission that Company A was paying Govemance and/or Gov. Services, and that MADDOX was receiving payments from both entities 55. On or about November 26,2073, the City Commission voted on whether to authorize City offrcials to negotiate and execute with a list of ten firms, including Company A, contract extensions for water resources engineering. MADDOX voted in favor. 56. On or about August 19, 2015, the City Commission voted on whether to authorize City officials to negotiate and execute with a list of ten firms, including Company A, contract extensions for water resources engineering. MADDOX voted in favor. 57. From time to time, Company A would miss its monthly payments to Gov. Services, and MADDOX would contact 19 a representative of Company A and state, "show me some love," which meant that Company A should catch up on monthly payments. However, during this time, MADDOX did not provide to Company A any services in the form of lobbying, consulting, or otherwise, besides introducing Company A to the owner of Company E, which was also paying Gov. Services a monthly retainer fee at the time. 58. Between in or about May 2012 and on or about October 27,2015, Company A paid Govemance and Gov. Services approximately $61,500. ii. 59. Company B At all relevant times, Company B was a rideshare company that operated across the United States. 60. In 2015, the Cify Commission was considering making amendments to a local ordinance that would affect Company B's ability to profitably operate in Tallahassee, and the amendments were set to be voted upon by the Commissioners. 61. On or about March2,2015, Person A, who was a govemment relations professional employed by Company B, met with MADDOX to discuss the lideshare ordinance. MADDOX was non-committal and stated that he was being lobbied by Company B's opponent on the ordinance, namely, the taxi industry. MADDOX furthel stated that CARTER-SMITH could help Company B obtain a favorable resuit on the ordinance. 20 62. Thereafter, with MADDOX's knowledge and at MADDOX's direction CARTER-SMITH met with Person A, and solicited payrnents from Company B, in exchange for MADDOX's vote on the ordinance and lelated ISSUCS. 63. On or about March25,2015, CARTER-SIvIITH procured Company B's agreement to pay Govemance a $5,000 monthly retainer for her "consulting" servtces. 64. After securing Company B's agreement to pay Govemance, CARTER-SMITH served as a go-between for communications between Company B representatives and MA-DDOX. 65. On ol about March 25, 2015, the City Commission met to vote on whether to delay passage of an amended ordinance that would have made it difficult for Company B to operate profitably in Tallahassee. A lelated issue discussed at the meeting was whether the pre-existing ordinance would be enforced against Company B's drivers. Such enforcement would have potentially subjected Company B's drivers to criminal and/or civil liability. 66. Shortly before the meeting, CARTER-SMITH sent Person A message stating, in part, "Comm Maddox a text will make the motion [to delay a vote on the ordinance]." MADDOX then moved to delay the vote and the Commissioners voted unanimously for the delay. On the dais, MADDOX stated that he had a long 2t history of supporting the taxi cab industry and that the existing ordinance should be enforced. Shortly after the meeting, CARTER-SMITH sent Person A three consecutive text messages stating, "A message," "Don't wony about enforcement," and "We'll discuss." 67. On July 8, 2015, the City Commission again rnet to discuss amendments to the rideshare oldinance. Prior to the meeting, CARTER-SMITH texted Company B representatives, stating, "Maddox is going to be at the important part of the meeting see l.rim :, . . . . I did not want you to panic when you did not there." During this meeting, CARTER-SMITH told Company B representatives by text message that she was passing their messages onto MADDOX, and asked questions to Company B representatives that purportedly came fi'om MADDOX. For instance, CARTER-SMITH texted a Company B representative asking whether they were "ok with removing insurance requirement." After receiving an afhrmative response, CARTER-SMITH replied, "Ok. He said up to u." 68. At this July 8 meeting, MADDOX took several votes to make amendments to the ordinance and a final vote to adopt the new ordinance as amended. All of the requests that Company B made to CARTER-SMITH MADDOX were incorporated into the resulting ordinance. 22 and 69. Between on or about May 7 , 2015, and on or about October 15, 2015, Company B paid Governance $30,000. During the same time period, Govemance and Gov. Services made approximately $40,000 in payments to MADDOX directly. iii. 70. Company C At all relevant times, Company C was a waste services provider. On ol about March 20,2006, Company C entered into a contract with Govemance by which Govemance would serye as Company C's "Marketing and Planning Consultant." Company C's agreement with Govemance permitted Company C to call upon MADDOX and CARTER-SMITH fol their assistance in worting with City officials and govemment offrcials in Florida on an as-needed basis. In exchange, Company C paid Govemance a $4,000 monthly retainer. On or about September 8,2006, the City ofTallahassee entered into a seven-year contract with Company C for waste management selices. 71. In or about September 2012,the City Commission voted to extend Company C's contract for five years such that the contract would be up for renewal and would require another City Commission vote in September' 201 8. 72. Beginning no later than in or about November 2012, Person B was a regional vice president at Company C selving the Tallahassee area. ,L3 73. After MADDOX was elected to the City Commission, and during the course of Company C's payments to Govemance, he did not disclose to the City Attorney or the City Commission that he managed the operations and finances of Govemance and Gov. Services. In fact, MADDOX falsely characterized Company C to the City Attorney as a "former" client. Nor did MADDOX disclose to the City Attorney or the City Commission that Company C was paying Governance and/or Gov. Services, and that MADDOX was receiving payments from both entities. After being elected to the City Commission, MADDOX, implicitly and explicitly, continued to solicit and accept payments from Company C in exchange for MADDOX's agreement to engage in official acts to benefit Company C as opportunities arose. 74. In or about December 2013, MADDOX proposed a new contract between Gov. Services and Company C which was entered into in or about January 2014. This contract increased Company C's monthly retainer fee to Gov. Services to $4,500, and listed Gov. Services as Company C's "marketing and govemment consultant in Tallahassee, Florida." 75. In or about luly 2014, Tallahassee fined Company C approximately $64,000 for failing to deliver trash receptacles for City residents. Person B made multiple unsuccessful attempts to appeal directly to City employees to reduce the fine. Person B then called MADDOX, and asked MADDOX to intercede with the 24 City ernployees to get the fine reduced. MADDOX indicated to Person B that he would resolve the issue. MADDOX spoke with the City Manager, and the fine was ultimately reduced to approximately $7,000. 76. Before and after the fine was reduced, CARTER-SMITH e-mailed three written updates to Company C stating that Govemance was working on and succeeded in reducing the fine. 77. Between in or about November 2012 and in or about Aprit2017, Company C paid Governance and Gov. Serices approximately $190,000. iv. Company D 78. At all relevant times Company D was a construction company operating primarily in and nearby the City of Tallahassee. 79. Beginning in or about 2005, Company D's owner, Person C, negotiated a contract with MADDOX for Governance to be Company D's lobbyist. In or about 2005, Company D began paying Govemance a monthly retainer fee of $6,500. In or about 2010, Company D reduced the monthly payments to Govemance to $2,500. 80. When MADDOX was elected to the City Commission in November 2012, Company D continued to make these payments to Govemance. MADDOX, irnplicitly and explicitly, continued to solicit and accept these payrnents from 25 Company D in exchange foI MADDOX's agreement to engage in official acts to benefit Company D as oppofiunities arose. 81. On or about January 22,2014, MADDOX voted against amendments to a City administrative policy that MADDOX knew posed economic challenges to Company D. Prior to the vote, MADDOX sent a text message to Company D's owner asking whether he had any suggested changes fol the policy. Before casting his vote and while on the dais, MADDOX questioned the policy's constitutionalitv. 82. On or about November 24, 2015, the City Commission voted on whether to approve three-year contract extensions with nine firms, including Company D, which had been prequalified to perform sidewalk construction and rehabiiitation services. MADDOX made the initial motion for approval and voted affirmatively to approve. 83. In or about December 2015, Company D was in a dispute with City officials conceming a Company D construction proj ect contracted by the City. After failing to resolve the dispute in direct cornmunications with City officials, Company D representatives met with MADDOX to request that MADDOX interuene to resolve the dispute in a manner favorable to Cornpany agreed to do so. 26 D. MADDOX 84. On or about December 14,2016, MADDOX voted to approve an extension of a City Contract with Company D. That evening, after the vote, Person C sent MADDOX a text message stating, "You do good work." Minutes later, MADDOX replied, "I love it when a plan comes together!" 85. In considering and voting on these matters, MADDOX failed to disclose to the City Attorney and City Commission that Gov. Services was being paid by Company D, that MADDOX had an ongoing financial interest in Gov. Services, or that MADDOX had an ongoing retainer agreement with Company D. 86. Between in ol about November 2012 and in or about October 2017, Company D paid Govemance and Gov. Serwices approximately $146,000. v. 87. At al1 Company E relevant times, Company E was a residential development company. Person D was an owner of Company E. 88. In or about 2003, Company E began paying Govemance a monthly $2,500 retainer for lobbying work in and around Tallahassee. In or about 2007, Company E increased its monthly payments to $7,000. 89. In or about November 2012, shortly before or after being elected to the City Commission, MADDOX told Person D that Company E's monthly payments should be sent to Gov. Serwices rather than Governance. After he was elected, MADDOX, implicitly and explicitly, continued to solicit and accept 21 payments fiom Company E in exchange for MADDOX's agreement to engage in official acts to benefit Company E as opportunities arose. 90. In or about March2017, Person D met with MADDOX and CARTER-SMITII. During the meeting, Person D stated that he would soon be needing additional assistance from MADDOX in Company E's dealings with City officials. MADDOX and Person D agreed that Company E would rnake a onetime payment to Gov. Services of $10,000 followed by six monthly payments of $5,000. 91. Shortly thereafter, Person D contacted MADDOX about the City's refusal to approve a certain type of fencing in one ofCompany E's residential developments. Person D asked MADDOX to intervene with the City officials so that the stafl would change its decision on the fence. MADDOX agreed to do this. MADDOX then contacted the City Manager. 92. Several days later, a City official e-rnailed Person D to inform him that the City had changed its position on the fence. On March 13, 2016, Person D forwarded this e-rrail to MADDOX. MADDOX replied, by e-mail, "I love it when a plan comes together." 93. In or about January 2017, Company E was facing an issue concerning the City of Tallahassee Utilities Department's work at one of Company E's apartment complexes. On or about January 25,2017, Person D sent MADDOX a 28 text message regarding the issue. Less than two hours later, MADDOX responded, by text message, "Al1 good. I can handle city guy no prob. Already had aword at the top. Should be straightened out." 94. Between in or about November 2012 and in or about March2}l7, Company E and its affiliates paid Gov. Services approximately $138,000. vi. 95. Person E In or about January and February 2016, the CRA was considering granting funds in the form oftax incentives for a development project in Tallahassee. 96. Person E was a local developer and one of the applicants for the tunding. 97. Person F was a local business owner and associate of 98. In or about February 2016, Person F, at MADDOX's direction, told MADDOX. Person E that Person E should pay Govemance and/or a Govemance employee as a consultant in exchange for MADDOX's vote on the project. Person F indicated to Person E that this was a message coming fi'om 99. MADDOX. Person E refused to pay Govemance or hire any of its employees as a consultant or otherwise. 29 100. On or about February 27 , 2014, the CRA voted to fund the project for approxirnately $1.6 million. MADDOX did not attend the CRA meeting in which the project was funded. vii. 1 01. Company F Between in or about July 2016 and on or about May 24, 2017, Company F served as a front for undercover Federal Bureau of Investigation agents who were investigating allegations of criminal activity in Tallahassee. The agents posed as lepresentatives of Company F who were real estate and medical marijuana entrepreneurs. Arnong the projects Company F was pursuing were real estate developments in the Tallahassee area. Each project required or would benefit from the Tallahassee City Commission taking official action, such as rezoning property or annexing certain property into the City's limits. The CRA could also provide grant funding for the projects. 102. At al1 relevant times, Person G was a local real estate developer and entrepreneur. I 03. On or about July 21, 201 6, Person G spoke to a Company F representative about a potential real estate deal in the Tallahassee area and identified MADDOX as the most powerful member of the CRA. 104. On or about September 21,2016, Person G met with a Company F representative and other individuals. During this meeting, Person G agreed to 30 secure MADDOX's support for a potential project by Cornpany F in exchange for' Company F paying Person G a percentage of the dea1. Person G said that Maddox would be able to support the project by cornrnitting official acts such as convincing other Cornmissioners to support the project. Person G stated that MADDOX "effectively gets paid through the lobbying firm." Person G stated that the amount that Cgmpany F would need to pay MADDOX through the lobbying firm would increase based on the political difficulty of authorizing the project. Person G gave the example that Company F may need to pay MADDOX's lobbying firm $10,000 per month for perhaps as long as three years if the value ofthe benefit to be obtained by Company F from a Tallahassee-area governmental agency was $3 million. 105. On or about October 1,2016, a Company F representative met with MADDOX. Another individual present stated that the Company F representative was seeking to do several real estate deals in Tallahassee. The Company F representative then told MADDOX that Person G recommended that he meet MADDOX. MADDOX responded, "[Pelson G] is my guy." 106. On or about October 4,2016, a Company F representative met with MADDOX in Tallahassee. During the conversation, the representative asked, "So can we hire you as, 1ike, a consultant? Like you have a business, right?" MADDOX replied, "Not me. I can tell you somebody that you can hire. But not 3l me." The representative asked if he could pay MADDOX's law firm to consult on the project. MADDOX replied, "You wouldn't want to do that. You wanna pay the consulting firm that I told you, so that I would not be conflicted out . . . You'd wanna hire Govemance Incorporated." The representative then asked, "[Person G] will tell me that, right?" MADDOX replied, "[Person G] will tell you who it is." Later on in the conversation, the representative asked, "What would I need to pay you, uh, not you, but your, what would I need to put in the coffers a month to start the ball rolling?" MADDOX replied, "Twenty." The representative asked, "Twenty a month?" MADDOX replied, "Yeah." The representative said to MADDOX, "That's a lot of money." MADDOX replied, "No it's not." 107. On or about October 79,2076, Person G and a Company F representative agreed that Company F would pay MADDOX $10,000 per month, and that Person G would follow up with fufther logistics as to how to make the payments. 1 08. On or about October 24, 2016, Person G confirmed that the payments should go to Govemance and that such payments were "definitely for MADDOX . . . , there's nobody else in Govemance other than Paige, which is MADDOX, effectively." Person G said that MADDOX wanted "to keep his conversations narrowed to one person." Person G further advised with regard to getting payments to MADDOX, "Governance is the answer," and that Person G 32 would have a discussion with MADDOX about how MADDOX wished to "receive those funds . . . into Govemance." I 09. On or about October 29, 2016, Person G told a Company F representative that MADDOX wanted to deal only with Person G, because MADDOX did not "want any more friends" and did not want to have "inappropriate conversations" with anyone but Person G. 1 10. On or about October 29, 2016, MADDOX met with a Company F representative and confirmed that Company F's $10,000 payrnent should be made to Governance; in exchange, MADDOX, implicitly and explicitly, agreed to pedorm official acts to benefit Company F. MADDOX fuilher advised that CARTER-SMITH was on board with how and why these payments were being made to Governance and that MADDOX had no secrets fi'om CARTER-SMITH. MADDOX reiterated that if Person G was on board, MADDOX was on board. 111. On or about November 16, 2016, Company F mailed Postal Service for $ a check via U.S. 10,000 to Govemance, and on or about January 23, 2017 , Company F mailed a check via U.S. Postal Service to Gov. Services for $10,000. 1 12. On or about December 1 8, 201 6, and on or about February 22, 2017, Company F sent checks for'$10,000 each to Gov. Services via the United Parcel Service. JJ 113. On or about December 16,2016, CARTER-SMITH sent Company F a "Consulting Agreement." The agreement stipulated that Gov. Services would provide "marketing" and "govemment consulting services" to Company F for $ 10,000 per month for twelve months. 1 14. In or about December 20i6, MADDOX traveled to and from Las Vegas, Nevada, with Company F representatives. MADDOX accepted a flight to Las Vegas on a chartered jet from Company F. MADDOX also accepted a hotel room and meal expenses paid by Company F representatives. During this trip, MADDOX told an anecdote about threatening to destroy a former client's business deals if the former client did not pay 1 15. Following MADDOX his fee. the issuance of Federal Grand Jury subpoenas to the City of Tallahassee in or about May 2077, MADDOX and CARTER-SMITH caused to be purchased cell phones, which were not registered to a specific person, to be used for communications between MADDOX, CARTER-SMITH, and others, including a City of Tallahassee staff member 116. On or about May 24,2017, MADDOX and CARTER-SMITH were interviewed by federal law enforcement agents about their interactions and business relationships with Company F and its representatives. MADDOX falsely stated to the agents that Company F representatives had not attempted to pay him any money, that MADDOX was not involved in Company F's introduction to 34 CARTER-SMITH, and that MADDOX had no relationship with Govemance. CARTER-SMITH falsely stated that she was the only person associated with Governance All in violation of Title 18, United States Code, Section 1962(d). COUNTTWO Bank Fraud - 208 W. Carolina 18 U.S.C. $$ 1344(2) and 2 I. 1. Paragraphs 1 Introduction through 14,24,and 27 through 28 ofCount One are realleged and incorporated by reference as if fully set forth herein. II. 2. The Charge Between on or about February 7,2011, and on or about August 22, 2011, in the Northem District of Florida, and elsewhere, the defendants, SCOTT CHARLES MADDOX and JAIITCE PAIGE CARTER-SMITH, did knowingly execute and attempt to execute a scheme to obtain money, funds, credits, assets, and other property owned by, and under the custody and control of, BB&T, by means of materially false and fraudulent pretenses, representations, and promlses. 35 III. 3. The Fraudulent Scheme The fraudulent scheme is summarized in paragraphs 22 and 29 through 37 of Count One, which ate realleged and incorporated by reference as if fully set forth herein. IV. 4. Execution of the Scheme On or about August 22,2011, for the purpose ofexecuting and attempting to execute this fraudulent scheme, MADDOX and CARTER-SMITH, did knowingly submit and cause to be subrnitted false documents, including a and Final Settlement Agreement and an Arm's Length Affidavit, to obtain, in support of and in the closing of Fu11 BB&T to the short sale of 208 W. Carolina. In violation of Title 18, United States Code, Sections 1344(2) and2. COUNT THREE Bank Fraud - 510 N. Adams 18 U.S.C. $$ 1344(2) and 2 I. 1. Paragraphs 1 Introduction through 14,24, and 27 thlough 28 ofCount One are realleged and incorporated by reference as if fully set forth herein. II. 2. The Charge Between in or about March 2012 and on or about December 14,2012, in the Northern District of Florida, and elsewhere, the defendants, SCOTT CHARLES MADDOX 36 and JANICE PAIGE CARTER-SMITH, did knowingly execute and attempt to execute a scheme to obtain money, funds, credits, assets, and other property owned by, and under the custody and control of, BB&T, by means of materially false and fraudulent pretenses, r'epresentations, and promlses. III. 3 . The Fraudulent Scheme The fraudulent scheme is summarized in paragraphs 22 and 38 through 48 of Count One, which are realleged and incorporated by reference as if fully set forth herein. lV, 4. Execution of the Scheme Between in or about August 2012 ard on or about December 14, 2012, for the pu{pose ofexecuting and attempting to execute scheme, the defendants, thii fiaudulent MADDOX and CARTER-SMITH, did knowingly submit and cause to be submitted to BB&T false documents, including a Personal Financial Statement, Affidavit, a Full and Final Settlement Agreement, an Arms-Length a Joinder and Consent, and an Affidavit of Company Status to obtain, in suppolt of, and in the closing of, the short sale of 510 N. Adams. In violation of Title 18, United States Code, Sections 1344(2) and2. COUNT FOUR False Statements to a Financial Institution 5l - 208 W. Carolina 18 U.S.C. $ 1014 1. Paragraphs I through 14,22,24,and27through37 ofCount One are realleged and incorporated by reference as if fully set forth herein. 2. On or about August 22,2011,, in the Northern District of Florida and elsewhere, the defendant, SCOTT CHARLESMADDOX, did knowingly make a false statement and report for the purpose of influencing the action ofBB&T, upon an application, purchase, and loan; namely, the defendant knowingly submitted a Full and Final Settlement Agreement falsely stating that Gov. Services was an "unrelated party" to SCM when, in fact, the pafiies were related in that MADDOX contlolled both entities and had in fact himself obtained a large portion of the money paid by Gov. Services fol the shorl sale. In violation of Title 18, United States Code, Section 1014. COUNT FTYE False Statements to a Financial lnstitution - 510 N. Adams 18 U.S.C. $ 1014 1. Paragraphs 1 through 14,22,24,27 through 28,and 38 through 48 of Count One are realleged and incorporated by reference as if fully set fofih herein. 2. On or about December 14,2012, in the Northem District of Florida and elsewhere, the defendant, SCOTT CHARLES MADDOX, 38 did knowingly make a false staternent and report for the purpose of influencing the action ofBB&T, upon an application, purchase, and loan; namely, the defendant knowingly submitted a Full and Final Settlement Agreement falsely stating that he was the president of Govemance when in fact, as MADDOX well knew, CARTER-SMITH was the president of Governance. In violation of Title 18, United States Code, Section 1014. COUNT SD( False Statements to a Financial lnstitution 18 U.S.C. S 1014 i. - 510 N. Adams Paragraphs 1 through 14,22,24,27 through 28, and 38 through 48 of Count One are realleged and incorporated by reference as if fully set forth herein. 2. On or about December 14,2012, in the Northem District of Florida and elsewhere, the defendant, SCOTT CHARLES MADDOX, did knowingly make a false statement and report for the purpose of influencing the action of BB&T, upon an application, purchase, or loan; namely, the defendant knowingly submitted a Joinder and Consent, in which MADDOX falsely represented that he was the president of Governance, when in fact CARTER- SMITH was the president of Govemance. In violation of Title 18, United States Code, Section 1014. COTINT SEVBN 39 False Statements to a Financial Institution 18 U.S.C. S 1014 l. Paragraphs - 510 N. Adams I through 14,22,24,27 through 28, and 38 through 48 of Count One are realleged and incorporated by reference as if fully set forth helein. 2. On or about Decembbr 14,2012,, in the Nofihern District of Florida and elsewhere, the defendant, SCOTT CHARLES MADDOX, did knowingly make a false statement and report for the purpose of influencing the action ofBB&T, upon an application, purchase, or loan; namely, the defendant knowingly submitted a Full and Final Settlement Agreement falsely stating that he currently owned 510 N. Adams, when in fact MADDOX had no legal ownership of that property at the time. In violation of Title 18, United States Code, Section 1014. COUNT EIGHT Extortion Using Fear of Economic Harm 18 U.S.C. $$ 1951 and 2 1. Paragraphs I through Company A 14, 21 through 26, an'd 49 through 58 ofCount One are realleged and incorporated by reference as if 2. - fully set forth helein. Between in ol about May 2012 and on or about October 27,2015,in the Northem Distlict of Florida, and elsewhere, the defendants, SCOTT CIIARLES MADDOX and 40 JANICI, PAIGE CARTER-SMITH, did knowingly obstruct, delay, and affect commerce and the movement of articles and commodities in commerce, and did attempt to obstruct, delay, and affect commerce and the movement of articles and commodities in commerce by extortion, as those terms are defined in Title 1 8, United States Code, Section 195 1; that is, the defendants obtained the property of Company A with Company A's consent induced by the wrongful use of fear of economic loss. In violation of Title 18, United States Code, Sections COUNTNINE Extortion Under Color of Official Right 18 U.S.C. $$ 1951 and 2 1. Paragraphs 1 - l95l and 2. Company B tlu'ough 14, 21 thlough 26,and59thlough69 ofCount One are realleged and incorporated by reference as if fully set forth herein. 2. Between on or about March 2, 2015, and in or about October 2015, in the Northerrr District of Florida, and elsewhere, the defendants, SCOTT CIIARLES MADDOX and JANICE PAIGE CARTER-SMITH, did knowingly obstruct, delay, and affect commerce and the movement of articles and commodities in commerce, and did attempt to obstruct, delay, and affect commerce and the movement of articles and commodities in commerce, by extortion, as those terms are defined in Title 1 8, United States Code, Section 195 41. 1; that is, the defendants obtained ploperty not due MADDOX or his office as a City Commissioner, from Company B, with Company B's consent, under color of official right. In violation of Title 18, United States Code, Sections 1951 and2. COUNT TEN Extortion Under Color of Official Right 18 U.S.C. $$ 1951 and 2 1. Paragraphs 1 Company C through 14, 21 through 26,wtd 70 through 77 ofCount One are realleged and incoryorated by reference as 2. - if fully set forth herein. Between in or about November 2012 md in or about April 2017, in the Northern District of Florida, and elsewhere, the defendants, SCOTT CHARLES MADDOX and JANICE PAIGE CARTER-SMITH, did knowingly obstruct, delay, and affect commerce and the movement of articles and commodities in commerce, and did attempt to obstruct, delay, and affect commerce and the movement of articles and commodities in commerce, by extortion, as those terms are defined in Title 18, United States Code, Section 195 1 ; that is, the defendants obtained property not due MADDOX or his office as a City Commissioner, from Company C, with Company C's consent, under color official right. In violation of Title 18, United States Code, Sections 1951 and 2. 42 of COUNT ELEVEN Extortion Under Color of Official Right 18 U.S.C. $$ 1951 and 2 1. - Company D Palagraphs I through 14,21 through 26,and 78 thlough 86 ofCount One are realleged and incorporated by reference as if fully set forth herein. 2. Between in or about November 2012 and in or about October 2017, in the Northem District of Florida, and elsewhere, the defendants, SCOTT CHARLES MADDOX and JANICE PAIGE CARTER-SMITH, did knowingly obstn:ct, delay, and affect commerce and the movement of articles and commodities in commerce, and did attempt to obstruct, delay, and affect commerce and the movement of articles and commodities in commerce, by extortion, as those terms are defined in Title 1 8, United States Code, Section 195 1 ; that is, the defendants obtained property not due MADDOX or his office as a City Commissioner, from Company D, with Company D's consent, under color official right. In violation of Title 18, United States Code, Sections 43 l95l and 2. of COUNT TWELVE Extortion Under Color of Official Right 18 U.S.C. $$ 1951 and 2 1. Paragraphs - Company E I through 14, 21 through 26,and87through94 ofCount One ale realleged and incorporated by reference as if fully set forth herein. 2. Between in or about November 2012 and in or about October 2017, in the Northem District of Fiorida, and elsewhere, the defendants, SCOTT CHARLES MADDOX and JANICE PAIGE CARTER-SMITH, did knowingly obstruct, delay, and affect commerce and the movement of articles and commodities in commerce, and did attempt to obstruct, de1ay, and affect coflrmerce and the movement of articles and commodities in commerce, by extortion, as those terms are defined in Title 18, United States Code, Section 195 1 ; that is, the defendants obtained property not due MADDOX or his office as a City Commissioner, from Company E, with Company E's consent, under color of official right. In violation of Title 18, United States Code, Sections l95l and,2. COUNT THIRTEEN Extortion Under Color of Official Right- Person E 18 U.S.C. $$ 1951 and 2 1. Paragraphs 1 through 14, 21 through 26,and 95 thlough 100 ofCount One are realleged and incorporated by reference as if fully set forth herein. 44 2. In or about February 2014, in the Northern District of Florida, and elsewhere, the defendant, SCOTT CHARLES MADDOX, did knowingly obstruct, delay, and affect commerce and the movement of afiicles and commodities in commerce, and did attempt to obstruct, delay, and affect commerce and the movement of articles and commodities in commerce, by extortion, as those terms are defined in Title 1 8, United States Code, Section 195 that is, MADDOX attempted to obtain property not due MADDOX or his office a 1; as City Commissioner, from Person E and Person E's client, with Person E's consent, under color of official right. In violation ofTitle 18, United States Code, Sections 1951 and 2. COUNTFOURTEEN Extortion Under Color of Official Right - Company F 18 U.S.C. $$ 1951 and 2 1. Paragraphs 1 through 14, 21 ttu'ough 26,and 101 through 116 of Count One are realleged and incorporated by reference as if fully set forlh herein. 2. Between in or about October 2016 and in or about February 2017 , in the Northern District of Florida, and elsewhere, the defendants, SCOTT CHARLES MADDOX and JANICE PAIGE CARTER-SMITH, 45 did krowingly obstruct, delay, and affect commerce and the movement of arlicles and cornmodities in commerce, and did attempt to obstruct, delay, and affect commerce and the movement of articles and commodities in commerce, by extortion, as those tems are defined in Title 18, United States Code, Section 1951; that is, the defendants attempted to obtain and did obtain property not due MADDOX or his office as a Cify Commissioner, from Company F, consent of Company F's representatives, under color with the ofofficial right. In violation of Title 18, United States Code, Sections 1951 and 2. COUNTS FIFTEE,N THROUGH TWENTY-TWO Honest Services Wire Fraud - Companies B, C, D, E, and F 18 U.S.C. SS 1343, 1346, and 2 I. 1. Paragraphs Introduction I through 14 of Count One are realleged and incorporated by reference as if fully set forth herein. II. 2. The Charge Between in or about November 2012 md in or about October 2017 , in the Northem District of Florida, and elsewhere, the defendants, SCOTT CHARLES MADDOX and JANICE PAIGE CARTER-SMITH, 46 did knowingly and willfully devise and intend to devise a scheme to defi'aud and deprive the City ofTallahassee and its citizens of their right to the honest services of MADDOX, a Tallahassee City Commissioner, tll'ough blibery. IfI. 3. The Fraudulent Scheme The fraudulent scheme is summarized in paragraphs 2I tlrottgh26,59 through 94, and 101 through 1 16 of Count One, which are realleged and incorporated by reference as if fully set forth herein. IV. Wire 4. Communications On or about the following dates, in the Northem District of Florida, and elsewhere, the defendants, SCOTT CIIARLESMADDOX and JANICE PAIGE CARTER-SMITH, for the purpose of executing the fraudulent scheme, caused wire communications to be transmitted in interstate commerce as set forth below. COT]NT DATE WIRE TRANSMISSION FIFTEEN January 74,2014 E-mail from MADDOX to CARTER-SMITH and representatives of Company C E-mail flom MADDOX to representative of Company C and SIXTEEN February 10,2014 SEVENTEEN December 19,2014 CARTER-SMITH 47 E-mail from representative of Company A to MADDOX re: Company E February 26,2015 E-mail from Person D to NINETEEN March 17,2015 CARTER.SMITII E-mail from CARTER-SMITH to TWENTY June 9,2015 EIGHTEEN Person A E-mail from Company B representative to CARTER- SMITH TWENTY-ONE E-mail fiom Person D to March 13,2017 MADDOX and CARTER-SMITH TWENTY-TWO May 22,2017 E-mail from Person D to CARTER-SMITH and MADDOX In violation of Title 18, United States Code, Sections 1343,7346,and2. COUNTS TWENTY-THREE THROUGH TWENTY-SIX Honest Services Mail Fraud - Company F 18 U.S.C. S$ 1341, !346, and2 I. 1 . Introduction Paragraphs 1 through 14 of Count One are realleged and incorporated by reference as if fully set forth herein. II. 2. The Charge Between in or about July 2016 and in or about July 2017, in the Northem District of Florida, and elsewhere, the defendants, SCOTT CHARLES MADDOX and JANICE PAIGE CARTER-SMITH, did knowingly and willfully devise and intend to devise a scheme to defraud and deprive the City of Tallahassee and its citizens of their right to the honest selices of MADDOX, a Tallahassee City Cornmissioner', through blibery 48 III. 3. The Fraudulent Scheme The fraudulent scheme is surnmarized in paragraphs 21 thlough 26, and 101 through 1 16 of Count One, which are realleged and incorporated by reference as if fully set forth herein. IV. Mailings 4. On or about the following dates, in the Northem District of Florida, and elsewhere, the defendants, SCOTT CHARLES MADDOX and JANICE PAIGE CARTER-SMITH, for the purpose ofexecuting the fraudulent scheme and attempting to do so, caused to be transmitted by United States mail and private and commercial canier the following matter: COLINT DATE MAILING TWENTY-THREE November 16,2016 $10,000 check sent through U.S. Postal Service. $10,000 check sent through United Parcel Service. $10,000 check sent through U.S. Postal Service. $10,000 check sent thlough United Parcel Seryice. .IWENTY.FOUR December 18,2016 TWENTY-FIVE January 23,2017 TWENTY-SIX February 22,2017 In violation of Title 1 8, United States Code, Sections 49 l34l, the the the the 1346, and 2. COUNTS TWENTY-SEVEN THROUGH THIRTY-FIVE 18 U.S.C. $$ 1952(a)(3) and 2 Travel Act 1. Counts I ttu'ough 14, 21 tlu'ough 26, and 59 through 94 are realleged and incorporated as 2. if fuliy set forth herein On or about the dates set forth below, in the Northem District of Florida and elsewhere, the defendants, SCOTT CHARLES MADDOX and JANICE PAIGE CARTER-SMITH, knowingly and willfully did use, and cause to be used, a facility in interstate and foreign commerce with the intent to promote, manage, establish, catry on, and facilitate the promotion, management, establishment, and carrying on of an unlawful activity, namely bribery, contrary to Florida Statute Section 83 8,015, and thereafter performed and attempted to perform an act to promote, manage, establish, and carry on, and to facilitate the promotion, management, establishment, and carrying on of such unlawful activity. COUNT TWENTY-SEVEN FACILITY DATE January 14,2014 Intemet DESCRIPTION E-mail from MADDOXto CARTER-SMITH and representatives Company C TWENTY-EIGHT February 10,2014 Intel.net E-mail fi'om MADDOXto 50 of representative of Company C and CARTER.SMITH TWENTY-NINE March 25, 2015 Cell Phone Text message from CARTER-SMITH to THIRTY July 8, 2015 Cell Phone Person A Text message from CARTER-SMITHto Person A THIRTY.ONE October 16,2015 Cell Phone THIRry.TWO March 4, 2016 Cell Phone THIRTY-THREE December 14,2016 Cell Phone Text message from MADDOX to Person D Text message from MADDOX to Person D Text message from MADDOX to Person C THIRTY-FOIIR January 25,2017 THTRTY-FTVF, March 13,3017 Cell Phone Text message from MADDOX to Person D Intemet E-mail from MADDOX to Person D In violation of Title 18, United States Code, Sections 1952(a)(3) and2. COUNT THIRTY-SIX False Statements 18 U.S.C. $ r00l (a)(2) On or about May 24,2017, in the Northern District of Florida and elsewhere, the defendant, SCOTT CHARLtrS MADDOX, 51 did knowingly and willfully make materially false, fictitious, and fraudulent statements and representations in a matter within the executive branch of the Govemment of the United States, that is, the defendant falsely stated that: MADDOX had no connection to Govemance; b. the individuals associated with Company F never attempted to pay MADDOX any money; c Cornpany F representatives did not give MADDOX any gifts; d. MADDOX had not known about how Company F found and CARTER-SMITH until May 24,2017. These statements and representations were false because, as MADDOX then well knew: a MADDOX controlled Governance's finances, operations, and client relationships; b. the individuals associated with Company F did attempt to pay MADDOX; c the individuals associated with Company F paid for MADDOX's flight to Las Vegas, and his hotel stay and meals in Las Vegas; and 52 d. MADDOX himself instructed Cornpany F to hire Governance. In violation of Title 18, United States Code, Section 100f(a)(2). COUNT THIRTY-SEVEN False Statements 18 U.S.C. $ 1001(a)(2) On or about May 24,2017, in the Northern District of Florida, the defendant, JANICE PAIGE CARTER-SMITH, did knowingly and willfully make a materially false, fictitious, and fraudulent statement and representation in a matter within the executive branch of the Govemment of the United States, that is, the defendant falsely stated that she was the only person associated with Govemance. This statement and representation was false because, as CARTER-SMITH then well knew, MADDOX was involved in and exerted control over Govemance's finances, operations, and client relationships. In violation ofTitle 18, United States Code, Section 1001(aX2). COUNT THIRTY-EIGHT Conspiracy to Defraud the United States r8 u.s.c. s 371 I. 1. Paragraphs Introduction I thlough 14,21 through 27,29,and 38 ofCount One this Indictment are realleged and incorpolated as though fully set forth herein. 53 of 2. At all times relevant to this Indictment, the Internal Revenue Service C'IRS") was an agency of the United States Department of Treasury responsible for administering the intemal revenue laws of the United States. II. 3. Between in or about 201 The Charge I and on or aboutAugust2l, 2017,inthe Northern District of Florida and elsewhere, the defendants, SCOTT CHARLES MADDOX and JANICE PAIGE CARTER-SMITH, did knowingly and willfully conspire, combine, confederate, and agree together and with other persons to defraud the United States for the purpose of impeding, impairing, obstructing, and defeating the lawful Government functions of the Intemal Revenue Service of the Treasury Department in the ascertainment, computation, assessment, and collection of the revenue: to wit, income taxes. II[. Manner and Means The manner and means by which the conspiracy was carried out included the following, among others: 4. MADDOX and CARTER-SMITH, using deceit and dishonest means, presented false books and records to an accountant for use in preparing the corporate income tax retums of Govemance and Gov. Services for the calendar years 2012 through 2016. 54 5. MADDOX and CARTER-SMITH secretlv sold Govelnance fi'om MADDOX to CARTER-SMITH and failed to advise bookkeepers and accountants of the sale of Govemance lesulting in false documents and records being maintained for Govemance and Gov. Services so as to conceal from the Internal Revenue Service CARTER-SMITH's ownership and interest in Govemance. 6. MADDOX and CARTER-SMITH failed to disclose to their accountants the existence of a $475,000 interest-only promissory note payable to MADDOX by CARTER-SMITH, resulting in defendant MADDOX failing to report to the IRS interest income totaling approximately $108,418 on MADDOX's 2011 through 2016 tax retums. 7. MADDOX provided his accountants with false Arms-Length Affidavits in connection with two short-sale property transactions between the defendants occurring in 2011 and 20\2. The false affidavits caused the accountants to classifi the transactions as third party sales and report false losses of $307,539 and $267 ,520 on MADDOX's 201 1 and 2012 tax returns, respectively 8. MADDOX can'ied these claimed false losses described in the preceding palagraph as net operating losses, which MADDOX can'ied forward on his 2013 through 2016 tax retums 55 9. MADDOX provided his accountants with a summary of expenses associated with his Schedule C business, Maddox Law Firm. The summary falsely included $12,000 of rent expense paid by MADDOX to CARTER-SMITH for 5 10 N. Adams, MADDOX's personal residence. This schedule caused the accountants to falsely report the personal expense on MADDOX's 2013 Schedule C IV. Overt Acts In furtherance ofthe conspiracy, and to effect the objects thereof, the following overt acts, among others, were committed in the Northem District of Florida, and elsewhere: 10. On or about March 12, 2010, MADDOX signed a contract selling Govemance to CARTER-SMITH. In or about April 2010, CARTER-SMITH became the president and registered agent of Govemance. 1 1. On or about August22,201 1, SCM Investments, LLC and MADDOX sold 208 W. Carolina to Governance Services LLC via a shoft sale. This transaction was not a valid shoft sale because MADDOX and CARTER- SMITH were not "unrelated parlies." MADDOX obtained most of the funding for CARTER-SMITH to pulchase the property from MADDOX's family members. 56 a Govemance client and 12. On or about August 9, 2012, MADDOX filed a 2011 tax retum that falsely claimed a business property loss of $307,539 due to the short sale of 208 W. Carolina, and falsely reported income eamed by Govemance on Schedule E of his Form 1040. 1 filed, 3. a 2011 On or about September 14,, 2012, MADDOX filed, or caused to be Fonn 1 1205 for Govemance, which he falsely signed as president and sole shareholder of the company. 14. On or about October 1,2012, CARTER-SMITH filed, or caused to be filed, a false 201 1 Form 1 040. 15. On or about December 14,2012, MAL sold 510 N. Adams to Gov. Services via a short sale, which was not a valid short sale because CARTER- SMITH was the owner of both MAL 16. and Gov. Services. On or about July 1,2013, MADDOX filed, or caused to be filed, a false 2012 Form I 120S for Govemance Inc., which he falsely signed as president and sole shareholder ofthe company, 17. On or about Iuly 2,2013, MADDOX hled, or caused to be filed, a false 2012 Form 1040 that falsely claimed business propefty toss of $267,520 and falsely reported income eamed by Govemance on Schedule E. 57 1 8. On or about October 16,2013, CARTER-SMITH filed, or caused to be filed, afalse2012 Form 1040. The Form 1040 was false in that it failed to repot pass through income earned from Govemance on Schedule E. 19. Between on or about September 29,2014, and on or about August 21, 2017, MADDOX filed, or caused to be filed, false Form 1040s for tax years 2013 through 2016 that falsely reported net operating losses ranging from $126,000 to $273,00 0 fr om fraudulent property short-sales. 20. On or about July 9,2014, during a swom interview by a Florida Commission on Ethics investigator, CARTER-SMITH lied about the financial status of Govemance when she purchased the company, falsely stating, "it had incurred some losses the years before." 21. Between 2015 and 2017, MADDOX used Governance credit calds in the names of other individuals but did not declare this income received from Govemance on his Forms 1040 filed with the IRS during this time. 22. Between 2011 and 2014, MADDOX lied to his bookkeeper regarding the timing and sale of Governance. All in violation of Title 18, United States Code, Section 371. 58 COUNT THIRTY-NINE Making False Statements on a Tax Return 26 U.S.C. S 7206(1) On or about lttly 2,2013, in the Northern District of Florida and elsewhere, the defendant, SCOTT CHARLES MADDOX, a resident of Tallahassee, Florida, did willfully make and subscribe a United States Individual Income Tax Return, Form 1040, for the calendar year 2012, which contained and was verified by a written declaration that it was made under the penalties of perjury, and which the defendant did not believe to be true and correct as to every material matter. That return, which was filed with the Intemal Revenue Service, was false in that the retum represented a loss on line 14 of $267 ,520 from the sale of property owned by Govemance, falsely listed $92,609 of Govemance income on Schedule E line 28c, falsely listed $3,372 of Govemance rental income on Schedule E line 28d, and failed to list on line 8a interest income of $23,976, when, in truth and fact and as the defendant then well knew, he had sold Govemance to CARTER-SMITH more than three years earlier, had no legal interest in Govemance, could not deduct any losses from Govemance, and he could not repoft Governance's income on his Form 1040 because he had no legal interest in the business. The Folm 1040 filed by MADDOX was also false in that 59 he failed to report 523,976 in interest income that he had received from CARTER- SMITH during the 2012 tax year. In violation ofTitle 26, United States Code, Section 7206(l). COUNT FORTY Making False Statements on a Tax Return 26 U.S.C. $ 7206(1) On or about September 29,2014, in the Northern District of Florida and elsewhere, the defendant, SCOTT CIIARLES MADDOX, a resident of Tallahassee, Florida, did wil1ful1y make and subscribe a United States Individual Income Tax Retum, Form 1040, for the calendar year 2013, which contained and was velified by a wlitten declaration that it was made under the penalties of perjury, and which the defendant did not believe to be true and correct as to every material matter. That retum, which was filed with the Intemal Revenue Service, was false in that the retum represented a net operating loss on line 21 of $273,761, failed to list on line 8a interest income of $i7,950, and falsely listed on line 20b on Schedule C $12,000 ofpersonal rent (which reduced Business Income the same on line 12), when in truth and fact and as the defendant then well knew he had sold Governance to CARTER-SMITH rrote than three yeals earlier, had no legal interest in Governance, could not deduct any losses from Governance, and he was not entitled to a net operating loss from Governance because he had no 60 legal interest in the business. The Form 1040 filed by MADDOX was also false rn that the defendant failed to report $ 17,950 in interest income that he had received fi'om CARTER-SMITH during the 2013 tax year, and the defendant was not entitled to deduct personal rent expense on his retum. In violation of Title 26, United States Code, Section 7206(1). COUNT FORTY-ONE Making False Statements on a Tax Return 26 U.S.C. $ 7206(1) On or about October 19,2015, in the Northern District of Florida and elsewhere, the defendant, SCOTT CHARLES MADDOX, a resident of Tallahassee, Florida, did willfully make and subscribe a United States Individual Income Tax Return, Form 1040, for the calendal year 2014, which contained and was verified by a written declaration that it was made under the penalties of perjury, and which the defendant did not believe to be true and conect as to every material matter. That refum, which was filed with the Intemal Revenue Service, was false in that the return represented a net operating loss on line 21 of $252,733 and failed to list on line 8a interest income of $17 ,097 , when in truth and fact and as the defendant then well knew, he had sold Governance to CARTER- SMITH more than four years earlier, had no legal interest in Govemance, could not deduct any losses from Govemance because he had no interest in the business, 6I and he was not entitled to a net operating loss. The Form 1040 filed by MADDOX was also false in that he failed to report $17 ,097 in interest income that he had received from CARTER-SMITH during the 2014 taxyear. In violation ofTitle 26, United States Code, Section 7206(1). COUNT FORTY-TWO Making False Statements on a Tax Return 26 U.S.C. $ 7206(r) On or about October 20, 2016,in the Northern District of Florida and elsewhere, the defendant, SCOTT CIIARLES MADDOX, a resident of Tallahassee, Florida, did willfully rnake and subscribe a United States Individual Income Tax Retum, Form 1040, forthe calendar year 2015, which contained and was verified by a written declaration that it was made undel the penalties of perjury, and which the defendant did not believe to be true and correct as to evely material matter. That retum, which was filed with the Intemal Revenue Service, was false in that the retum included in line 21 a net operating loss of $197,184 and failed to list in line 8a interest income of $13,485, when in truth and fact and as the defendant then well knew, he had sold Govemance to CARTER- SMITII more than five years earlier, had no legal interest in Governance, could not deduct any losses from Governance because he had no legal inter.est in the business, and he was not entitled to a net operating loss. The Form 1040 hled by 62 MADDOX was also false in that he failed to report $i3,485 in interest incorne that he received had from CARTER-SMITH during the 2015 tax year. In violation of Title 26, United States Code, Section 7206(l). COUNT FORTY.THRf,E Making False Statements on a Tax Return 26 U.S.C. $ 7206(1) On or about August 21,2017, in the Northem Dishict of Florida and elsewhere, the defendant, SCOTT CHARLES MADDOX, a resldent of Tallahassee, Florida, did willfully make and subscribe a United States Individual Income Tax Return, Fonn 1040, for the calendar year 2016, which contained and was verified by a wriffen declaration that it was made under the penalties of perjury, and which the defendant did not believe to be true and corect as to every material matter. That retum, which was filed with the Intemal Revenue Sewice, was false in that the return represented a net operating loss on line 21 of $126,805 and failed to list on line 8a interest income of $12,749, when, in truth and fact and as the defendant then well knew, he had sold Governance to CARTER- SMITH more than six years earlier, had no legal interest in Governance, could not deduct any losses from Governance, and he was not entitled to a net operating loss. The Form 1040 filed by MADDOX was also false in that he failed to repolt 63 512,749 in interest income that he had received from CARTER-SMITH during the 2016 tax year. In violation ofTitle 26, United States Code, Section 7206(I). COUNT FORTY-FOUR Making False Statements on a Tax Return 26 U.S.C. S 7206(1) On or about October 16,2013, in the Northem District of Florida and elsewhere, the defendant, JANICE PAIGE CARTER-SMITH, a resident of Tallahassee, Florida, did willfully make and subscribe a United States Individual Income Tax Return, Fonn 1040, for the calendar year 2012, which contained and was verified by a written declaration that it was made under the penalties of perjury, and which the defendant did not believe to be true and correct as to every material matter. That retum, which was filed with the Intemal Revenue Serwice, was false in that the retum falsely represented total Schedule E income on line 17 of only $53,398 from The Big Productions, lnc., and omitted approximately $95,981 in income from Govemance. In violation ofTitle 26, United States Code, Section 7206(l). CRIMINAL FORFEITURE The allegations contained in Counts One through Thirty-Five of this Indictment are hereby realleged and incorporated by reference for the purpose of 64 alleging forfeiture. From their engagement in the violations alleged in Counts One thlough Thirry-Five of this Indictment, the defendants, SCOTT CIIARLES MADDOX and JANICE PAIGE CARTER-SMITH, shall forfeit to the United States, pursuant to Title 18, United States Code, Sections 981(a)(l)(C), 982(a)(2), and 1963(a)(3), and Title 28, United States Code, Section 2461(c), any and all ofthe defendants' right, title, and interest in any property, real and personal, constituting, and derived fi'om, proceeds traceable to such offenses and pursuant to Title 18, United States Code, Section 1963(a)(1), any interest the defendants have acquired and maintained, in violation of Section 1962. Ifany ofthe property described above as being subject to forfeiture, as a result of acts or omissions of the defendants: a cannot be located upon the exercise ofdue diligence; b. has been transfemed, sold to, or deposited with a third party; has been placed beyond the jurisdiction of this Court; d. has been substantially diminished in value; or e. has been commingled with other property that cannot be subdivided without diffi culty, 65 it is the intent of the United States, pursuant io Title 21, United States Code, Section 853(p), as incorporated by Title 18, United States Code, Sections 982 and 1963, and Title 28, United States Code, Section 2a61@), to seek forfeiture of any other property of said defendants up to the value of the forfeitable property. A TRUE BILL: FORE eli /t8 DATE RHEW.MILL Attorney for the United States Acting Under Authority Conferred by 28 U.S.C. $ 515 SYr- ,uffi Assistant United States Attomey ANNALOUTIROL Acting Chief, Public Integrity Section Criminal Division U.S. Department of Justice xlp* SIMffiIATALDo Trial Attomey U.S. t of Justice M. NOTHSTEIN Trial Attorney U.S. Departrnent of Justice 66