Case Document 1 Filed 02/13/20 Page 1 of 28 SEALED UNITED STATES DISTRICT COURT DISTRICT OF MASSACHUSETTS Criminal NOOZU Violations: UNITED STATES OF AMERICA V. Counts One Ten: Wire Fraud DAVID M. NANGLE, (18 1343) Defendant Counts Eleven - Fourteen: Bank Fraud (18 U.S.C. 1344) Counts Fifteen Twentv?Three: Making False Statements to a Bank (18 U.S.C. 1014) Counts Twentv-Four - Twenty-Eight: Filing False Tax Returns (26 U.S.C. 7206(1)) Wire Fraud Forfeiture Allegation: (18 U.S.C. 981(a)(1)(C) and 28 U.S.C. 2461) Bank Fraud Forfeiture Allegation: (18 U.S.C. WI At all times relevant to this Indictment: General Allegations 1. The defendant, David M. NANGLE was a resident of Lowell, Massachusetts. From 1999 through the present, NANGLE served as an elected member of the Massachusetts House of Representatives, representing the 17th Middlesex District, which included Lowell and part of Chelmsford. Case Document 1 Filed 02/13/20 Page 2 of 28 a. NANGLE earned a base salary of approximately $60,000 to $62,500 as a State Representative from 2014 to 2018. During this period, NANGLE received thousands of dollars in additional compensation that served as reimbursement for of?ce expenses, miles, meals, and lodging. Furthermore, NANGLE received an additional $30,000 in yearly compensation for his House leadership positions in each of 2017 and 2018 (as Second Division Chair, a member of the House Speaker?s leadership. team), and an additional approximately $7,500 in yearly compensation for his Chairmanship positions in each of 2015 and 2016 (Committee on Ethics, and Committee on Steering, Policy, and Scheduling, respectively). b. Despite his salary and perks, NANGLE was heavily in debt, had poor credit (with a credit score reported as low as 593), and had regular cash ?ow problems as a? result of extensive gambling at various casinos inConnecticut Casino 1? and Casino New Hampshire Casino 1? and Casino Massachusetts Casino?), and Rhode Island Casino?), among others, and placing thousands of bets on intemet gambling sites, which caused NAN GLE to incur tens of thousands of dollars in gambling-related spending and losses. c. To sustain his gambling activities and keep himself a?oat ?nancially, defendant NANGLE illicitly used campaign funds to, among other things, pay for personal expenses, (ii) defraud his bank lender, and collect income that he failed to report ?to the Internal Revenue Service. (1. NANGLE raised hundreds of thousands of dollars in campaign ?mds despite running for re-election unOpposed since January 2013, which further allowed him Case Document 1 Filed 02/13/20 Page 3 of 28 to use campaign funds to supplement his personal ?nances instead of using the funds for permissible campaign purposes. 2. The Massachusetts Office of Campaign and Political Finance was the independent state agency that administers Massachusetts campaign ?nance law pursuant to Massachusetts General Laws, chapter 55 and. Title 970 of the Code of Massachusetts Regulations . ch. 55? and 970,? together, the Rules?). OCPF was the depository for campaign ?nance reports ?led by candidates and mandated by MGL, ch. 55. OCPF was charged with reviewing such reports to help ensure accurate disclosure and legal compliance, publishing such reports on its website, and, in certain instances, conducting legal reviews of campaign ?nance activity. 3. The Committee to Elect David Nangle (?Nangle Committee?) was the political committee . that NANGLE formed and maintained to receive campaign contributions and make campaign. expenditures. To receive ?mdsand make expenditures, NANGLE opened a Nangle Committee bank account at a bank whose headquarters were in Rhode Island (the ?Rl Bank?). NAN GLE appointed a treasurer (the ?Treasurer?) to timely ?le campaign ?nance reports and keep detailed records of all Nangle Committee campaign ?nance activity. NANGLE, however, maintained ultimate authority over all Nangle Committee expenditures, including sole possession, control, and use of any and all Nangle Committee bank debit cards. Pursuant to OCPF Rules: a. NANGLE was prohibited from making any Nangle Committee expenditures that were primarily for NAN or any other person?s persOnal use; b. NANGLE was required to truthfully and accurately disclose the purpose of each Nangle Committee expenditure; Case Document 1 Filed 02/13/20 Page 4 of 28 c. NANGLE was required to keep detailed records (bills, receipts) of all Nangle Committee expenditures, and any expenditure not supported by bills, receipts, or other documentation re?ecting the purpose of the expenditure created a presumption that the expenditure was made for the personal use of NAN GLE or another person; and d. NANGLE was required to electronically ?le his Nangle Committee campaign ?nance reports with OCPF under penaltyof perjury with an electronic signature attributable to NAN GLE. 4. The Lowell Bank (?Lowell Bank?) Was a ?nancial institution based in the Lowell area, which provided personal and business banking services, and whose deposits were federally insured by the Federal Deposit Insurance Corporation. The Lewell Bank issued home mortgage loans and home equity lines of credit as part of its personal banking business. Borrowers applying for Lowell Bank mortgages and HELOCs were required to truthfully and accurately disclose all debts, sources of income, sources of funds for down payments, purposes of HELOC loan proceeds, among other representations, as part of the loan application process. These disclosures and representations were material to the Lowell Bank?s decision-making process. 5. Other individuals and entities: a. NANGLE was a member of a golf club in Lowell, MA (the ?Lowell Golf Club?), which required members to pay yearly dues, membership fees, and other charges to maintain their personal membership and playing privileges. b. NAN relative (the ?Dracut owner?) owned a restaurant and catering business in Dracut, MA (the ?Dracut Restaurant?). Beginning atqleast as early as 2011, NANGLE borrowed a total of approximately one hundred thousand dollars 4 Case 1'20-cr-1003 nt 1 Filed 02/13/20 Page 5 of 28 from the Dracut Owner over the course of several years?. As of late 2018, NANGLE owed the Dracut Owner approximately $87,000. c. friend (the ?Salisbury Owner?) owned a restaurant in Salisbury, MA (the ?Salisbury Restaurant?). From at least asearly as 2015, NANGLE borrowed thousands of dollars from the Salisbury Owner. As of September 2018, NANGLE had repaid his debt of at least approximately $10,000 to the Salisbury Owner. (1. An individual (the ?Lowell Owner?) owned a restaurant in Lowell, MA (the ?Lowell Restaurant?). From 2014 to 2015, NANGLE borrowed at least over a thousand dollars from the Lowell Owner, which NANGLE had repaid by approximately 2015. e. associate (the ?Billerica Owner?) owned a facilities maintenance company in Billerica, MA (the ?Billerica Company?). In December 2014 and February 2015, the Billerica Owner paid NANGLE $10,000 and $17,000, respectively, for purported real estate ?consulting? services that NANGLE provided to the Billerica Owner. NANGLE used the funds to purchase a new home in Lowell, after which, the Billerica Company painted several rooms in Lowell house for free. At the time NANGLE had received the February 2015 payment, NANGLE had provided no real estate consulting services for the Billerica Company. 7 f. contractor (the ?Contractor?) owned a contracting company in MA. In 2015, the Contractor provided goods and services of approximately $7,000 in NAN new home. NANGLE never paid for these services, and, instead, offered to ?nd the Contractor other business after .earlier 5 Case 1: - - 20 or Document 1 Filed 02/13/20 Page 6 of 28 handing the. Contractor his State Representative business card. In 2016, NANGLE asked for and received a $7,000 ?loan? from the Contractor, which NAN GLE never offered to, nor did he, repay. In 2017, NANGLE had the Contractor provide an additional approximately $1,000 of goods and services in his home. Between 2015 and 2019, NANGLE made no payments to the Contractor for the ?loan? or goods and services provided. During this time, however, the Contractor was awarded lucrative bids for construction projects for which NANGLE had secured State funding. In early 2019, NANGLE asked the Contractor to perform an additional job at his home worth several thousands of dollars. g. Another friend of NAN GLE was employed by the Corrm'ionwealth in Lowell (the ?Lowell State Employee?). NANGLE assisted the Lowell State Employee in obtaining his/her State job and other part?time work in Lowell. From 2015 to 2017, NANGLE enlisted the Lowell State Employee to assist NANGLE in completing and ?ling false federal income tax returns. Overview of the Scheme to Defraud OCPF, the Nangle Committee, and Nangle Committee Donors 6. From at least as early as 2014 and continuing through 2019, NANGLE devised a scheme to defraud OCPF, the Nangle Committee, and Nangle Committee Donors by using the Nangle Committee bank account as his own personal checking account to pay for various personal expenses and to withdraw cash, among other things. Case Document 1 Filed 02/13/20 Page 7 of 28 Manner and Means of Scheme to Defraud 7. Among the manner and means by which NAN GLE conducted and participated in the scheme to defraud were the following: a. NAN GLE solicited Nangle Committee campaign contributions on thepremise that the money would be used to enhance NAN political future. b. NANGLE, knowing that Nangle Committee ?mds were to be exclusively used to enhance his political future, instead used the funds to pay for expenses that were primarily personal. c. NANGLE used Nangle Committee funds to pay for, among other things, thousands of dollars in Lowell Golf Club dues and personal charges, rental cars to travel to casinos, ?owers for his girlfriend, gas, hotel and restaurant charges (for which NANGLE was already receiving State reimbursement), gift cards for his personal use, and to withdraw cash. (1. NAN GLE, knowing that his use of Nangle Committee funds was subject to OCPF scrutiny from past OCPF audits and reviews of his campaign ?nances in 2007, 2009, 2010, and 2016, misled his staff and his Treasurer, and concealed his theft of campaign funds by ?ling and causing to be ?led false campaign ?nance reports with OCPF that intentionally disguised the personal nature of such expenses and instead fraudulently described the purpose of such spending as political in nature. Case Document 1 Filed 02/13/20 Page 8 of 28 Scheme to Defraud 8. From at least as early as 2014, NANGLE used the Nangle Committee bank debit card to i pay for his personal dues and other personal charges at the Lowell Golf Club, and then disguised the charges by ?ling false OCPF disclosures, as follows: I I -11 6/56in Member dues, locker fees, assessments riendraiser? 11/4/2015 Member dues, locker fees, cart ?Catering? charges 7/1/2016 $654 Member dues ?Mtg w/ campaign volunteers re: electiOn? 4/26/2017 $865 Member dues, locker fees, cart ?Fundraiser Catering? charges, green fees 11/10/2018 $836 Member dues ?Campaign Volunteers Appreciation? 4/19/2019 $400 Member account payment ?Hall Rental Setup Charge and Linens for 9. From at least as early as 2014, NANGLE used the Nangle Committee bank debit card to pay a rental car company branch in Massachusetts (?Rental Car for rental car charges to travel to casinos, and then disguised the charges by ?ling misleading OCPF disclosures, which included the following: 2/3/2 16-2/6/2016? $1 19.85 2/2/2016 $2,000 Cash withdrawal ?Rental car for (333 miles, Wed-Sat) 2/4/2016 trip to NH Casino 1 travel to state 2/4/2016 $3 00 cash withdrawal at MA Casino house? 3/9/2017-3/12/2017 $165.13 3/9/2017 trip to and gambling at CT Casino 1 ?Rental car? (408 miles, Th?Sun) 3/10/2017 gambling at CT Casino 1 4/27/2017-5/4/2017 $356.52 4/29/2017 $600 cash withdrawal ?Rental car while '(566 miles, Th-Th) 4/29/2017 $500 cash withdrawal at MA Casino car being repaired? NANGLE also collected a State per diem of $104 (claiming 4 days travel to Statehouse for week ending 2/5/2016). 8 Case Document 1 Filed 02/13/20 Page 9 of 28 10. From at least as early as 2014, the State of Massachusetts paid NANGLE, as a State Representative, thousands of dollars in additional compensation as reimbursement for his State House of?ce expenses, meals, mileage, and lodging, as follows: Additional State 9155: 2 Pay to NANGLE .- . - .. Pay for of?ce $7,200 7 $7,200 $7,200 expenses $15,0002 $15,000 Per diem for miles, $4,160 $4,134 $43108 meals, and lodging 11. Despite collecting the above additional pay, NANGLE double-dipped by using Nangle Committee funds to pay for many of the same expenses, according to OCPF records, as follows (all ?gures approximate): NANGLE - Campaign . . I Spending a 3 I Travel $0 (gas) $68 (gas) $1,082 (gas) $2,530 (gas) $3,053 (gas) $184 (car) $1,132 (car) $665 (car) $300 (car) $47 (car) Restaurants $13,268 $10,025 $10,444 $9,676 $11,243 Lodging $1,857 $1,697 $1,535 $2,910 $999 12. In or about December 2017, NAN GLE embezzledNange Committee funds by causing the Nangle Committee to issue two checks to a straw vendor (?Straw Vendor?) for ostensible campaign expenses, according to OCPF ?lings. In reality, the Straw Vendor did not provide any campaign services for these payments. The Straw Vendor, who was a friend of relative, cashed the checks at relative?s direction and gave the entire cash . proceeds to NAN relative, as follows: "'15 ?"ezptgaaigegadagdag;' 12/13/2017 $1,000 Straw Vendor ?Fundraiser consulting? 2 From 2014-2016, the State Legislature paid per diem rates of approximately $26 per day for miles, meals, lodging and of?ce expenses related to legislators? work. From 2017 forward, the State Legislature ceased paying per diems and paid a lump sum of 1 5,000 to each legislator for miles, meals, lodging and of?ce expenses. 9 Case Document 1 Filed 02/13/20 Page 10 of 28 Overview of Bank Fraud Scheme 13. From at least as early as 2014, NAN GLE devised a scheme to defraud the Lowell Bank to obtain hundreds of thousands of dollars in loans using materially false and fraudulent pretenses representations, and promises. Manner and Means of Bank Fraud Scheme 14. Among the manner and means by which NANGLE defrauded the Lowell Bank were as follows: a. NANGLE submitted materially false loan applications and other documentation to the Lowell Bank to obtain thousands of dollars in bank loans. b. NANGLE intentionally misstated his income and understated his outstanding debt obligatiOns on his applications to obtain the loans on favorable terms, which placed the Lowell Bank at risk of loss with respect to each loan. c. NANGLE intentionally concealed thousands of dollars in outstanding personal debts to various restaurant owners debts that NAN GLE carried for extended periods of time by spending Nangle Committee funds at the restaurants (including for personal meals) as a means of appeasing his lenders (all ?gures approximate): . . Dracut Restaurant Dracut Owner Up to $100,000 $94,345 ?'om 2011 to (2002 to 2019) present Lowell Restaurant Lowell Owner Over $1,500 $12,592 7 in 2014 and 2015 (2005 to 2019) Salisbury Restaurant Salisbury Owner Over $1 1,000 $4,919 from 2013-2017 (2004 to 2019) d. As an elected State of?cial, NAN GLEwas required to report to the Massachusetts State Ethics Commission each debt over $1,000 for each calendar year by ?ling a .10 Case Document 1 Filed 02/13/20 Page 11 of 28 yearly Statement of Financial Interest From at least as early as 2014 to 2019, NANGLE concealed each of his above debts3 by omitting them from his yearly SFI ?lings to the State Ethics Commission. 7 e. NANGLE represented to the Lowell Bank'that' the purpose of the home equity loans was for ?home improvement,? knowing that he intended to use, and did use, signi?cant portions of the loan proceeds to fund his gambling activities and to repay his creditors. f. NANGLE concealed from the Lowell Bank the fact that he was ?nancially sustaining himself with an illegal source of income, the regular misappropriation of money from his campaign account. 15. In or about January 2015, NANGLE applied to the Lowell Bank for a home mortgage loan. The Lowell Bank home mortgage application (?Form 1003?), among other things, required NANGLE to truthfully and accurately report his income and ?nances, and to represent that he did not borrow any funds to make the down payment for the mortgage. a. To create the illusion that NAN GLE had another source of income, and (ii) did. not need to borrow any funds to make the down payment for his home mortgage, NANGLE submitted a ?Consulting Agreement? with the Billerica Company that was back-dated to August 17, 2014, and a Form 1099 that reported $10,000 in ?income? as part of his home mortgage application. 3 This list of omitted debts was not exhaustive. For example, defendant NANGLE failed to disclose on his SFI ?lings that he owed at least approximately $4,500 to a former State Representative, ?'om whom he borrowed at least $7,000 during 201 1 to 2014, and to whom he contributed hundreds of dollars of campaign donations using Nangle Committee ?nds. 11 Case Document 1 Filed 02/13/20 Page 12 of 28 b. As part of the home mortgage application, NANGLE submitted a letter to the Lowell Bank dated February 26, 2015, that falsely blamed his bad credit on his ex- wife, claiming that he had loaned her money, which she did not pay back in a timely fashion, when, in truth and fact, NANGLE had not?loaned her any money, and in themonths prior to the closing, NANGLE had spent thousands of dollars at NH Casinos 1 and 2, the RI Casino, and CT Casino 2. c. Days prior to the February 27, 2015 closing on the Lowell Bank home mortgage, NAN GLE received another $17,000 check from the Billerica Company, the entirety of which NANGLE used for the down payment to close on the purchase of the home. d. As of February 27, 2015, NANGLE had performed no services for the Billerica Company pursuant to the ?Consulting Agreement.? 16. Including the home mortgage loan described above, NANGLE fraudulently obtained a total of four loans from the Lowell Bank by making the following materially false statements and omissions on the approximate dates: 6: pjal - Home $191,250 1 Credit explanation letter 0 Falsely blames ex-wife for causing him to Mortgage (2/26/15) miss recent car loan payments; Loan Omits gambling activity as reason for ?nancial dif?culties. 2 Form 1003 (2/27/15) 0 Lists car loan as only outstanding debt; 0 Omits Dracut Owner debt and debt payments; Omits Salisbury Owner and Lowell Owner debt and debt payments; 0 Omits regular use of campaign funds for personal use as ?Other? income; 0 Falsely represents that no part of the down payment is borrowed. 141.5 P-rmcl 12 Case Document 1 Filed 02/13/20 Page Certi?cation (2/27/15) 6 Represents that have not app lied for or incurred any credit card or loan obligations that are not listed on my mortgage loan application . . . Home Equity Line of Credit (HELOC) $35,000 Form 1003 (8/21/17) 0 Writes ?Home improvement? as purpose of loan; 0 Lists home mortgage and credit card debt as only debts; Omits Dracut Owner debt and debt payments; 0 Omits regular use of campaign funds for personal use as ?Othei? income. Home Equity Consumer Loan Application (9/13/17) 0 Lists home mortgage and credit card debt as only debts; Omits Dracut Owner debt and debt payments; 0 Omits outstanding tax debt to IRS as described in paragraph 23; Omits regular use of campaign funds for personal use as ?Other? income; 0 Represents, among other things, that have no other outstanding ?nancial obligations of any kind I-IELOC - $55,000 Form 1003 (11/27/17) 0 Writes ?Home improvement? as purpose of loan; Omits Dracut Owner debt and debt payments; 0 Omits regular use of campaign funds for personal use as ?Other? income. HECLA (12/10/17) 0 Lists only debts as mortgage, credit card debts, and 2 medical debts; 0 Omits Dracut Owner debt and debt payments; 0 Omits outstanding tax debt to IRS as described in paragraph 23; Omits regular use of campaign funds for personal use as ?Other? income; Represents, among other things, that have no other outstanding financial obligations of any kind . . 13 Case Document 1 Filed 02/13/20 Page 14 of 28 I-IELOC Form 1003 (4/26/18) 0 Writes ?Home improvement? and ?Other? as purpose of loan; I 0 Omits Dracut Owner debt and debt payments; 0 Omits regular use of campaign funds for personal use as ?Other? income. 9 HECLA (6/15/18) 0 Lists only debts as mortgage, credit card debt, and existing Omits Dracut Owner debt and debt payments; 0 Omits outstanding tax debt to IRS as described in paragraph 23; Omits regular use of campaign funds for personal use as ?Other? income; - Represents, among other things, that have no other outstanding financial obligations of any kind 17. When making the false statements in the above Form 1003 and HECLA forms, defendant NANGLE was aware and certi?ed that ?any intentional or negligent misrepresentation of information contained in this application may result in civil liability and/or criminal penalties.? False Tax Returns 18. The Internal Revenue Service is an agency of the United States Department of Treasury responsible for enforcing and administering the tax laws of the United States. 19. For the tax years 2014 to 2018, NAN GLE ?led individual personal tax returns. For years 2014 and 2015 NANGLE also ?led a Schedule as part of each return, which purported to report deductions for all self-employment business income and expenses for his ?consulting? business. In tax year 2016, NANGLE performed no ?consulting? work, but still ?led a Schedule to deduct purported self-employment expenses for his work as a state legislator. 14 Case Document 1 Filed 02/13/20 Page 15 of 28 20. In addition, in each of tax years 2014 to 2018, NANGLE ?led IRS orm 2106-EZ expense forms, which purported to report all of his deductible expenses arising from his work as a state legislator. IRS Form 2106-EZ, however, permits the deduction of ordinary and necessary employee job expenses which are not reimbursed by the taxpayer?s employer. Thus, for tax year 2016, where NAN GLE claimed over $75,000 in deductions for both self-employment and employee business expenses as a state legislator, NAN GLE claimed that he had zero taxable income that year. . 21. i From in or about February 2015 to February 2017, NANGLE. enlisted the Lowell State Employee to assist NANGLE in electronically ?ling his federal income tax returns for 2014, 2015, and 2016 using the TurboTax software program, even though NANGLE knew that the Lowell State Employee had no expertise in tax or tax preparation. 22. For each return for the tax years 2014 to 2016, NANGLE provided the Lowell State Employee with ?gures and entries to enter on TurboT ax, directing the Lowell State Employee to input and in?ate various mileage amounts and expenses, and make other false entries, so that NAN GLE would receive a federal tax refund each year. In at least one instance, the LoWell State Employee refused to hit the submit button on TurboTax because he was, aware that the in?ated expenses were fraudulent. In response, NAN GLE pressed the submit button, assuring the Lowell State Employee that NANGLE would ?take the blame if anything happens.? 23. In or about 2017, NANGLE received a tax notice from the IRS advising NANGLE that the IRS had disallowed approximately $30,000 in deductions that NAN GLE claimed on his 2014 federal income tax retum, and that NAN GLE owed additional taxes and penalties of over $7,000 for that year. 15 Case Document 1 Filed 02/13/20 Page 16 of 28 24. Thereafter, NANGLE hired a professional tax preparer, located in Tewksbury, MA (the ?Tax Preparer?) to prepare and ?le his federal income tax returns for calendar years 2017 and 2018. NAN GLE, however, con?rmed to mislead the Tax Preparer and defraud the IRS for those years by in?ating different expenses charitable donations) and continuing to conceal income. Materially False and Fraudulent Expenses and Deductions 25. As detailed in paragraph 5(e) above, NANGLE collected $10,000 in December 2014 and $17,000 in February 2015 for purported ?consulting? work, without having performed any consulting services prior to receiving such payments. Furthermore, in 2016, NAN GLE performed no ?consulting? or self-employment work that would qualify for Schedule deductions. DeSpite performing little to no consulting Work, NAN GLE claimed tens-of thousands of dollars in Schedule business mileage expenses on top of claiming tens of thousands of dollars in commuting mileage expenses purportedly related to his legislative job in order to falsely reduce his reportable income and fraudulently in?ate his federal tax re?lnd. 26. As shown below, NANGLE made and subscribed to demonstrably false income tax returns, in which NANGLE claimed the following additional out-of-pocket mileage expenses and charitable donations (all ?gures approximate): Tax Year Filing i. 201,6 3 ,1 2106-EZ-Business $11,565 $10,588 $17,739 $10,206 $21,571 . mileage expense . 2106-EZ-Trave1 $13,780 $770 $420 expense or tolls 2106-EZ-Bu5iness $5,642 $4,300 $1 1,384 $5,904 $6,930 expense 2106-EZ- $1,858 $1,143 $4,175 $3,175 $2,860 Meal/entertainment expense 2106-EZ-Business, 21,220 19,790 35,000 40,585 45,985 commuting, and other miles Schedule - 48,680 53,000 47,000 business and other miles 16 Case Document 1 Filed 02/13/20 Page 17 of 28 Tax Year Filing .. Schedule Car $1 1,420 $1 1,418 $6,462 expenses Donation to . $3,780 $6,500 $4,350 Charity 1 Donation to 7 $1,275 $2,975 Charity 2 Donation other, $10,770 $1 1,350 $1,780 not speci?ed 27. As shown in the previous paragraph, NANGLE claimed to have driven over 300,000 miles during the period from 2014 to 2018, using his sole, primary vehicle, a 2008 Chevy sedan. In 2014, for example, NANGLE claimed to have driven 47,000 miles for Billerica Company ?consulting? work and ?other? purposes. Even assuming NAN GLE had begun his ?consulting? on the effective date of the agreement (August 17, 2014), NANGLE would have had to have driven approximately 345 miles per day, 7 days per week until December 31, 2014.4 28. NANGLE also claimed thousands of dollars in false deductions for alleged, charitable donations. In April 2015, for instance, NANGLE claimed to have purchased $11,000 in- ?couches, tv, tables, chairs and dinnerware? which he then claimed to have donated two months later to Charity 1, claiming a charitable deduction of $6,500. Representatives of Charity however, denied receiving any such donation and NAN ?nancial records showed no records of such purchase. Concealed Income 29. As detailed, in part, in paragraphs 6 through 12 above, NANGLE stole from the Nangle Committee campaign ?md on a yearly basis, using thousands of dollars in campaign contributions to pay his personal golf dues, rental car and other personal expenses, as well as withdraw cash via 4 From December 3, 2013 through December 20, 2017, State vehicle inspection records for defendant 2008 sedan showed a total of approximately 132,500 miles driven. For corresponding periods on his tax returns (tax years 2014 to 2017), NANGLE ?audulently claimed to have driven approximately 290,040 miles. 17. A Case Documentl Filed 02/13/20 Pagerl8 of28 the Straw Donor all of which NANGLE concealed from the IRS on his corresponding annual tax returns. 30. As detailed below, OCPF records showed that NAN GLE regularly used the Nangle Committee debit card to purchase thousands of dollars in gift cards that he fraudulently attributed to ?supplies? or gifts for his ?staff.? disclosures, however, were belied by the following: instead of ?supplies,? business records showed that NANGLE purchased VISA credit cards of up to $500 in value, (ii) the Treasurer had no docurnentation supporting such disclosures, and gift cards purportedly used for ?supplies? were used to pay for shoes, clothing, and golf fees, among other things, according to credit card records. 4/9/2014 CVS $107.00 Supplies 8/18/2014 CVS $80.95 Supplies 9/8/2014 CVS $54.95 Supplies 1 1/6/2014 CVS $259.72 Supplies 12/23/2014 CVS $330.00 Gifts for volunteers/staff 12/23/2014 CVS $504.95 Gifts for volunteers 12/24/2014 CVS $504.95 Gift Basket donations 5/29/2015 Rite Aid $104.95 Supplies 12/22/2015 Rite Aid $509.90 Staff and volunteer gifts 12/28/2016 CVS $764.85 Gift Certi?cates To Staff 1/4/2017 CVS $254.95 Supplies 2/6/2017 CVS $154.95 Supplies 3/20/2017? CVS $254.95 Supplies 7/21/2017 CVS $305.95 Supplies 9/27/2017 CVS $305.95 Supplies 12/27/2017 CVS $255.95 Gift cards for state house staff 12/27/2017 Rite Aid $627.80 Gift cards for staff Christmas 12/24/2018 Rite Aid $1,655.60 Christmas Gift Cards For Volunteers and Fundraiser Hosts 1/31/2019 Rite Aid $106.95 Supplies 3/7/2019 Rite Aid $413.90 Supplies Total $7,559.17 18 Case Document 1 Filed 02/13/20 Page 19 of 28 31., As noted in paragraph 5(1) above, NAN GLE also concealed from the IRS all of income that he received from the Contractor via checks, goods, and services, which included the approximately $7,000 in kitchen and bathroom work done by the Contractor in NAN home in 20,15, for which NAN GLE never paid; (ii) the $7,000 in check payments from the Contractor in 2016; and the approximately $1,000 in ?replace work done by the Contractor in NAN home in 2017, for which NAN GLE never paid. NANGLE also failed to report to the IRS free painting work that the Billerica Company performed in his home in or about 2015. 32. In the late evening hours of May 2, 2018 to the early morning hours of May?3, 2018, NAN GLE won a $1,221 jackpot on a slot machine at CT Casino 2. CT Casino 2 was required to report any winnings of over $1,200 to the IRS, including identifying the jackpot winner on an IRS Form W-2G. Instead of truthfully reporting such winnings, defendant NANGLE paid another individual to collect winnings so that NANGLE could evade reporting this casino income to the IRS on Form This conduct was captured on CT Casino 2 video surveillance. 19 Case Document 1 Filed 02/13/20 Page 20 of 28 COUNTS ONE - TEN Wire Fraud (18 U.S.C. 1343) The Grand Jury charges: 33. The Grand Jury re-alleges and incorporates by reference paragraphs 1 to 12 of this Indictment. 34. On or about the dates listed below, in the District of Massachusetts, and elsewhere, the defendant, DAVID M. NANGLE, having devised and intending to devise a scheme and arti?ce to defraud, and for obtaining money and property by means of materially, false and fraudulent pretenses, representations and promises, did transmit and cause to be transmitted by means of wire communications in interstate and foreign commerce, writings, signs, signals, pictures and sounds for the purpose of executing the scheme to defraud, as set forth below: Count Approximate Description 7. Date . . - i. 1 11/4/2015 Debit card payment of $1,675 to Lowell Golf Club in Lowell, MA, which involved an interstate wire transmission to RI Bank?s debit transaction processing center in East Providence, RI. 1 2 2/3/2016 Debit card charge of $119.85 to Rental Car C0. in Lowell, MA, whic involved an interstate wire transmission to RI Bank?s debit transaction processing center in East Providence, RI. 3 7/1/2016 Debit card payment of $654 to Lowell Golf Club in Lowell, MA, which involved an interstate wire transmission to RI Bank?s debit transaction . processing center in East Providence, RI. 4 3/9/2017 Debit card charge of $165.13 to Rental Car Co. in Lowell MA, which involved an interstate wire transmission to RI Bank?s debit transaction - processing center in East Providence, RI. - 5 4/26/2017 Debit card payment of $865 to Lowell Golf Club in Lowell, MA, which involved an interstate Wire transmission to RI Bank?s debit transaction processing center in East Providence, RI. 20 Case Document 1 Filed 02/13/20 Page 21 of 28 Count Approximate I Description Date 6 4/27/2017 Debit card charge of $356.52 to Rental Car Co. in Tewksbury, MA, which involved an interstate wire transmission to RI Bank?s debit transaction processing center in East Providence, RI. 7 12/11/2017 $500 Nangle Committee check payable to Straw Donor cashed at Chelmsford, MA bank, which involved an interstate wire transmission to RI Bank?s check processing center in East Providence, RI. 8 12/18/2017 Mobile deposit of $1,000 Nangle Committee check payable to Straw Donor in MA, which involved an interstate wire transmission to RI Bank?s check processing center in East Providence, RI. 9 1 1/10/2018 Debit card payment of $836 to Lowell Golf Club in Lowell, MA, which involved an? interstate wire transmission to RI Bank?s debit transaction processing center in East Providence, RI. 10 4/19/2019 Debit card payment of $400 to Lowell Golf Club in Lowell, MA, which involved an interstate wire transmission to RI Bank?s debit transaction processing center in East Providence, RI. Allin violation of Title 18, United States Code, Section 1343. 21 Case Document 1 Filed 02/13/20 Page 22 of 28 COUNTS ELEVEN - FOURTEEN Bank Fraud (18 U.S.C. 1344) The Grand Jury further charges: 35. The Grand Jury re-alleges and incorporates by reference paragraphs 1 to 17 of this Indictment. 36. From at least as early as December 2014 through June 2018, in the District of Massachusetts, and elsewhere, the defendant, DAVID M. NAN GLE, knowingly executed and attempted to execute a scheme and arti?ce to defraud a ?nancial institution, that is, the Lowell Bank, and to obtain moneys, ?tnds, credits, assets, securities and other property owned by and under the custody and control of the Lowell Bank, by means of materially false and ?'audulent pretenses, representations, and promises, as follows: Count Lowell Bank Loan Appx. Loan Closing Loan Principal 1 1 Home Mortgage Loan 2/27/2015 $191,250 12 Home Equity Line of Credit 9/13/2017 $35,000 13 HELOC 1/ 10/2018 $55,000 14 HELOC 6/15/2018 $115,000 All in violation of Title 18, United States'Code, Section 1344. 22 Case Document 1 Filed 02/13/20 Page 23 of 28 COUNTS FIFTEEN - TWENTY-THREE Making False Statements to a Bank (18 U.S.C. 1014) The Grand Jury further charges: 37. Indictment. 38. defendant, knowingly made a false statement and report, as detailed in paragraph 16 of this Indictment, for the purpose of in?uencing in any way the action of the Lowell Bank, an institution, the accounts of which are insured by the Federal Deposit Insurance Corporation, in order to obtain the following loans from the Lowell Bank: The Grand Jury re-alleges and incorporates by reference paragraphs 1 to 17 of this On or about the dates set listed below, in the District of Massachusetts, and elsewhere, the DAVID M. NAN GLE, f??u?tk i-a. .23; 15 Credit explanation letter (2/26/ 15) in connection car loan payments; With Home Mortgage 5 Omits gambling activity as reason for financial Loan difficulties. ($191,250) 16 Form 1003 (2/27/15) in connection with Home Mortgage Loan ($191,250) 0 Lists car loan as only outstanding debt; 1 Omits Dracut Owner debt and debt payments; 0 Omits Salisbury Owner and Lowell Owner debt and debt payments; . Omits regular use of campaign funds for personal use as ?Other? income; 0 Falsely represents that no part of the down payment is borrowed. 17 Employment/Income/Debt Certi?cation (2/27/15) in connection with Home Mortgage Loan ($191,250) 0 Represents that have not applied for or incurred any credit card or loan obligations that are not listed on my mortgage loan application 23 1 7i 7.7 Falsely blames ex?wife for causing him to miss recent Case Document 1 Filed 02/13/20 Page 24 of 28 18 Form 1003 (8/21/17) in ertes ?Home improvement? as purpose of loan; Connection With Home 0 Lists home mortgage and credit card debt as only debts; 13?1in Line Of credit 0 Omits Dracut Owner debt and debt payments; (HELOC) Omits regular use of campaign funds for ($35,000) personal use as ?Other? income. 19 Home Equity Consumer - Lists home mortgage and credit card debt as only debts; Loan Application .0 Omits Dracut Owner debt and debt payments; 13/ 17) in - Omits outstanding tax debt to as described in connection with Home paragraph 23; Eclin Line Of credit 0 Omits regular use of campaign funds for (HELOC) personal use as ?Other? income; 4 ($35,000) 0 Represents, among other things, that have no other outstanding ?nancial obligations of any kind 20 Form 1003 (11/27/17) in Writes ?Home improvement? as purpose of loan; connection With HELOC - Omits Dracut Owner debt and debt payments; W013 ($55,000) 0 Omits regular use of campaign funds for personal use as ?Other? income. 21 HECLA (12/10/17) in 0 Lists only debts as mortgage, credit card debts, and 2 connection with HELOC - medical debts; W013 ($55,000) 0 Omits Dracut Owner debt and debt payments; 0 Omits outstanding tax debt to IRS as described in paragraph 23; Omits regular use of campaign funds for personal use as ?Other? income; 0 Represents, among other things, that have no other outstanding ?nancial obligations of any kind 22 Form 1003 (4/26/18) in Writes ?Home improvement? and ?Other? as purpose of connection with HELOC loan; ($115,000) a Omits Dracut Owner debt and debt payments; 0 Omits regular use of campaign funds for personal use as ?Other? income. 23 HECLA (6/15/18) in 0 Lists only debts as mortgage, credit card debt, and connection with HELOC existing ($115,000) 0 Omits Dracut Owner debt and debt payments; - Omits outstanding tax debt to IRS as described in paragraph 23; Omits regular use of campaign ?lnds for personal use as ?Other? income; - Represents, among other things, that have no other outstanding ?nancial obligations of any kind All in violation of Title 18, United States Code, Section 1014. 24 Case Document 1 Filed 02/13/20 Page 25 of 28 COUNTS TWENTY-FOUR - TWENTY-EIGHT Filing False Tax Returns (26 U.S.C. 7206(1)) The Grand Jury ?irther charges: 39. The Grand Jury re-alleges and incorporates by reference paragraphs 1 to 32 of this Indictment. 40. On or about the dates set forth below, in the District of Massachusetts and elsewhere, the defendant, 1 DAVID M. NAN GLE, did willfully make and subscribe a Individual Income Tax Return, Form 1040, for the calendar years set forth below, each of which was veri?ed by a written declaration that it was made under penalties of perjury and was ?led with the Internal Revenue Service, and each of Which defendant did not believe to be true and correct as to every material matter in that each return understated defendant?s total income and overstated his total deductions, as a result of which each return understated the amount of taxes due and owing for that year. Count Calendar Year Appx. Filing Date 24 2014 2/7/2015 25 2015 4/17/2016 26 2016 2/18/2017 27 2017 4/14/2018 28 2018 2/22/2019 All in violation of Title 26, United States Code, Section 7206(1). 25 Case D00ument 1 Filed 02/13/20 Page 26 of 28 WIRE FRAUD FORFEITURE ALLEGATION (18 U.S.C. 981(a)(1)(C) and 28 U.S.C. 2461(0)) 1. Upon conviction of the offenses in violation of Title 18, United States Code, Section 1343, set forth in Counts One through Ten of this Indictment, the defendant DAVID M. NANGLE, shall forfeit to the United States, pursuant to Title 18, United States Code, Section and Title 28, United States Code, Section 2461 any property, real or personal, which constitutes or is derived from proceeds traceable to the offenses. 2. If any of the property described in Paragraph 1, above, as being forfeitable pursuant to Title 18, United States Code, Section and Title 28, United States Code, Section 2461(0), as a result of any act or omission of the defendant -- 21. cannot be located upon the exercise of due diligence; b. has been transferred or sold to, or deposited with, a third party; 0. has been placed beyond the jurisdiction of the Court; d. has been substantially diminished in value; or 0. has been commingled with other property which cannot be divided without dif?culty; it is the intention of the United States, pursuant to Title 28, United States Code, Section 2461(0), incorporating Title 21, United States Code, Section 853(p), to seek forfeiture of any other property of the defendant up to the value of the pr0perty described in Paragraph 1 above. All pursuant to Title 18, United States Code, Section and Title 28, United States Code, Section 2461(0). 26 Case Document 1 Filed 02/13/20 Page 27 of 28 BANK FRAUD FORFEITURE ALLEGATION (1'8 U.S.C. 1. Upon conviction of one or more of the offenses in violation of Title 18, United States Code, Sections 1344 and 1014, set forth in Counts Eleven through Twenty-Three in this Indictment, DAVID M. NAN GLE, defendant herein, shall forfeit to the United States, pursuant to Title 18, United States Code, Sections any property constituting, or derived from, proceeds obtained directly or indirectly as a result of such offenses. If any of the property described in Paragraph 1, above, as being forfeitable pursuant to Title 18, United States Code, Section 982(a)(2), as a result of any act or omission of the defendant -- i . a. cannot be located upon the exercise of due diligence; . b. has been transferred or sold to, or deposited with, a third party; c. has been placed beyond the jurisdiction of the Court; d. has been substantially diminished in value; or e. has been commingled with other property which cannot be divided without dif?culty; it is the intention of the United States, pursuant to Title 18, United States Code, Section 982(b), incorporating Title 21, United States Code, Section 853 to seek forfeiture of any other property of the defendant up to the value of the property described in Paragraph 1 above. All pursuant to Title 18, United States Code, Section 982(a)(2). 27 Case Document 1 Filed 02/13/20 Page 28 of 28 A TRUE BILL DUSTIN CHAO KUNAL PASRICHA ASSISTANT UNITED STATES ATTORNEYS DISTRICT OF MASSACHUSETTS District of Massachusetts: FEBRUARY 13, 2020 Returned into the District Court by the Grand Jurors and ?led. -. an], 28