A Lebanese-Nigerian billionaire has resolved — and two of his associates in Los Angeles have agreed to resolve — a campaign finance probe that determined they conspired to violate federal election laws by scheming to make illegal contributions to U.S. presidential and congressional candidates, the Department of Justice announced Wednesday.
Gilbert Chagoury, 75, who presently lives in Paris, France, paid a $1.8 million fine for providing $180,000 used to make contributions to four different federal political candidates in U.S. elections, according to the DOJ.
Chagoury, a foreign national prohibited by federal law from contributing to any U.S. elections, admitted he intended the funds to go to the candidates via illegal conduit contributions made in the name of other individuals.
According to the U.S. government, Chagoury’s actions resulted in violations of federal election contribution laws between June 2012 and March 2016, and he agreed to cooperate with the investigation. Chagoury entered into the agreement on Oct. 19, 2019, and he paid the fine that December.
Federal prosecutors said they entered into the deferred prosecution agreement considering, among other factors, Chagoury’s unique assistance to the U.S. government, his payment of a fine and acceptance of responsibility for his actions, and his residence outside the United States.
Two Chagoury associates — Joseph Arsan, 68, also of Paris, and Toufic Joseph Baaklini, 58, of Washington, D.C. — agreed to resolve allegations that they violated campaign contribution laws by assisting Chagoury in his illegal contributions. Arsan, a physician who worked as an assistant to Chagoury, admitted helping Chagoury reimburse others for contributions to political candidates, according to the DOJ.
In 2014, Arsan — at Chagoury’s direction — wired $30,000 to a third party and indicated on the wire information form that the funds were for a “wedding gift,” when he knew or should have known that the funds were reimbursement for making a political contribution to a campaign fund for a federal elected official, according to the DOJ.
Arsan’s deferred prosecution agreement, which took effect in November, also resolves a criminal investigation into his alleged tax violations in the years 2012 to 2016 stemming from his failure to report money he held in foreign bank accounts. Arsan agreed to pay $1.7 million in penalties to resolve the tax probe and to cooperate in the government’s investigation, according to the DOJ.
In his deferred prosecution agreement signed on March 1, Baaklini admitted to giving $30,000 in cash provided by Chagoury to an individual at a restaurant in Los Angeles who, along with others, later made campaign contributions to the 2016 campaign of a U.S. congressman. Baaklini also agreed to pay a $90,000 fine as part of his agreement and pledged to cooperate with the government’s investigation, the DOJ said.
In a separate and unrelated matter, Ray LaHood, 75, who served as U.S. Secretary of Transportation from 2009 to 2013, paid a $40,000 fine to resolve a federal criminal investigation into his conduct related to a $50,000 financial transaction between himself and Baaklini in June 2012, according to the DOJ.
LaHood, who at the time was suffering financial difficulties, admitted that in 2012 he accepted a $50,000 personal check from Baaklini — with the word “Loan” written in the check’s memo portion — and understood at the time that the money came from Chagoury, according to the DOJ.
The DOJ alleged that LaHood failed to disclose the $50,000 check on two government ethics forms as required because LaHood did not want to be associated with Chagoury. Later, LaHood also made misleading statements to FBI agents investigating Chagoury about the check and its source, according to the DOJ.
As part of his non-prosecution agreement signed in December 2019, LaHood also agreed to cooperate with the government’s investigation and repaid the $50,000 to Baaklini, the DOJ stated.
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