Former rep pleads guilty to bank, tax fraud

Crime

BOSTON (SHNS) – A year after he was first arrested and charged with a slew of bank and wire fraud crimes, Lowell Democrat David Nangle pleaded guilty in U.S. District Court on Wednesday to using campaign funds to pay for a golf club membership and to support his gambling habits.

Nangle, who served 22 years in the Legislature before losing his bid last year for a 12th term, also admitted to concealing debt from banks to obtain a home mortgage and three home equity lines of credit totaling $115,000 and to filing false tax returns for five years.

The plea was accepted Wednesday by U.S. District Court Judge Rya Zobel, and a sentencing hearing was set for June 24.

“Elected representatives are expected to work for the benefit of their constituents, not to line their own pockets,” said U.S. Attorney Andrew Lelling, in a statement after Zobel accepted Nangle’s plea. “Mr. Nangle violated his obligations to the public by siphoning campaign dollars to cover the cost of his personal lifestyle, violating both federal law and the trust placed in him by voters.”

Lelling, who was appointed by former President Donald Trump, is due to resign at the end of the week, and it’s unclear if a new U.S. Attorney chosen by President Joe Biden will be in place by the time of Nangle’s sentencing hearing.

Nangle, 60, faces the potential of decades in prison and fines totaling millions of dollars, but federal prosecutors have not yet indicated how steep a sentence they will seek. Assistant U.S. Attorney Dustin Chao noted that supervised released was a possibility on all 23 counts to which Nangle pleaded guilty.

As part of his plea, Nangle agreed to waive his right to appeal any sentence of 30 months or less in prison, and the government gave up its right to pursue obstruction of justice or extortion charges related to an alleged “stream of benefits” Nangle received from an unnamed associate who owns a Billerica company.

“You’re not only buying a pig in a poke in the sentence, but you’re giving up the right to complain about it,” Zobel told Nangle, making sure he understood what he was agreeing to in the plea.

Throughout the morning’s proceeding over Zoom, Nangle sat expressionless at a table next to his attorney Carmine Lepore, with three framed photographs of Rome’s Colosseum on the wall behind them. He spoke only briefly to answer questions posed by the judge about whether he understood the rights he was giving up by entering a guilty plea and to admit to the crimes charged.

The government said that had Nangle’s case gone to trial it was prepared to prove that Nangle defrauded his donors and his campaign committee by illegally using money to gamble, pay golf club dues and rent cars to drive to casinos in Massachusetts, New Hampshire and Rhode Island.

The indictment from February suggested Nangle had used about $70,000 in campaign funds for illegal purposes, and the former lawmaker told the judge Wednesday he was aware at the time that he was breaking the law.

Chao said the government would also call witnesses and present documents showing Nangle shielded debt from banks to obtain a home mortgage and home equity loans to pay for gambling trips, and that from 2014 through 2018 he filed false tax returns understating his income and and claiming charitable deductions for donations he never made.

Following his arrest in February, Nangle resigned his position in House leadership as one of four division chairs under then Speaker Robert DeLeo. He also relinquished his membership on the House Committee on Ethics and House Rules Committee, but stayed on in the House and vowed to fight the charges brought against him.

He ran for reelection, which would have been a 12th term for the long-time Lowell representative, but lost in the Democratic primary to Rep. Vanna Howard, who was sworn into office in January.

After multiple delays in his case due to COVID-19 and other factors, Nangle on Wednesday agreed to plead guilty to 10 counts of wire fraud, four counts of bank fraud, four counts of making false statements to a bank and five counts of filing false tax returns.

On the wire fraud charges, Chao said the government was prepared to show that Nangle engaged in a scheme to report false campaign charges and use the money instead for personal expenses, including a Lowell golf club membership, rental cars to travel to casinos.

He said the government’s witnesses would include golf club employees, his former chief of staff, employees of Enterprise Rent-A-Car and a woman who would testify that two checks were written out in her name for consulting services that she did not provide.

The eight counts of bank fraud and making false statements to a bank pertained to a 2015 mortgage for $191,000 and three home equity lines of credit that totaled $115,000.

“The proceeds of many of those loans were actually used to pay for casino trips,” Chao said.

Asked by Zobel what he told the banks to secure those loans, Nangle said, “I didn’t put down the personal debt that I had to some other individuals.” It was only time Nangle explained what he had done in his own words, or said anything anything more than, “Yes, your honor.”

The final five counts Nangle pleaded guilty to pertained to his tax returns in 2014, 2015, 2016, 2017 and 2018.

Chao said the government could prove that Nangle falsely claimed charitable deductions for donations he did not make and for car mileage that he did not accrue. The U.S. Attorney’s office said if the case went to trial it would call employees from the RMV to attest that Nangle did not drive the miles he reported, a witness who would testify to being directed by Nangle to use Turbo Tax to input false entries and a Tyngsborough contractor who would testify to providing in-kind services for Nangle for which he was not paid.

Chao said the government also had Nangle on video at Mohegan Sun paying someone to collect $1,000 in winnings that were not reported on his taxes.

First elected in 1998, Nangle held a variety of leadership positions over his more than two decades on Beacon Hill, starting under former Speaker Thomas Finneran.

In his last year in office after giving up his position as a division leader, state records show Nangle earned $86,880 in salary and stipends, but he earned considerably more the prior three years, averaging $109,982 from 2017 through 2019. He topped out in 2019 at $114,901.

Prior to 2017 when the Legislature voted to increase the pay for office expenses and leadership and committee chairmanship assignments, Nangle earned $74,732.

A state Treasury official confirmed that Nangle could lose his state pension if the State Retirement Board determines that the crimes to which he pleaded guilty were related to his job and the office that he held.

Nangle’s campaign account had about $20,685 in it at the time of his arrest last February, but was closed in January after the legislator spent down the balance over his closing months in office.

As he waits for his sentencing, the government only asked that Nangle be instructed not to make large financial transactions without checking first with the Department of Probation, since he could be required to pay restitution or forfeit assets.

“Don’t get rid of any property worth more than $5,000,” Zobel cautioned.

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