MIAMI -- Lobbyist Jack Abramoff, a key figure in investigations involving House Majority Leader Tom DeLay, was indicted Thursday by a federal grand jury on fraud charges arising from a deal to buy casino boats.
Abramoff and a partner in the $147 million purchase of SunCruz Casinos were named in a six-count grand jury indictment unsealed Thursday in Fort Lauderdale. Prosecutors say they concocted a fake $23 million wire transfer to defraud two lenders out of about $60 million to finance the deal.
Abramoff and New York businessman Adam Kidan bought SunCruz from Greek-born entrepreneur Konstantinos "Gus" Boulis for $147 million in September 2000, but the deal soon fell apart. Amid bitter legal fighting over the sale, the 51-year-old Boulis was shot to death five months later in what police called a hit that remains unsolved.
The indictment against Abramoff charges that he used income from SunCruz to finance political fund-raising activities, including events at private boxes at Washington-area sports venues such as the MCI Center and Oriole Park at Camden Yards.
It's the first criminal charges against Abramoff, who is also under investigation for his lobbying activities on behalf of Indian tribes and for his role in paying for overseas trips for DeLay, the second-ranking Republican in the U.S. House.
DeLay, R-Texas, was not mentioned in any lawsuits involved in the SunCruz deal.
Abramoff denies any wrongdoing in the SunCruz deal and insists that his signature on the wire transfer was obtained under false pretenses, said his Miami defense lawyer, Neal Sonnett.
"He was not involved in an effort to defraud any of the partners or lenders in the SunCruz deal," Sonnett said.
Abramoff was set to appear Friday in federal court in Los Angeles. Kidan's attorney, Martin Jaffe, said his client would surrender voluntarily to federal authorities in Fort Lauderdale on Friday.
"I have cooperated fully with the federal investigation for the past three years because I have nothing to hide," Kidan said in a statement. "I did nothing wrong and these allegations are totally unfounded."
Abramoff, 40, and Kidan, 36, each face up to 30 years in prison and thousands of dollars in fines if convicted on all six counts of conspiracy and wire fraud. Prosecutors also plan to seek forfeiture of the $60 million lost by the lenders.
The two lenders that were allegedly defrauded in the SunCruz deal were Foothill Capital Inc., a subsidiary of Wells Fargo, and Citadel Equity Fund Ltd., based in the Cayman Islands, according to court documents in a lawsuit filed by the two companies.
DeLay has asked the House Ethics Committee to review allegations that Abramoff or his clients paid some of DeLay's overseas travel expenses. DeLay has denied knowing that the expenses were paid by Abramoff, whom he once described as "one of my closest and dearest friends."
Abramoff collected more than $100,000 for President Bush's 2004 re-election campaign and raised thousands of dollars for DeLay and other Republican members of Congress. He also was friends with former Christian Coalition leader Ralph Reed, now a Republican candidate for lieutenant governor in Georgia.
The SunCruz fleet of 11 ships had 2,300 slot machines and 175 gaming tables and sailed from nine Florida ports and Myrtle Beach, S.C., to international waters. The company continues to operate gambling cruises under new ownership after emerging from bankruptcy.
© 2005 Associated Press