What are the crimes alleged at the heart of the BOOST scandal?

The CNMI House anti-corruption committee’s investigation has thus far showcased documented evidence and accusations of criminal acts allegedly committed by people involved in the scandal-ridden BOOST program.

If you’re new to this story, here is a brief summary of the facts:

• In the months surrounding then-Governor Ralph Torres’ attempt at re-election, Mr. Torres launched a $17 million federally funded program to grant federal dollars to small businesses, farmers, fishermen, and ranchers.
• The government hired the Bank of Saipan to administer the program, but records indicate the decision-makers included a group of five people, four of whom were members of the Torres cabinet, including his chief of staff.
• As far as what has been revealed through public records so far, the Bank of Saipan spent more than $600,000 in federal funds on two businesses to market the giveaway of this money.
• The majority of the grant recipients had close ties – including family ties – to the Torres family, the families of the people directing the granting of funds, and the Torres reelection campaign.
• Phone records and message transcripts show an alleged conspiracy by decision makers to conceal their activities from an investigation launched after Mr. Torres lost the election to now-Governor Arnold Palacios.
• People who testified at that first investigation admitted the program had no rubrics, or objective process for accepting, processing, and considering grant applications.

A new legislature has commenced an investigation into allegations of the corrupt use of a pot totaling $1.5 billion in federal funds – all exhausted by Mr. Torres. This investigation picks up where the previous legislature left off – with a second round of hearings into the BOOST program. You may watch these hearings on Kandit’s Facebook page, and excerpts of the hearings in several stories on Kandit’s website from the past two weeks.

In these latest hearings, members of the committee have made allegations and presented evidence alleging a series of crimes committed by people involved in the BOOST program.

Here are some that surface from these allegations:

Theft of Public Money, Property, or Records:

“Whoever embezzles, steals, purloins, or knowingly converts to his use or the use of another, or without authority, sells, conveys or disposes of any record, voucher, money, or thing of value of the United States or of any department or agency thereof, or any property made or being made under contract for the United States or any department or agency thereof; or

“Whoever receives, conceals, or retains the same with intent to convert it to his use or gain, knowing it to have been embezzled, stolen, purloined or converted—

“Shall be fined under this title or imprisoned not more than ten years, or both.” – 18 U.S. Code §641

Honest Services Fraud:

“For the purposes of this chapter, the term ‘scheme or artifice to defraud’ includes a scheme or artifice to deprive another of the intangible right of honest services.” – 18 U.S. Code §1346

Theft and Bribery in Federally Funded Programs:

“To protect the integrity of the vast sums of money distributed through Federal programs, Congress enacted 18 U.S.C. § 666. The section is designed to facilitate the prosecution of persons who steal money or otherwise divert property or services from state and local governments or private organizations–for example, universities, foundations and business corporations–that receive large amounts of Federal funds.

“Subsection (a)(1)(A) of Section 666 prohibits the embezzlement, stealing, obtaining by fraud or otherwise unauthorized conversion to the use of any person other than the rightful owner or the intentional misapplication of property having a value of $5,000 or more by an agent, typically an employee, of an organization or of a state, local or Indian tribal government agency that receives $10,000 or more annually in Federal assistance. The maximum penalty is imprisonment for 10 years and a fine of the greater of $100,000 or twice the amount obtained in violation of the section.” – U.S. Department of Justice

Theft:

“A person commits the offense of theft if he or she unlawfully takes, uses or consumes the property or services of another with intent to permanently deprive the owner of his or her rights to the property or services.” – 6 CMC §1601(a)

Major Fraud Against the United States:

“Whoever knowingly executes, or attempts to execute, any scheme or artifice with the intent—

Frauds and Swindles:

“Whoever, having devised or intending to devise any scheme or artifice to defraud, or for obtaining money or property by means of false or fraudulent pretenses, representations, or promises, or to sell, dispose of, loan, exchange, alter, give away, distribute, supply, or furnish or procure for unlawful use any counterfeit or spurious coin, obligation, security, or other article, or anything represented to be or intimated or held out to be such counterfeit or spurious article, for the purpose of executing such scheme or artifice or attempting so to do, places in any post office or authorized depository for mail matter, any matter or thing whatever to be sent or delivered by the Postal Service, or deposits or causes to be deposited any matter or thing whatever to be sent or delivered by any private or commercial interstate carrier, or takes or receives therefrom, any such matter or thing, or knowingly causes to be delivered by mail or such carrier according to the direction thereon, or at the place at which it is directed to be delivered by the person to whom it is addressed, any such matter or thing, shall be fined under this title or imprisoned not more than 20 years, or both. If the violation occurs in relation to, or involving any benefit authorized, transported, transmitted, transferred, disbursed, or paid in connection with, a presidentially declared major disaster or emergency (as those terms are defined in section 102 of the Robert T. Stafford Disaster Relief and Emergency Assistance Act (42 U.S.C. 5122)), or affects a financial institution, such person shall be fined not more than $1,000,000 or imprisoned not more than 30 years, or both.” – 18 U.S. Code §1341

Money Laundering:

“To be criminally culpable under 18 U.S.C. § 1956(a)(1), a defendant must conduct or attempt to conduct a financial transaction, knowing that the property involved in the financial transaction represents the proceeds of some unlawful activity, with one of the four specific intents discussed below, and the property must in fact be derived from a specified unlawful activity.

“The actual source of the funds must be one of the specified forms of criminal activity identified by the statute, in 18 U.S.C. § 1956(c)(7), or those incorporated by reference from the RICO statute (18 U.S.C. §  1961(1)). Section 1956(c)(7)(B) includes in the list of specified unlawful activity certain offenses against a foreign nation. Thus, proceeds of certain crimes committed in another country may constitute proceeds of a specified unlawful activity for purposes of the money laundering statutes.

“To prove a violation of § 1956(a)(1), the prosecutor must prove, either by direct or circumstantial evidence, that the defendant knew that the property involved was the proceeds of any felony under State, Federal or foreign law. The prosecutor need not show that the defendant knew the specific crime from which the proceeds were derived; the prosecutor must prove only that the defendant knew that the property was illegally derived in some way. See § 1956(c)(1).

“The prosecutor must also prove that the defendant initiated or concluded, or participated in initiating or concluding, a financial transaction. A “transaction” is defined in § 1956(c)(3) as a purchase, sale, loan, pledge, gift, transfer, delivery, other disposition, and with respect to a financial institution, a deposit, withdrawal, transfer between accounts, loan, exchange of currency, extension of credit, purchase or sale safe-deposit box, or any other payment, transfer or delivery by, through or to a financial institution.” – U.S. Department of Justice

Wire Fraud:

“[T]he four essential elements of the crime of wire fraud are: (1) that the defendant voluntarily and intentionally devised or participated in a scheme to defraud another out of money; (2) that the defendant did so with the intent to defraud; (3) that it was reasonably foreseeable that interstate wire communications would be used; and (4) that interstate wire communications were in fact used.” – U.S. Department of Justice about 18 U.S. Code §1343

Contempt of the Legislature:

“A person shall be in contempt if the person: (1) Fails or refuses to appear in compliance with a subpoena or, having appeared, fails or refuses to testify under oath or affirmation; (2) Fails or refuses to answer any relevant question or fails or refuses to furnish any relevant book, paper, or other document subpoenaed by or on behalf of an investigating committee; or (3) Exhibits disrespect of an investigating committee by unlawfully, knowingly, and wilfully interfering directly with the operation and function of the committee by open defiance of an order in or near the meeting place of the committee, by disturbing the peace in or near the meeting place, by interfering with an officer of the committee in the lawful performance of his or her official duties, or by unlawfully detaining or threatening any witness of the committee because of that person’s duty as a witness.” – 1 CMC 1306(a)

(This list does not include the accompanying conspiracy statutes and the federal RICO Act)