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Judge overturns most counts in $128,000 fraud case against former legislative staffer

Former legislative staffer John Mills indicted on wire fraud charges

Former legislative staffer John Mills testifies before the Joint Legislative Committee on Redistricting on Oct. 21, 2011. (Photo by Evan Wyloge/Arizona Capitol Times)

A federal judge today overturned jury convictions on eight of nine counts of wire fraud for a former legislative staffer who had admitted in court that he took about $128,000 in campaign funds from former Speaker Jim Weiers.

The one count that stands is for a wire transfer John Mills used to replace money taken from the campaign bank account set up for Weiers’ 2008 election.

Judge James Teilborg’s decision will put a different spin on Mills’ sentencing on Nov. 6. The U.S. Attorney for Arizona was asking for a prison term of 24 to 30 months.  Mills’ attorney, Patricia Gitre, was arguing for five years of probation, according to a sentencing memorandum filed in U.S. District Court before Teilborg’s written decision.

Mills was indicted on 15 counts of wire fraud in September 2012.  A jury convicted him on nine of those counts in July.

Teilborg’s decision hinged on whether the fraud was complete when Mills moved money from the campaign account to his personal account, or whether moving the money by wire from his personal account to other accounts for his personal use was necessary or essential to the fraud.

“Although Mills’ scheme to defraud was ongoing and was not a one-time operation, the interstate wire transfers for personal expenses and investments were not necessary for the long-term success of the fraud,” Teilborg wrote. “The interstate wire transfers from Mills’ personal account are, at most, tangentially related to the fraud of stealing money from the campaign account.”

Teilborg upheld the count in which Mills returned the money, finding that the deposit was part of a larger scheme to hide the theft from Weiers. Other parts of the scheme included filing fraudulent campaign statements and making the $100,000 deposit at the last second to conceal his previous withdrawals.

Mills had been in financial straits when he took the money to make investments and for other personal uses. He put $100,000 back into the account just before the election, when the campaigns debts were coming due.

The investigation of Mills actually began as a public corruption investigation of Weiers in 2008, according to Gitre’s sentencing memorandum.

The court documents not only confirm a previous public acknowledgement of Weiers, a Phoenix Republican, that the FBI was after him, but also provide a glimpse into the lengths investigators went in the investigation. The federal government over three years issued 147 grand jury subpoenas seeking records from various institutions pertaining to Weiers and Mills, interviewed numerous witnesses and collected documents from them and government agencies.

Weiers, who was never charged with a crime, was not immediately available for comment.

His attorney, Patricia Gitre, provided no more details about the Weiers probe except to say it was part of a larger investigation of Arizona lawmakers and public figures, and that all evidence pertaining to it is kept confidential by court order.

Federal prosecutors got the same type of court order in the case against former Rep. Ben Arredondo, a Tempe Democrat, who was sentenced this year to 18 months of home arrest after pleading guilty to charges in connection with accepting bribes while he was a Tempe City Councilman.

The U.S. Attorney for Arizona has refused to provide details of the larger investigation and refused to say whether the Arredondo and Mills investigations were part of it.

Gitre is using Arredondo’s sentence and criticisms of the FBI by his sentencing judge in seeking a sentence of probation for Mills.

 

 

 

 

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