Wednesday, October 22, 2014

Political Consultant Charged With Embezzling $1.8 Million

From the Austin American Statesman on 10/20/2014:

Austin Republican political consultant Kenneth “Buddy” Barfield is due in court Tuesday after federal authorities on Friday charged him with embezzling nearly $1.8 million from the campaign of Lt. Gov. David Dewhurst.

Barfield is to plead guilty to wire fraud, making a false tax return and embezzlement of campaign funds, according to a plea agreement filed Friday in the U.S. Western District of Texas. He faces up to 20 years in prison on the first offense and up to three and five years, respectively, on the final counts.

Barfield admits he stole the funds from 2008 through 2012 while working as a campaign advisor for the David Dewhurst Committee and Dewhurst for Texas, according to the plea bargain he signed Oct. 6. He used the money for his own expenses, such as his home mortgage, school tuition for his children, personal investments and other living costs, the document states.

Authorities said Barfield would submit false and inflated invoices to a campaign finance bookkeeper, who would then issue payments via checks or electronic funds and wire transfers to bank accounts under Barfield’s name or that of his companies, the Alexander Group and Alexander Group Consulting. In October 2009, he reported zero taxable income on a federal tax filing form, when the correct amount should have been nearly $583,000, according to IRS criminal investigators.

Barfield has been under scrutiny since December 2012 when up to $1.3 million was found to have disappeared from Dewhurst’s campaign and he was accused of falsifying documents to the Texas Ethics Commission. He has had financial troubles since at least 2006 and signed over his 6,000-square-foot home in West Austin to Dewhurst as part of a settlement agreement reached in a civil lawsuit in November, according to Travis County court records.

Requests for comment to his lawyer, Gerry Morris, were not immediately returned Monday.

For background on the case, read here.

Update (2/27/2015): Barfield Sentenced to 87 months in prison:

A longtime political adviser to David Dewhurst was sentenced Friday to more than seven years in federal prison for embezzling millions of dollars from the former lieutenant governor’s campaign accounts.

Kenneth “Buddy” Barfield, an ex-Austin political consultant, plead guilty in October on charges of wire fraud, falsified tax returns and theft of campaign funds from a candidate for federal office, admitting to siphoning funds between 2008 and 2012 from two Dewhurst campaign accounts, the David Dewhurst Committee and Dewhurst for Texas.

In all, Barfield admitted to stealing a total of roughly $2.8 million from the Dewhurst committees, including cash pilfered from campaign contributions during a 2012 U.S. Senate race that pitted Dewhurst against Ted Cruz, according to court documents. Barfield used the money to pay the mortgage on a columned, two-story mansion in West Austin, on school tuition for his children, on personal investments and for assorted other living costs.

Appearing before U.S. District Judge Sam Sparks, Barfield said he deeply regretted his actions and apologized.

“I stand here ready to take the full punishment,” he said.

While Barfield faced a maximum of 28 years in prison, a pre-sentence report recommended a range between 70 months and 87 months.

Sparks said he had planned to exceed the recommended sentencing guidelines after reading the report and issue a ruling of no less than 10 years in prison. But federal prosecutors argued that Barfield fully cooperated in the case and should receive the low end of the sentencing scale.

Sparks reluctantly agreed to sentence Barfield within the recommended range, noting that his actions not only deprived contributors of their “political intent” but could have potentially impacted the final outcome of the race.

“Everybody upon arrest wants to cooperate. It’s all anybody can do,” Sparks said. “I hope a sentence of 87 months is a deterrent. One hundred and twenty (months) would have been better.”

Barfield and his lawyer declined comment outside of the courtroom.

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