Abramoff Should Forfeit Tax Refund, Justice Dept. Says
Thursday, May 21, 2009; 7:58 PM
Convicted lobbyist Jack Abramoff should not be allowed to use his tax refund of more than $500,000 to pay back his lawyers, accountants and others because he has yet to make restitution for the millions of dollars he defrauded from Indian tribes he represented, the Justice Department says.
Abramoff, who has been in prison since 2006, received a $520,189 refund from the IRS on May 4. After his lawyers notified the government, Justice asked a federal judge today to stop Abramoff from paying his bills.
Under the restitution order by U.S. District Judge Ellen S. Huvelle, Abramoff and former associate Michael Scanlon still owe more than $23 million to the tribes. Abramoff was not expected to be able to make payments until after he got out of prison, the government said. However, "Mr. Abramoff was required by statute to apply the value of that refund to his restitution obligation, notwithstanding that the money was received while he was in prison and before the payment schedule had taken effect," the Justice Department filing said.
The reasons for the large tax refund were not explained in the court filings. Abramoff's lead attorney, Abbe D. Lowell, did not return telephone calls seeking comment today.
Abramoff admitted that he and Scanlon, a onetime press aide to former House Majority Leader Tom DeLay (R-Tex.), ran a kickback scheme that defrauded the tribes. Abramoff told tribes to hire Scanlon's public relations firm at inflated prices and the two split the profits. Huvelle sentenced Abramoff last year to four years in prison for fraud and influence-peddling. He had already been serving a term of five years on a related conviction in 2006.
Scanlon also has pleaded guilty but has not yet been sentenced.
Among those paid out of the tax refund were Abramoff's lawyers, including Lowell's firm McDermott, Will & Emery LLP , which received $75,000. Another firm, Zuckerman Spaeder LLP, received $25,000 from the tax refund, the government said in its filing tonight.
Others paid were: $104,000 to Abramoff's accountants, Mendelson & Mendelson; $87,500 to repay loans from Abramoff's father; $50,000 to pay back state taxes in Maryland; $47,000 toward a Bank of America credit card balance; $22,000 for property taxes; $5,000 to repay a personal loan; $5,000 toward tuition expenses at Hebrew Academy; and $1,500 to repay a loan from the Franco Foundation.
The government pointedly noted a large portion of the refund "was spent before informing the government of its receipt."
Justice Department attorneys asked Huvelle to order Abramoff and his family to stop spending whatever remains from the IRS refund and require Abramoff to account for what has been spent so far. The Justice Department also wants Abramoff to notify the court of any additional assets or debts of $2,500 or more held by him or his immediate family and get approval before he or his family spend more than $2,500.
More than a dozen people, including an Ohio congressman and a deputy secretary of the interior, have been convicted in the wide-ranging federal investigation into the lobbying scandal, and Justice Department officials said the probe is continuing. Still under scrutiny are DeLay (R-Tex.) and former Rep. John T. Doolittle (R-Calif.).