A former internet entrepreneur who accused Bill and Hillary Clinton of fundraising-related fraud in connection with Mrs. Clinton’s 2000 Senate bid, Peter Paul, was sentenced recently to ten years in prison on a stock fraud charge.
Judge Leonard Wexler’s sentence was the statutory maximum for the charge Paul pled guilty to, but the judge did not explain his reasons for imposing that term, sources present at the June 25 sentencing said.
Brace yourselves for the back story:
Paul, 60, was a key organizer and sponsor of a star-studded and, in many ways, star-crossed fund-raising gala held in Los Angeles during the Democratic National Convention in 2000. The event featured Cher, Patti LaBelle, Michael Bolton, John Travolta, Jennifer Aniston, Brad Pitt and Muhammad Ali, among others.
After it emerged in the Washington Post that Paul was a thrice-convicted felon, he alleged that a Clinton-related campaign committee grossly underreported the cost of the event and the amount of money he had given to finance it. He also filed a lawsuit accusing Mr. Clinton of reneging on a deal to work for him after leaving office and accusing the Clintons and several confederates of interfering in business deals Paul had in the works.
Aides to the Clintons rejected virtually all of Paul’s allegations, but the Justice Department seemed to endorse the central claim about the over-cost and under-reported fundraiser when a grand jury indicted the national finance director of Mrs. Clinton’s Senate bid, David Rosen in 2003 for causing the filing of FEC reports which allegedly put the value of in-kind donations to the event at about $400,000 when they actually exceeded $1.2 million.
In another twist, following a trial in 2005,Rosen was acquitted of the charges. However, his defense was that he didn’t know about the underreporting–not that it didn’t occur. In late 2005, a Clinton-connected political committee agreed to pay a $35,000 fine for underreporting gifts to the event by more than $700,000.
Before hosting the 2000 gala, Paul had three felony fraud and drug convictions from the 1970s and 1980s. He was an executive at Stan Lee Media, a firm set up to market internet and film depictions of cartoon characters from the creator of Spiderman. The firm collapsed in 2001 and Paul headed for Brazil, where he had another business. He was indicted on charges of manipulating Stan Lee Media’s stock price and spent at least two years in a Brazlian prisoner as his then-attorney, Larry Klayman, either negotiated with Justice Department lawyers or fought Paul’s extradition, depending on whose narrative you believe.
In March 2005, Paul pled guilty to one felony count of stock fraud. One of the puzzling aspects of his case is how he managed to remain free on bond for more than four years while awaiting sentencing. Lawyers involved in the case said there were delays in preparing a probation agency pre-sentencing report. The case was also reassigned from one prosecutor to another. The Justice Department had no official comment in response to a question about the delay.
Wexler gave Paul credit for the time he spent in the Brazilian prison as well as in a Long Island jail. As a result, he’ll probably serve about another 6 years behind bars. Wexler ordered Paul to report to prison by August 7.
Paul also filed a lawsuit against the Clintons and several associates over their alleged fleecing of him and interference in his business dealings. Both Clintons have been dismissed from the case as defendants and, in April, Mrs. Clinton won an award of $130,000 in legal fees against Paul. The suit is still pending against a producer of the 2000 gala, Gary Smith, so it is possible the Clintons could be called as witnesses in the case.
Paul unsuccessfully sued the group Klayman once headed, Judicial Watch, for mishandling the civil suit. Paul is now suing the attorney he retained to replace Klayman on the case, Gary Kreep.
A startling number of current or future felons were involved in the 2000 gala: four in all. In addition to Paul, three other men who organized or attended the event later pled guilty to criminal conduct which pre-dated the event.
The charity-fundraising planner who invited stars like Cher and Patti LaBelle, Aaron Tonken, was sentenced to more than five years in prison for diverting money from charity events.
A Chicago businessman, former topless club owner and self-described "dear friend" of Mr. Clinton, Jim Levin, got a sentence of probation after he pled guilty to a minority contracting fraud scheme involving the Chicago Public Schools. Testimony at Rosen’s trial indicated that Levin was asked by Mr. Clinton to monitor preparations for the gala.
Another man who had special entree at the gala, New Orleans political consultant Ray Reggie, later pled guilty to bank fraud. He wore a wire for the FBI and was sentenced to a year in prison. Reggie is a brother in law of Sen. Ted Kennedy (D-Mass.)
Clinton aides told prosecutors that Paul was permitted to sponsor the gala in 2000, despite his felony record, because he "missed the vet." The charges against the other men were not filed until after the fund-raiser.
(I’m also guilty–guilty of being tardy in posting this item. But, as far as I can tell, no one else has beat me to it.)