Federal grand jury indicts Ray Nagin in broad conspiracy case - FOX 8 WVUE New Orleans News, Weather, Sports

Federal grand jury indicts Ray Nagin in broad conspiracy case

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New Orleans, La. - A federal grand jury has indicted former New Orleans mayor Ray Nagin on 21 corruption charges including wire fraud, bribery, filing false tax returns, conspiracy and money laundering.

The charges announced Friday come from a City Hall corruption investigation that already has resulted in guilty pleas by two former city officials and two businessmen.

Federal prosecutors had tried to reach a plea deal with Nagin, but he refused.  So they brought the case to a grand jury Friday.

"This office will continue its history of investigating and prosecuting public corruption" said U.S. Attorney Dana J. Boente. "This is an important part of the office's mission to serve the citizens of the Eastern District of Louisiana and make certain they have honest public officials."

"This indictment should serve as a reminder to current and former public officials that, in the interest of full accountability, the FBI pursues corruption even after an official leaves office," said FBI Special Agent Michael Anderson.

The potential penalties in this case are spelled out in a news release from the U.S. Attorney's Office, received by FOX 8 News Friday afternoon:

If convicted of conspiring with others to commit bribery and honest services wire fraud (Count 1), Nagin faces statutory penalties of up to five years in prison, a $250,000 fine and three years of supervised release. If convicted of accepting a bribes (Count 2-7), Nagin faces statutory penalties of up to 10 years in prison, a $250,000 fine and three years of supervised release on each count. If convicted of accepting payoffs that caused interstate wire communications to occur between Louisiana and other states (Counts 8-16), Nagin faces statutory penalties of up to 20 years in prison, a $250,000 fine and three years of supervised release on each count. If convicted of conspiring to commit money laundering (Count 17), Nagin faces statutory penalties of up to 10 years in prison, a $250,000 fine and three years of supervised release. If convicted of filing false tax returns for years 2005 through 2008 (Counts 18-21), Nagin faces statutory penalties of up to three years in prison, a $100,000 fine and three years of supervised release on each count.

The indictment also contains Notices of Forfeiture which puts the defendant on notice that the Government intends on forfeiting any and all property and profits concerned with and/or derived from any illegal activity referenced in the indictment.

Nagin's arraignment date is set for January 31 at 2:00 p.m. before U.S. District Judge Helen Berrigan.

The case centers on Nagin's relationship with former city vendors.

In June 2012, Covington businessman Frank Fradella admitted to paying off an unnamed former city official -- believed to be Nagin -- in exchange for favorable treatment for Fradella's business, Home Solutions.  Prosecutors say Fradella provided a $50,000 payment, a contract for future consulting work, and truckloads of free granite to that official.  Nagin and his two sons owned a granite countertop business called Stone Age. 

Nagin's attorney, Robert Jenkins, confirmed last August that his client did receive a federal grand jury subpoena for documents.  That was followed in October by Nagin's two sons appearing before the grand jury.

On November 30, prosecutors set their sights on Rodney Williams, former president of Three Fold Consulting.  That firm got a lot of no-bid work for the city when Ray Nagin was mayor.  Williams is accused of paying thousands of dollars to a "Public Official A" -- who sources say is Nagin -- as well as helping that official create dummy corporate documents to hide the alleged payoffs.  Williams pled guilty on December 5.

Nagin's case will now go before a federal judge, where a jury will decide whether he is innocent or guilty of the charges.

Nagin, born and raised in New Orleans, entered the race for the mayor's office in late 2001. At the time, he was running Cox Cable in south Louisiana, one of the largest cable companies in the country.   Nagin managed about 1,000 employees and a $200 million budget at Cox.  Four years earlier, he helped bring minor league hockey to New Orleans, becoming co-owner and president of the New Orleans Brass.

When Nagin decided to transition from businessman to politician, he promised a business approach to city government. He even pledged to reform how personal services contracts were awarded.  On March 2, 2002, the married father of three, a long shot in the race, became the 60th mayor of New Orleans.

Barely a month into the job, he was showing off his alleged crackdown on corruption as dozens were arrested and paraded before news cameras.  Even though most of those charges were refused, Nagin's approval rating rose sky-high, just a year into his first term.

More than two years later, Hurricane Katrina and its aftermath would change everything.  Nagin blasted the federal government's response to the disaster.   He too came under fire for his comments on MLK Day 2006 about rebuilding New Orleans as "a majority African-American city.  It's the way God wants it to be."  Displaced New Orleanians were beyond frustrated.

Despite a slow rebuilding process, voters would elect Nagin to a second term in 2006.  He edged out Mitch Landrieu 52 to 48 percent in a runoff.

By 2008, the former mayor's approval rating had plummeted to 31 percent; a year later, it was 24 percent.  Tired and term limited out, he left office on May 3, 2010.

By 2011, Nagin had formed CRN Initiatives, LLC.  As a consultant, public speaker and self-proclaimed "recovery expert," he travels the world to give advice on emergency preparedness.  He also self-published his first book, "Katrina Secrets: Storms After The Storm."

Now, federal prosecutors are writing the latest chapter in Ray Nagin's life.

Jenkins maintains the former mayor's innocence.

New Orleans Mayor Mitch Landrieu released a statement saying, "This is a sad day for the city of New Orleans. Today's indictment of former Mayor Ray Nagin alleges serious violations of the public's trust.  Public corruption cannot and will not be tolerated."

(The Associated Press contributed to this report.)

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