NEW ORLEANS (WVUE) - A once powerful North Shore district attorney,Walter Reed, and his son, Steven, both plead not guilty to charges of fraud and money laundering Monday in federal court.
A federal grand jury handed down an 18-count indictment in April against the former district attorney of St. Tammany and Washington parishes. The indictment also charges his son with four counts related to the corruption charges.
Walter Reed, 68, and his son Steven, 43, were charged with conspiracy to commit wire fraud and money laundering related to misuse of funds from the former district attorney's campaign account.
Early May of last year, we aired stories questioning payments made from Walter Reed's election campaign to companies owned by his son. Specifically, we focused on a $29,400 payment - an invoice that showed Reed hired his son to provide bar services for a fundraiser.
April's indictment says, "On or about May 21, 2014," following "widespread news media coverage" of that "$29,400 payment… Steven Reed filed an amended federal income tax return… for the first time," reporting that money as income - essentially changing it from a payment of services. The feds appeared to take that as an attempt to cover his tracks.
In the 18-count indictment, Walter Reed is charged with misspending at least $100,000 of campaign money "on personal expenses unrelated to his campaign."
Our stories on Walter Reed questioned a $14,300 public service announcement that one production expert says was a low-budget production.
"I would guess between 500 and 750 dollars," said Bess Carrick, a TV producer and director with Blackbird Media.
The indictment says services such as this were "not commensurate with the work performed."
"The public demands that we have zero tolerance for this kind of criminal conduct," said U.S. Attorney Kenneth Polite in a news conference shortly after the indictment was announced. "So that is our mandate, and with that mandate we have our marching orders, all of us assembled. We will continue to march forward every day and every month until every public official gets the message that violating the public trust will most likely end you up in prison."
Polite didn't take any questions at the news conference, but he did outline some of the other alleged misuses of campaign money.
Reed's 2012 campaign finance report includes a $614 payment to Flowers 'N Fancies, which he labeled a promotional expense. According to the indictment, the payment was unrelated to Reed's campaign, and were actually floral arrangements sent to his daughter and a "Person A," including "a message that stated, 'to my rodeo girl from a secret admirer from Camp J."
The indictment also "includes an allegation of [Reed's] use of $1,800 to pay for a family Thanksgiving dinner," Polite said, "at a local restaurant again completely unrelated to his campaign."
The feds says Steven Reed used much of the campaign money he received to repay a loan. The indictment details how Reed and the federal government alleges Reed had campaign vendors inflate their invoices and then use that extra money "to funnel campaign monies" to Steven Reed.
And they focused on another deal detailed in a series of "Louisiana Purchased" reports. The DA's office had an agreement with St. Tammany Parish Hospital to provide legal services. The indictment says Reed deposited checks from the hospital into his personal bank account, rather than the bank account of the DA's office.
Rick Simmons, Reed's attorney, insisted in his own news conference back in April that Reed did not consider the deal to be between the hospital and his public office, but rather with him as a private attorney. Simmons asked the public to not simply convict his client outright, but wait for all of the facts to come out.
"In this particular case, the indictment mirrors the media inquiry during last year, which has a lot of inaccurate and sometimes misleading and incomplete commentary," Simmons said.
As for the campaign expenditures, Simmons told reporters, "It's important for the public to remember, campaign funds are not public funds. It's a matter of whether your supporters have given, contributed to you."
And in another case, Reed's campaign report shows he spent $4,700 with the First Pentecostal Church in Bogalusa for a campaign function. But the indictment says the money actually went to the "First Pentecostal Church in North Little Rock, Arkansas." Prosecutors say the payment actually funded a dinner for religious figures; Reed allegedly hoped to recruit them to "refer private legal work to him and his law firm."
Both Reed and his son are free on $25,000 bonds. If convicted on all 18 charges, Reed could face 277 years in prison and $4.5 million in fines.
Their trial date is set for July 6.