Ex-DA Reed and son charged in 18-count indictment

Ex-DA Reed and son charged in 18-count indictment

NEW ORLEANS (WVUE) - Walter Reed, once one of the most powerful elected officials in southeast Louisiana, now faces a federal criminal trial himself.

A federal grand jury handed down and 18 count indictment 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.

Walter Reed was also charged with wire fraud for his personal misuse of campaign funds, mail fraud based on diverting funds from the St. Tammany Parish Hospital, money which was intended for the DA's office, into his personal accounts. He is also accused of filing false tax returns.

The grand jury returned the indictment on corruption charges Thursday afternoon.

This was U.S. Attorney Kenneth Polite's second press conference in two months. Both involved public officials.

"Another month, another public official being charged with violating the public's trust," Polite said.

According to the indictment, Reed and his son devised a scheme to defraud the Walter Reed Campaign and use money to pay for services that had nothing to do with the campaign or in an amount that exceeded the value of the services provided.

The investigation began after a series of investigative reports by FOX 8 and our partners at NOLA.com | The Times-Picayune.

The reports - part of our "Louisiana Purchased" probe of campaign finances - detailed our findings on a number of suspect practices by Reed and his political campaign. Among those findings were thousands of dollars in campaign expenditures to two companies owned by Reed's son.

One of those companies, Liquid Bread, received $29,400 for bar services at a 2012 fundraiser Reed held at the Castine Center in Mandeville. Those expensive services, we learned, did not include the alcohol itself or even serving the drinks.

Another of Steven Reed's companies, a video production business called Globop, received a $14,300 payment from his father's campaign for a minute-long video public service announcement, featuring the DA. Production experts we spoke with confirmed that the video itself was worth just a few hundred dollars, judging by its length and production quality.

Globop was also paid more than $8,000 for throwing a housewarming party at Reed's new condominium in 2012 that was unrelated to his campaign.

Prosecutors said Reed also paid for a number of other personal expenses, including flowers with a note that said, "To my rodeo girl from a secret admirer from Camp J," $1,885 fro a Thanksgiving dinner for Reed and his family, and a $2,600 steak house dinner for "Pentecostal Preachers" for the purpose of recruiting clients to refer him private civil legal work.

In all, Reed's campaign reported spending almost $100,000 since 2006 on services purportedly provided by his son's companies - a huge sum of money, and very little to show for it.

Walter Reed's work for St. Tammany Parish Hospital also came under scrutiny. In 2014, hospital officials claimed they had a long-standing relationship with the DA's office, paying $30,000 a year for Reed's legal services. But Reed said that deal was with himself personally, not the DA's office.

Reed's claim wears thin when held against the lengthy trail of documents - some presented by STPH itself - that indicated the hospital's deal was with the DA's office, not Reed as a private attorney. At some hospital board meetings, Reed even sent an assistant district attorney, Leo Hemelt, to attend in his place. Nonetheless, Reed kept the money he received for himself.

Reed was first elected DA for the 22nd Judicial District in 1984. His campaign raised almost $3 million since 1996 and spent more than $2.6 million of it - even though Reed didn't face an election challenge in that 18-year period.

Amid growing news investigations of his campaign and professional practices, Reed announced in July 2014 that he would not seek re-election to the DA's office. He denied any wrongdoing and, in a written statement, complained about news media "making an endless series of allegations regarding my character, and creating unwarranted and obtrusive disruptions in the function of my office."

Reports drew outraged reactions from many North Shore residents, including some top officials. St. Tammany Parish President Pat Brister demanded a state investigation of Reed - an investigation that Reed himself requested a short time later. Legislative auditor Daryl Purpera agreed, launching an audit of Reed's office in August 2014.

That state audit is not complete, but federal prosecutors were under no compulsion to wait as they began their own investigation of the long-time DA.

If convicted, Walter Reed faces up to 277 years in prison, followed by three years of supervised release, and up to a $4,500,000 fine. Steven Reed faces up to 65 years in prison, followed by three years of supervised release and up to a $1,000,000 fine.

Walter Reed is scheduled to make his first appearance in court on May 4.

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