Former Mass. Rep. David Nangle Pleads Guilty to 23 Federal Fraud Charges with Sentencing Schedule for June 2021

In a U.S. District Court of Massachusetts virtual hearing, former state Rep. David Nangle pleaded guilty to 23 federal fraud charges.

Ex-state Rep. Nangle pleads guilty to federal corruption charges

Former state rep to be sentenced in June

FEB 24, 2021

In a U.S. District Court of Massachusetts virtual hearing Wednesday morning, former state Rep. David Nangle pleaded guilty to 23 federal fraud charges.

The charges include 10 counts of wire fraud, four counts of bank fraud, four counts of making false statements to a bank and five counts of filing false tax returns.

In each instance that Judge Rya W. Zobel asked Nangle whether he committed the crimes outlined by the U.S. Attorney’s office, Nangle answered affirmatively.

“Did you use campaign money for your own purposes that had nothing to do with the campaign?” Zobel asked in relation to the first 10 charges.

“Yes, I did, your honor,” Nangle said, also affirming he knew it was against the law.

Nangle, who appeared with his attorney, Carmine Lepore, in the Zoom hearing, could be seen gazing downward as Assistant U.S. Attorney Dustin Chao outlined Nangle’s actions that led to each of the charges.

A sentencing date of June 24 at 2 p.m. was set at the Wednesday hearing. Nangle was ordered to continue to comply with previously set conditions of release, as well as to not expend or acquire assets worth $5,000 or more without permission from the probation department due to restitution and forfeiture amounts to be determined at his sentencing.

The hearing started with a slight hiccup because Lepore had not filed a waiver of indictment for Nangle before the proceeding began. Lepore suggested taking a short break to file the paperwork, but Zobel said she could proceed with Nangle’s verbal consent, which he provided, as long as the written version was also filed later. Lepore said he would file the waiver shortly after the nearly hourlong hearing ended.

Nangle was initially indicted last February on 28 federal charges, which included the 23 charges he pleaded guilty to Wednesday plus an additional five counts of making false statements to a bank. A superseding information filing Monday, while containing the same allegations, replaced the indictment with the 23 charges he agreed to plead guilty to in a plea agreement filed Tuesday.

Under the plea deal, Nangle agreed not to challenge his conviction, any prison sentence of 30 months or less and any court orders related to forfeiture, restitution, fines or supervised release, on direct appeal or in any other proceeding, including a separate civil lawsuit. He is also subject to forfeiture of assets obtained as a result of the offenses, except for his current home in Lowell.

In the deal, the U.S. Attorney’s office agreed not to charge Nangle with obstruction of justice, or extortion or obtaining property under color of official right, related to a “stream of benefits” from a Billerica company owner to Nangle.

Any breach of the agreement by Nangle could allow the U.S. Attorney to pursue further charges.

Zobel outlined at length the rights Nangle would give up by entering the plea agreement, including to have a grand jury determine probable cause and to have his case heard by a jury of his peers. Nangle indicated he understood each and that he willingly entered the agreement.

“You’re not only buying a pig in a poke about the sentence, but you’re giving up any rights to complain about it, whatever it may be, to a higher court,” Zobel said.

In response, Chao clarified that there is an appellate carveout that allows Nangle to appeal any prison sentences over 30 months.

Zobel also noted the maximum penalties for each charge, and that the U.S. Attorney had not recommended specific sentencing for Nangle, which is common practice.

Each count of wire fraud carries a maximum penalty of up to 20 years in prison, three years of supervised release and a fine of up to $250,000.

The bank fraud and making false statements to a bank charges each carry a sentence of up to 30 years in prison, five years of supervised release and a fine of $1 million.

The false tax returns charges carry a sentence of up to three years in prison, one year of supervised release and a fine of up to $100,000.

The plea agreement document filed Tuesday had incorrectly stated the maximum fine for the false tax returns as $250,000, which Chao corrected to $100,000 during the hearing Wednesday.

Chao noted several witnesses connected to each of the charges would be willing to testify if the case had gone to trial.

According to the superseding information:

Nangle was heavily in debt and had poor credit and cash flow problems due to extensive gambling at various casinos around New England and online, incurring tens of thousands of dollars of debt and losses. To sustain his activities and keep himself afloat, he illicitly used campaign funds to pay for personal expenses, defraud a bank lender and collect income he did not report to the Internal Revenue Service. That income included money from his campaign account, money received from a Tyngsboro contractor and a jackpot of over $1,200 from casino winnings that he paid someone else to claim, which was captured on surveillance video, Chao said at the Wednesday hearing.

Nangle raised hundreds of thousands of dollars in campaign funds despite running for re-election unopposed since January 2013 (up until he lost to new state Rep. Vanna Howard in the September Democratic primary). Instead of using that money for permissible campaign purposes, he spent it on primarily personal expenses, including dues and charges at a Lowell golf club, rental cars to travel to casinos, flowers for his girlfriend, gas, hotel and restaurant charges (for which Nangle was already receiving state reimbursement), personal gift cards and cash. The Committee to Elect David Nangle used an account at a bank headquartered in Rhode Island, and he frequently used the committee debit card for his personal expenses.

Knowing his use of Nangle Committee funds was under scrutiny from past state Office of Campaign and Political Finance audits and reviews between 2007 and 2016, Nangle misled his staff and treasurer and concealed his theft of campaign funds by filing false campaign finance reports. He also embezzled money by issuing checks to a straw vendor, a friend of a relative who directed the vendor to cash the checks and give the money to Nangle.

In late 2014 and early 2015, the owner of a Billerica facilities maintenance company paid Nangle a total of $27,000 for purported real estate “consulting” services not actually rendered. Nangle used the funds as a down payment on a new home in Lowell, at which the company painted several rooms for free.

Between late 2014 and 2018, Nangle defrauded a Lowell bank of a $191,250 home mortgage loan and three home equity lines of credit, valued at $35,000, $55,000 and $115,000 respectively. He secured each by submitting materially false loan applications, misstating his income and understating his outstanding debt obligations.

Chao said in the Wednesday hearing that the last $115,000 home equity line of credit was used to repay the $35,000 and $55,000 loans, something Zobel noted was not clear in the superseding information.

She said that while it is clear each constituted a crime, the clarity on the amount owed to the bank was necessary to determine any restitution.

Nangle borrowed around $113,000 from associates who own local restaurants between 2011 and 2018. While he had repaid over $1,000 borrowed from a Lowell restaurant owner and about $10,000 from a friend who owns a Salisbury restaurant, as of late 2018 Nangle still owed about $87,000 to a relative who owns a restaurant and catering business in Dracut.

Nangle carried these debts for extended periods of time by spending campaign funds at the restaurants to appease his lenders. None of the associates are named in court documents, but Nangle’s cousin, Mike Lenzi, owns Lenzi’s in Dracut.

Between 2015 and 2017, a Tyngsboro contractor provided goods and services totaling about $8,000 at Nangle’s new home, as well as a $7,000 “loan.”

Nangle never paid for the services or the loan, but between 2015 and 2019 the contractor was awarded lucrative bids for construction projects for which Nangle secured state funding.

He asked the contractor to again do work worth several thousands of dollars at his home in early 2019.

Nangle helped a friend in Lowell get a state job and other work. The unnamed friend in turn assisted Nangle with completing and filing false federal income tax returns from 2014 to 2016. The filings included false entries and significantly inflated mileage amounts, expenses and charitable donations to assure Nangle would receive a federal tax refund each year.

On at least one occasion, the friend refused to submit the filings on TurboTax because he knew they were fraudulent, but Nangle hit the button and said he would “take the blame if anything happens.”

After the IRS disallowed about $30,000 in deductions on a previous filing, in 2017 and 2018 Nangle went to a Tewksbury professional tax preparer, who he misled, and continued to defraud the IRS by inflating expenses and concealing income.

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Former Mass. Rep. David Nangle Pleads Guilty to 23 Federal Fraud Charges with Sentencing Schedule for June 2021
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