Investigative Group

‘Scam PAC’ Operators Charged With $23 Million Fraud And Money Laundering Scheme

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Two Arizona men were charged Thursday for operating a network of fraudulent political action committees that scammed tens of thousands of donors out of more than $23 million between 2014 and 2017.

Two brothers, William and Robert Tierney, were arrested and charged with wire fraud, mail fraud and money laundering for operating at least nine political action committees for the purpose of enriching themselves, the Department of Justice announced Thursday.

The Tierney brothers used the so-called scam PACs to target small-dollar donors across the country with claims that contributions would be used to support political causes such as autism awareness, law enforcement appreciation and pro-life causes, according to a complaint filed with the Justice Department.

However, less than one percent of the money contributed for the PACs were used for political purposes. The rest was either paid to the Tierney brothers or spent to further perpetuate the fraudulent scheme.

“The defendants, as alleged, capitalized on the sympathy and activism of those who sought to support awareness of various causes near and dear to their hearts,” FBI Assistant Director William Sweeny Jr. said in a statement Thursday. “Instead, virtually none of the money raised was used for its intended purpose, and the so-called political action committees served as nothing more than a front for an extensive personal fundraising campaign.”

The brothers utilized multiple fraudulent identities, such as “Bill Johnson” and “Emma Smith,” to target small-dollar donors with claims that contributions would be used to advance “coast to coast” education and advocacy causes.

Of the $23 million donated to the scam PACs between 2014 and 2017, only $109,000 were directed to political candidates. The Tierney brothers paid themselves $3.5 million from their fraudulently obtained bounty.

One of the scam PACs, Grassroots Awareness PAC, allegedly targeted donors with claims that contributions would be used to “educate our community about autism spectrum disorder, and mobilize political support for autism research and services to help children with autism and their families.”

The “grassroots” organization claimed to “maintain the high standards of fiscal accountability,” according to the complaint.

The brothers are alleged to have created a network of shell companies to funnel donated funds through to give the appearance that the PACs were engaged in legitimate activities. The “Stealth LLCs,” as one of the brothers took to calling the shell organizations, falsely stated they provided political consulting and fundraising service to political organizations. The shell companies actually had no employees and had no real clients. Their only purpose was to launder contributions out of the PACs.

Both brothers face up to 70 years in prison if convicted. They’re expected to be presented Thursday afternoon in the District Court of Arizona.

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