DOWNTOWN BROOKLYN — On Tuesday, Jan. 7, in federal court in Brooklyn, Erlene King pleaded guilty to wire fraud in connection with her attempt to steal funds from New York City’s Campaign Finance Board (CFB). The proceeding was held before United States District Judge Carol Bagley Amon. When sentenced, King faces up to 20 years in prison.
U.S. Attorney for the Eastern District of New York Breon Peace and James E. Dennehy, assistant director in charge of the Federal Bureau of Investigation (FBI) New York Field Office, announced the guilty plea.
“Instead of playing by the rules New York City established for free and fair elections, the defendant attempted to use the city’s matching funds program to give the campaign an unfair advantage,” said Peace. “My office and our law enforcement partners are focused on rooting out corruption in our electoral system to ensure that all candidates are operating on a level playing field.”
Peace expressed his appreciation to the CFB for its cooperation and assistance during the investigation.
“Erlene King deprived New York City residents of a fair election by attempting to manipulate hundreds of thousands of dollars in donor contributions to unlawfully favor her candidate,” said Dennehy. “King abused her position as a campaign treasurer and attempted to profit from exploiting a system designed to represent the voices of the city. The FBI remains steadfast in its mission to eliminate any source of corruption polluting our city’s democratic processes.”
The CFB oversees and administers a publicly funded campaign finance system in connection with municipal elections in New York City. This includes a “matching funds program” that provides eligible candidates with public funds based on the number and amount of certain donor contributions.
According to the CFB, the program “empowers New Yorkers in every neighborhood to make their voices heard in city elections.” In addition, the CFB maintains that “by encouraging candidates to raise small-dollar contributions from average New Yorkers, the program increases engagement between voters and those who seek to represent them.”
Candidates running for the Office of the Brooklyn Borough President in the 2021 election cycle were eligible to participate in the CFB’s matching funds program if they met certain criteria. Among other things, to be eligible to receive public funds, candidates were required to meet a two-part fundraising threshold. Specifically, a candidate had to collect a minimum number of donations and raise a minimum amount of money from New York City residents before the CFB paid any matching funds.
For candidates who ran for Brooklyn borough president during the 202 election cycle, candidates received up to $8 in matching funds for each $1 of eligible contributions, up to $175 per contributor. If a candidate received an eligible contribution of $175, then that candidate could collect up to $1,400 in matching funds. In total, the matching funds program provided up to $1,457,777 in public matching funds to a candidate for the Office of the Brooklyn Borough President. Because campaigns for Brooklyn borough president during the 2021 election cycle needed to raise at least $50,000 in eligible contributions to receive any matching funds, any candidate who was eligible to receive matching funds necessarily received at least $400,000 in matching funds from the CFB.
King served as the campaign treasurer for an unnamed candidate who ran in a primary for Brooklyn borough president during the 2021 election cycle. King admitted that she obtained fraudulent donations for the purpose of inducing the CFB to provide matching funds to the candidate’s campaign.
A number of those contributions, which were obtained at King’s direction, were fraudulent nominee contributions made in the names of individuals who either did not personally fund the contributions or were later reimbursed for their contributions (i.e., straw donors). For example, King used CashApp to send money to intermediaries and instructed them to distribute the money to fund contributions from straw donors to the candidate.
Other fraudulent contributions were made in the names of individuals whose identities were stolen and who had not personally contributed to the candidate. The CFB ultimately determined that the campaign submitted fictitious records and did not pay any public matching funds to the campaign.
The government’s case is being handled by the office’s Public Integrity Section. Assistant United States Attorneys Philip Pilmar and Eric Silverberg are in charge of the prosecution, with the assistance of Paralegal Specialist Rachel Friedman.
Federal prosecutors in Brooklyn have charged Erlene King with wire fraud, alleging that she used fake donors and forged documentation.
Adams has vowed to continue serving while fighting the charges, which he suggested, without providing evidence, are politically motivated.
