Former Louisiana Senator Charged with Wire Fraud for 7 Years of Campaign Fraud and Other Crimes

Louisiana – On July 14, 2022, the United States Attorney’s Office announced that former Louisiana State Senator and Chair of State Political Party “A”, Karen Carter Peterson, age 52, from New Orleans, Louisiana, was charged today in a one-count bill of information with wire fraud, in violation of Title 18, United States Code, Section 1343.

According to court documents, Peterson was a Louisiana State Senator for the 5th District from approximately 2010 until approximately April 8, 2022, and the Chair of State Political Party A between approximately 2012 and 2020. As a Louisiana State Senator, Peterson established and ran the “Karen Carter Peterson Campaign Fund (“KCPCF”)” to solicit and raise campaign funds from individual and corporate donors. The campaign funds were raised based on representations and the premise that the funds would be used to help Peterson win re-election to the position of State Senator.

For nearly seven years, Peterson diverted and caused her friends and associates to divert campaign funds from the KCPCF to Peterson’s personal use for the purpose of obtaining and using money and property from KCPCF contributors through materially false and fraudulent representations and promises. She accomplished this by writing checks drawn on the KCPCF account to her friends and associates and instructing them to cash the checks and then give her the majority or all of the proceeds.

Peterson used the funds for personal expenses unrelated to her campaign or holding public office, including gambling-related expenses, and failed to disclose to potential contributors that she had already used funds contributed to the KCPCF for her personal benefit while soliciting additional contributions. Furthermore, Peterson caused the public filing of false and misleading campaign finance reports that mischaracterized expenditures as being for a legitimate campaign or public office purposes when they were, in fact, unrelated to such purposes and were diverted to Peterson’s personal use.

In her capacity as Chair of State Political Party A, Peterson oversaw Party A’s strategic decision-making, operations, outreach, and direction, as well as its permanent staff, including individuals with signatory authority over State Political Party A’s financial accounts. Peterson used her position to select entities (” Companies”) run by her associates, ostensibly to provide campaign-related services to State Political Party A, and to determine how much Party A would pay each of the Companies. In fact, the Companies provided no or minimal services to State Political Party A. Peterson then directed the Companies to remit a portion of the funds paid to them by State Political Party A to Peterson via checks drawn on the Companies’ accounts or cash.

Peterson faces a maximum sentence of twenty years in prison, a fine of up to $250,000.00, up to three years of supervised release after imprisonment, and a mandatory $100 special assessment fee if convicted.

The US Attorney’s Office reiterated that a bill of information is just a charge and that the defendant’s guilt must be proven beyond a reasonable doubt.

In this case, the United States Attorney’s Office praised the work of the Federal Bureau of Investigation, the Internal Revenue Service – Criminal Investigation, and Forensic Accountant Josephine M. Beninati, CPA, CFE, as well as the Metropolitan Crime Commission. The prosecution is led by Assistant United States Attorneys Jordan Ginsberg, Chief of the Public Corruption Unit, and Jonathan L. Shih.