Andy Kroll

Andy Kroll

Senior Reporter

Andy Kroll is Mother Jones' Dark Money reporter. He is based in the DC bureau. His work has also appeared at the Wall Street Journal, the Detroit News, the Guardian, the American Prospect, and TomDispatch.com, where he's an associate editor. Email him at akroll (at) motherjones (dot) com. He tweets at @AndrewKroll.

Get my RSS |

How a Mexican Citizen Allegedly Funneled $500,000 of Illegal Money into US Elections

| Thu Jan. 23, 2014 7:58 AM PST

This week, the FBI and Department of Justice busted a Washington, DC-based political consultant and an ex-detective turned private security contractor in a money-in-politics scandal seemingly ripped from the pages of All the President's Men.

According to a criminal complaint filed in the US district court in southern California, a wealthy Mexican national allegedly funneled more than $500,000 into local and federal campaigns in the San Diego area. That, of course, is illegal. Federal law bars foreign nationals from making contributions to political candidates. So the Mexican businessman—who is unnamed in the complaint—allegedly used retired San Diego detective Ernesto Encinas, political consultant Ravneet Singh, and an unnamed straw donor to inject his money into several California-based elections.

The Mexican businessman and his co-conspirators are accused of making illegal campaign expenditures in support of four different candidates. To support a San Diego mayoral candidate, the Mexican and the ex-detective set up a super-PAC and guided $100,000 in foreign money through a shell corporation into the super-PAC. In another case, the Mexican businessman gave $380,000 to a straw donor (who was identified as an American citizen in the complaint), and the straw donor then cut checks to assorted campaigns and political committees in the San Diego area.

None of the candidates who received the Mexican businessman's support are named in the complaint, but two of them are believed to be San Diego District Attorney Bonnie Dumanis and former mayor Bob Filner. Dumanis and Filner faced each other in the city's 2012 mayoral primary. In December, Filner was sentenced to 90 days in home confinement, three years' probation, and fines totaling nearly $1,500 for assaulting three women while serving as San Diego mayor.

Then there's Ravneet Singh, the DC consultant who founded the company ElectionMall, which provides digital media services for political campaigns. Around February 2012, the Mexican businessman paid Singh and ElectionMall about $100,000 for Internet ads and key word placements to help elect a San Diego mayoral candidate. The money was transferred into ElectionMall's account by a Mexican company, and the online ad spending never appeared on expenditure records as it should have under state and federal campaign laws.

Later that year, in October, Singh and Encinas, the ex-detective, approached a general election candidate in San Diego's mayoral race candidate offering social media services to the candidate's campaign. When asked how much those services would cost, the complaint says, Singh and Encinas responded that it was "taken care of." Soon after, ElectionMall received another $190,000 from the Mexican-based company. Because the candidate's campaign was never billed, the complaint alleges that Singh, ElectionMall, and Encinas "facilitated illegal in-kind contributions" in violation of campaign law.

You can read the full Justice Department complaint against Singh, ElectionMall, and Encinas below. And you can wonder who will play the Mexican businessman, the ex-detective, and the consultant in the movie.

 

Advertise on MotherJones.com

Fallen Foreclosure King David J. Stern Disbarred

| Mon Jan. 13, 2014 10:19 AM PST

The long, legal saga of David J. Stern, the south Florida attorney who made a fortune off the wave of home foreclosures stemming from the housing crisis, has reached its end.

After years of court battles over the practices of Stern's once-mighty, multimillion-dollar law firm, the Florida Supreme Court last week disbarred Stern. As the Palm Beach Post reports, a Palm Beach County judge who refereed Stern's case and who recommended disbarment criticized the 53-year-old lawyer for failing to take responsibility or show "any remorse" for his firm's actions. Mother Jones was one of the first news outlets to expose the shoddy and legally questionable work done by Stern's army of lawyers and paralegals as it foreclosed on hundreds of thousands of Floridians, including backdating crucial documents used to foreclose on homeowners. Nancy Perez, the Palm Beach County judge, said the blame fell on Stern for that shoddy work. "The incidents were not isolated, but rather a representation of the culture of the firm, as to the low level of competence and ethics," Perez wrote. "(Stern) is the lawyer. It was his firm. Mr. Stern is responsible."

Stern's firm, at its peak, was a juggernaut. In the mid and late 2000s, the government-owned enterprises Fannie Mae and Freddie Mac, as well as many of the nation's largest banks, retained Stern's firm to litigate an ever-growing pile of foreclosure cases in Florida, an epicenter of the housing meltdown. At one point, the Law Offices of David J. Stern handled as many as 100,000 foreclosure cases. Stern's firm and others like it were dubbed "foreclosure mills," employing hundreds and even thousands of lawyers and paralegals who pushed through foreclosure cases assembly-line-style. Incredibly, the federal government played a key role in creating foreclosure mills, as I reported:

Fannie and Freddie also reshaped the foreclosure industry. Their huge holdings meant they had to deal with thousands of foreclosures annually—even during time when relatively few loans were going bad. In the 1990s, the market expanded into subprime territory to feed the securitization beast, and borrowers began defaulting at higher rates. Hiring lawyers on a case-by-case basis was burdensome, so Fannie and Freddie put together a stable of law firms willing to litigate large bundles of foreclosures quickly and cheaply. They urged these handpicked firms to bring all foreclosure-related services—inspections, eviction notices, sales of repossessed properties, and so forth—in-house. Thus emerged the foreclosure supermarket.

...Stern's company is one of dozens of mills that now churn through more than a million cases a year for Fannie and Freddie, big banks, and private lenders. Built like industrial assembly lines, the mills employ small armies of paralegals and other low-level employees who mass-produce court filings, run title searches, and schedule scores of hearings and property auctions daily. Staff attorneys appear for dozens of court hearings in rapid succession, dashing from one courtroom to the next with rolling file cabinets. Stern and his ilk typically create in-house subsidiaries that bill the parent law firm for the various paper-pushing tasks. "All sorts of crap is loaded on," notes Irv Ackelsberg, a Philadelphia consumer-law attorney.

The business model is simple: to tear through cases as quickly as possible. (Stern's company handled 70,382 foreclosures in 2009 alone.) This breakneck pace stems from how the mills get paid. Rather than billing hourly, they receive a predetermined flat fee for the foreclosure—typically around $1,000—plus add-ons for all the side services. The more they foreclose, the more they make. As a result, say consumer attorneys and legal experts, even families who have been foreclosed upon illegally—and can afford to make good on their mortgages—end up getting steamrolled. "It's 'How fast can I turn this file?'" says Ira Rheingold, executive director of the National Association of Consumer Advocates in Washington, DC. "For these guys, the law is irrelevant, the process is irrelevant, the substance is irrelevant."

The foreclosure mill model made Stern a very rich man. When I reported on him in August 2010, he lived in a $15 million, 16,000-square-foot mansion on the Atlantic Intracoastal Waterway in Fort Lauderdale. Docked on his property was Misunderstood, his 130-foot, jet-propelled Mangusta yacht—a $20 million-plus replacement for his previous 108-foot Mangusta. He also owned four Ferraris, four Porsches, two Mercedes-Benzes, a Cadillac, and a Bugatti.

But the cavalier, always-be-foreclosing attitude of his firm caught up with Stern. Days after I published my investigation into Stern, then-Florida Attorney General Bill McCollum opened an investigation into his firm and two other foreclosure mills for "allegedly improper actions." Since then, Stern has been in and out of court fighting off lawsuits targeting him and his firm, which has since the vast majority of its business. The news of Stern's disbarment is just the latest blow for the one-time king of the foreclosure business. The state Supreme Court ruling ordered Stern to close his firm within 30 days. 

Stern, for his part, seems to have found a new calling after his foreclosure empire crumbled. He's now an investor in Five Guys burger joint franchises.

Thu Aug. 9, 2012 10:26 AM PDT
Thu Jun. 28, 2012 9:40 AM PDT
Tue Jun. 5, 2012 5:15 PM PDT
Wed May. 23, 2012 2:55 PM PDT
Wed May. 23, 2012 7:52 AM PDT