La. State Senator Indicted in Relation to Insurance Fraud Case

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A federal grand jury on April 10 indicted a Louisiana state senator on charges he conspired to launder money for a convicted felon accused of operating an illegal insurance business.

Derrick Shepherd, a lawyer from the New Orleans suburb of Marrero, allegedly conspired with the unlicensed bond broker to launder roughly $2 million in fake construction bond fees, federal prosecutors alleged.

U.S. Attorney Jim Letten announced the indictment.

Shepherd, a Democrat who ran an unsuccessful congressional campaign in 2006, has claimed he was targeted because he couldn’t help the FBI build corruption cases against other public officials. He denied wrongdoing but gave up his post as a legislative committee chairman.

The allegations surfaced last year after voters elected him to a second term. Shepherd ran for Congress in 2006 but finished third in a primary challenge to U.S. Rep. William Jefferson, D-La., who is accused of using his congressional office to leverage bribes and business deals from companies seeking to do business in Africa. Jefferson has pleaded not guilty in the case.

Shepherd is charged with one count of conspiracy to commit mail and wire fraud, three counts of mail fraud, and one count of conspiracy to commit money laundering. The first charge carries a maximum of five years in prison. Each of the other counts is punishable by up to 20 years in prison.

The broker, Gwendolyn Joseph Moyo, was indicted in October on charges she illegally sold insurance. She allegedly sold construction bonds despite federal convictions dating back to 1989 that barred her from working in the insurance business.

The current 41-count indictment includes new charges against Moyo, as well as charges against James Zoucha of Oceanside, Calif. Also named in the indictment were two Nevada corporations controlled by Moyo, AA Communications Inc. and Capital Management Asset Group.

Letten said Zoucha helped conceal Moyo’s operation of the bonding business. Moyo allegedly sold worthless bonds to contractors, leaving them uninsured.

The indictment says Shepherd was acting on a referral by an unidentified public official when he deposited bond premiums in his accounts for Moyo, after state regulators seized her corporate bank accounts. Shepherd only returned a portion of the bond premiums to Moyo, the indictment said.

Shepherd also allegedly created false bills and time records to conceal the money laundering scheme, the indictment said.

The indictment identifies the unnamed “Public Official ‘A'” as a political rival of Shepherd’s. The indictment also says “Public Official ‘B'” — a family member of the other unnamed public official — helped Moyo launder money.