The treasurer of an ill-fated 2021 campaign for Brooklyn borough president was charged Wednesday with organizing a fraudulent donation scheme in an attempt to access at least $400,000 in public matching funds.
Federal prosecutors said the treasurer, Erlene King, 71, had sent thousands of dollars to associates over roughly two and a half years in an effort to skirt campaign finance rules and boost the campaign of Anthony Jones, who would go on to lose the election after receiving roughly 3 percent of the vote. Mr. Jones has not been accused of wrongdoing.
Ms. King pleaded not guilty to wire fraud in federal court on Wednesday after she opted to waive her right to have the charges presented to a grand jury.
A lawyer representing Ms. King, John S. Wallenstein, said that he and his client were “discussing potential resolutions” with prosecutors. If found guilty, Ms. King could face up to 20 years in prison.
New York City’s public campaign financing program provides funds for campaigns that meet certain fund-raising thresholds. During the 2021 campaign for Brooklyn borough president, the Campaign Finance Board offered to pay campaigns up to $8 for every $1 raised, but only if a campaign first received donations from a minimum number of contributors and raised a total of $50,000 in eligible contributions on its own.
In an effort to meet that threshold, Ms. King organized at least $25,000 in fraudulent contributions to Mr. Jones’s campaign, according to prosecutors with the U.S. attorney’s office for the Eastern District of New York. Donations that do not originate with the person whose name appears on fund-raising records are often called “straw” donations.
Prosecutors said that Ms. King sent money via Cash App to intermediaries — who are not identified in the criminal complaint — with instructions about how to distribute the money and divert it back to the campaign in increments of $175, the maximum donation that the Campaign Finance Board would match.
Those individuals then sent payments of varying amounts to other people and told them to make donations to Mr. Jones’s campaign, prosecutors said. One of the intermediaries to whom Ms. King sent $1,000 gave specific instructions to someone else in an Instagram message three days later, writing, “I need to contribute to this guy’s election” but “I can’t directly contribute,” and adding that it “would help me out a lot” if the recipient of the message donated on the person’s behalf. The next day, the intermediary sent $175 to the straw donor, who donated it to the campaign, the complaint said.
Ms. King’s scheme was unsuccessful, prosecutors said. When the Campaign Finance Board requested additional information about the donations, Ms. King sent letters to the board “that falsely attested that the listed donors contributed to the campaign,” according to the complaint. Ms. King also directed other members of the campaign staff to submit paperwork to the board listing as donors people who had never donated to the campaign, prosecutors said. The board did not provide matching funds.
Campaign finance records show that, by the end of the race, Mr. Jones’s campaign had raised a total of $83,351 but had spent nearly 10 times as much. Years later, the campaign’s outstanding debt is more than $723,000.
Mr. Jones ultimately lost twice to Antonio Reynoso: first in the Democratic primary, in which he finished eighth, and again in the general election after he ran a third-party campaign that earned less than 3 percent of votes.
Tim Hunter, a spokesman for the Campaign Finance Board, said in a statement that the board was cooperating with law enforcement in the investigation.
“While the committee involved in this investigation did not receive public funds and the audit is still ongoing, we applaud the Eastern District of New York for their efforts to safeguard the integrity of our local democracy by ensuring that criminal schemes like the one alleged today are uncovered,” Mr. Hunter wrote.
In addition to his unsuccessful campaign for borough president, Mr. Jones has run for State Assembly twice, in 2014 and 2022.
This is not the first time Mr. Jones has been associated with fraud allegations. In 2022, while he was serving as a Democratic district leader in Brooklyn, several residents said their signatures had been forged on filings that sought to remove local Democratic Party leaders from office. Mr. Jones acknowledged to the online news outlet The City that the signatures in question had come from within his Democratic club, though he said he did not know who had filled out the forms, and blamed political adversaries.
Ms. King herself ran for City Council as a Democrat in 2009 and again in 2013 on a third-party ballot line, “Rent Is 2 Damn High.” In 2013 she earned just 210 votes and lost to Jumaane Williams, the Democrat who now serves as the city’s public advocate.
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