Email, bank statement can touch off federal investigation
Allegations of local police misusing local money might not sound like a federal crime, but if a check or document went through the mail or crossed state lines electronically, the U.S. Attorney's Office has a way to prosecute it, legal experts say.
“It's relatively easy to get federal jurisdiction,” said Thomas J. Farrell, a private lawyer who served as both a federal public defender and a federal prosecutor. As an assistant U.S. Attorney in Pittsburgh, he prosecuted financial crimes and public corruption cases.
Federal officials won't say what they're looking at in their investigation of Pittsburgh police that prompted this week's ouster of Chief Nate Harper. But Deputy Chief Paul Donaldson said the FBI's search of police headquarters last week targeted the personnel and finance and special events offices, focusing on how officials spent money the city collects from businesses that hire off-duty officers.
Authorities are looking at whether city money improperly went to at least two accounts at the Greater Pittsburgh Police Federal Credit Union, and spending from those accounts.
Farrell said although he doesn't know details of the FBI's investigation, a check or bank statement connected to a fraud opens the door for federal investigation if either of those items were sent through the mail. Wire fraud is a tougher connection to make since the communication then has to cross state lines, but emails often pass through servers in other states, even when they're sent between locations in the same state, Farrell said.
Top police officials said they did not know that debit cards from the credit union accounts were issued in their names. Credit union officials said the chief's office opened the accounts.
Harper denied wrongdoing through his attorney.
Mayor Luke Ravenstahl said he spoke with FBI agents and the U.S. Attorney's Office, and they told him he's not a target of the investigation.
Donaldson, acting Chief Regina McDonald and City Controller Michael Lamb also said they spoke with federal authorities.
Investigators are following the money, Lamb said.
Businesses employing off-duty police officers pay the officers' wages, which amount to about $40 per hour, plus a $3.85-per-hour administration fee. McDonald has said wages totaled about $6 million annually, and the administration fee has averaged about $700,000 since it was created in 2007.
McDonald said the fee was created to pay for such things as legal fees, equipment damage and medical bills for situations occurring during off-duty details.
Lamb said businesses send checks to the police department, which forwards them to the finance department. The finance department, he said, deposits them in an authorized account and sends deposit slips and copies of the checks to his office.
Lamb said the finance department directed his office to list the money as reimbursement for officer overtime, when the $3.85 fee should have been listed as revenue to the city.
“What we know is that for the last six years they have been misrepresenting that revenue to us and telling us it was premium pay when in fact it was general city revenue,” Lamb said. “I have reported that to the federal authorities.”
University of Pittsburgh law professor David Harris said that if there was some kind of fraud committed, either with the accounts or the debit cards, it's likely the fraud included the use of the Internet or the mail and apparently involved accounts at a federal credit union.
“The bottom line is that the most likely way it gets into federal court is through these (mail and wire) fraud statutes,” Harris said. “That's how virtually all local fraud cases end up in federal court.”