DISCLAIMER: All persons are presumed innocent until proven guilty.
NEW ORLEANS (WGNO) — Former Louisiana State Senator Karen Carter Peterson has been formally charged for her alleged role in a 7-year-long scheme to steal campaign funds. Sen. Peterson is being charged with one count of felony wire fraud.
On July 14, WGNO received Federal Court documents detailing the means by which the Senator defrauded contributors to the Karen Carter Peterson Campaign Fund. According to these documents, the crimes took place between 2010 and 2022 while she was serving as a Louisiana State Senator for the 5th District and as Chair of the Louisiana Democratic Party.
Reports show that Sen. Peterson accepted monetary donations to the Karen Carter Peterson Campaign Fund (KCPCF) with donors believing that the funds would be used to aid in the re-election campaign for Peterson’s position as State Senator. But according to court documents, Sen. 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 contributors to the KCPCF by means of materially false and fraudulent representations and promises for nearly seven (7) years.”
Senator Peterson is said to have used the funds “to pay for personal expenses unrelated to her campaign or the holding of public office, including to pay gambling-related expenses, and, in the course of soliciting additional contributions, failed to disclose to potential contributors that Peterson had already used funds contributed to the KCPCF for her personal benefit.”
In a post on her Twitter Page, Sen. Peterson issued an apology, citing her gambling addiction as the root of her crimes.
“Today marks an important step in my life-long recovery as I continue to address my gambling addiction. I sincerely apologize for the impact from my compulsive behavior resulting from this addiction. I have made full repayment of funds used as a result of my addiction and I will continue to make amends. Staying true to the steps of my ongoing recovery, I have been forthright, honest, and fully cooperative with the US Attorneys’ Office in their investigation.”
Sen. Peterson allegedly diverted funds received from both individual and corporate donors. Court documents show that Sen. Peterson wrote checks from the KCPCF account to her friends and associates. She then directed them to cash the checks, and give most or all of the proceeds to her.
The Louisiana Democratic Party released a statement on the newly filed charges, noting that Sen. Peterson has signed a plea deal and that they “are confident that any wrongdoings will be brought to justice.”
“When I ran for chair two years ago, I heard the call for a complete overhaul of the Louisiana Democratic Party loud and clear from the people of Louisiana, and that’s what we’ve done,” said Party Chair Katie Bernhardt.
“Since September of 2020, we have worked tirelessly to increase transparency and transform operations to turn this into an organization that will stand the test of time. Restitution has been made on behalf of Senator Peterson, which allows us to close that chapter of the Louisiana Democratic Party as we work to restore public trust and move into a more promising future. We are proud of the progress we have made so far, and we believe we are well on our way to becoming the Democratic Party that Louisiana deserves.”
Court documents also state that Sen. Peterson “caused the public filing of false and misleading campaign finance reports that mischaracterized expenditures as being for legitimate purposes related to her campaign or the holding of public office, but were, in fact, unrelated to such purposes and, instead, were diverted to Peterson’s personal use.”
Additionally, records show that in her role as Chair of the Louisiana Democratic Party, formally documented as “State Political Party A,” Senator Peterson “exploited her position to choose entities (“ Companies”) operated by her associates, purportedly to provide campaign-related services to State Political Party A, and to determine the amount that Party A would pay each of the Companies.” However, these Companies provided either no or minimal services for State Political Party A. Sen. Peterson is said to have then directed the Companies to surrender to her a portion of the funds paid to them by State Political Party A.
If convicted on this felony charge, Senator Peterson faces a maximum sentence of 20 years in prison, up to three years of supervised release after imprisonment, a mandatory $100 special assessment fee, and a fine of up to $250,000.
Sen. Peterson’s arraignment is set for August 1, 2022 in New Orleans.