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Son of US Rep. Chaka Fattah Charged With Fraud, Freed On Bail

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By Tony Hanson and Walt Hunter

PHILADELPHIA (CBS) — Chaka Fattah Jr. is now free after signing his own bond, following his indictment on charges of financial fraud and wrongdoing including filing false tax returns, making false bank statements to get loans, and cheating the Philadelphia School District through inflated invoices from a company he owned that provided educational services.

Chaka Fattah Jr., the son of US representative Chaka Fattah (D-Pa.), turned himself in to federal investigators Tuesday morning.

Fattah Jr. is charged in a federal indictment with multiple counts, in a scheme the indictment says was intended to defraud banks and the IRS of hundreds of thousands of dollars.

He is charged with bank fraud, making false statements to obtain loans, making false statements to settle loans, and income tax evasion, as well as wire fraud and theft from the Philadelphia School District, which had received federal funds.

Authorities say he held himself out as owner and founder of a number entrepreneurial enterprises and used funds from business lines of credit for personal expenses including car payments, food, jewelry, restaurant and club expenses, utilities, clothing, electronics, retail purchases, and charitable donations.

One of the indictment’s introduction paragraphs states that Fattah Jr. obtained a $50,000 line of credit for a company he owns, 259 Strategies, intended to be used for “working capital to support business operations,” but only days after the loan was approved Fattah Jr. spent $17,500 of that to pay gambling debts at SugarHouse casino.

The indictment was unsealed early this morning.   Fattah Jr. made his initial appearance in court later in the day.  He did not enter a plea and was released on bail pending his next hearing.

Fattah Jr.’s properties were raided by federal authorities back in 2012.  He filed a suit against the government in connection with allegations against him earlier this year.

“I am innocent,” Fattah Jr. told reporters shortly after leaving the Federal Courthouse where he had surrendered on the charges early Tuesday morning.

Fattah Jr. called the prosecution “political”, his father, Congressman Chaka Fattah, saying, in an emailed statement he had “concerns about the administration of justice” in the case. The Congressman also stated he believed his son would “clear his name”.

Congressman Fattah released the following statement about the allegations against his son:

“Assistant United States Attorney Paul L. Gray and FBI Special Agent Richard J. Haag and their involvement in the charging of my son raise concerns about the fair administration of justice in this case. With these charges we have now moved from speculation to specific allegations. This will bring the matter closer to a day in which my son can defend himself in court and I am confident the facts will clear his name. I have full confidence in my son; I love him and stand by him today and every day.”

Fattah Jr. says he knows his father fully supports him, and when asked if he were concerned about his father not attending his first court appearance, replied that his father was busy with constituents’ needs.

The Philadelphia School District also issued a statement that reads, in part, “if these allegations prove to be true, we are very troubled that vendors would take advantage of the School District and its students particularly in such difficult financial times.”

 

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