Bob McDonnell indictment

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    IN TH E UNITED S TA TE S D IS TR IC T C O U RTFO R T H E E A ST ER N DISTRICT O F V IR GIN IA

    UNITED S TA TE S O F A M E R I C A

    R O B E R T F. M C D O N N E L L Counts 1-13)and

    MAUREEN G. MCDONNELL, Counts 1-11,13-14)Defendants .

    R i chmond Division

    N o . 3:14cr wCount 1: 18 U.S.C. 1349Conspiracy to Commit Honest-Services Wire FraudCounts 2-4: 18 U.S.C. 1343 Honest-Services Wire Fraud)Count 5: 18 U.S .C. 1951 Conspiracy to Obtain Propertyunder Color of Official Right)Counts 6-11: 18 U.S.C. 1951 Obtaining Property under Colorof Official Right)Counts 12-13: 18 U.S.C. 1014False Statements)Count 14: 18 U.S.C. 1512 c 2Obstruction o f Official

    Proceeding)For fe i ture N o t i c e

    January 2014 Term - at Richmond, VirginiaIN D IC TM E N T

    THE GRAND JURY CHARGES THAT:At all times relevant to this Indictment, unless otherwise stated:

    Gen e r a l A l l e g a ti o n s

    A The Defendants

    1. Defendant ROBERT F. MCDONNELL wa s th e Governor o f th e Commonweal thof Virginia. He previously served as a member of the Virginia House of Delegates and as the

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    Attorney General of Virginia. ROBERT MCDONNELL was sworn in as the71st Governor ofVirginia in January 2010.

    2. Defendant MAUREEN G. MCDONNELL was th e wife o f ROBERTMCDONNELL and served as the First Lady of Virginia.B . Relevant I n d iv id u a ls a n d E n ti ti es

    3. MoBo Real Estate Partners, LLC ( MoBo ) was a Virginia limited liabilitycompany engaged in the business of owning and renting vacation homes in Virginia Beach,Virginia. ROBERT MCDONNELL was one of two members of, and had a 50% personalfinancial interest in, MoBo.

    4. Star Scientific, Inc. ( Star Scientific ) was a Delaware corporation with itsprincipal executive offices located in Glen Allen, Virginia. Star Scientific was a publicly tradedcompany on the NASDAQ Global Market under the ticker symbol STSI. Star Scientific wasinvolved in and it s activities affected interstate commerce.

    5. JW was th e Chief Executive Officer o f Star Scientific.C . The G o vern o r a nd the G o v e r n o r s Office

    6. The Governor and the Office of the Governor of the Commonwealth of Virginia( OGV ) performed a wide range of official actions. Those actions included, among otherthings, appointing directors and key administrators of state departments, agencies, and boards;authorizing expenditures of certain grant funds; proposing a budget and overseeing theexpenditure of state funds; conducting meetings and hosting events for the purposes of fosteringVirginia business and economic development; directing other government officials to conductsuch meetings and events; speaking at events in and outside Virginia about Virginia businessesand economic development; coordinating with state boards, commissions, and institutions,

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    including universities, about uses of state labor and funding resources; and otherwise settingpriorities and direction for the Commonwealth of Virginia.

    7. Throughout his campaign for Governor, ROBERT MCDONNELL made it clearthat one of his highest priorities as Governor would be acting to promote the matter and cause ofeconomic development for businesses and industries in Virginia, e g his campaign slogan wasBob's for Jobs. Throughout his tenure as Governor, ROBERT MCDONNELL customarilyperformedofficial actions to promote the matterand cause of economic developmentof Virginiabusinesses and industries, and he touted his efforts and activities in support of the same.D. Background o f S ta r Scient i f ic 's Dietary Supplement Products

    8. Star Scientific described itselfas a technology-oriented company with a missionto promote maintenance of a healthy metabolism and lifestyle. Beginning in or about 2007, thecompany focused on utilizing certain alkaloids in the tobacco plant, namely anatabine, to addressissues related to the desire to smoke. Star Scientific subsequently began evaluating anatabine'spotential for treating chronic inflammation that the company believed might be associated withdisorders such as thyroiditis, diabetes, arthritis, Alzheimer's disease, and multiple sclerosis.

    9. Star Scientific, through a wholly owned subsidiary, engaged in the development,manufacture, marketing, and sale of two anatabine-based dietary supplements: CigRx, atobacco alternative; and Anatabloc, for anti-inflammatory support.

    10. The types of claims that Star Scientific could make under applicable federal law

    regarding its dietary supplements CigRx and Anatabloc differed substantially from thoseallowed for drug manufacturers. While drug manufacturers could claim that their productswould diagnose, cure, mitigate, treat, or prevent a disease, dietary supplement manufacturerssuch as Star Scientific were legally prohibited from making such claims. These legal limitations

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    made itmore challenging for Star Scientific to gain widespread consumer acceptanceof thepotential health benefits for its dietary supplement products.

    11. Toovercome the difficulties in gaining consumer acceptance for its products, StarScientific sought to legitimizethe potential health benefitsof its dietary supplements byencouraging scientific studies of anatabine, which wasan active ingredient inCigRx andAnatabloc. Star Scientific would then present the results of those studies to physicians in thehope thatthe physicians would recommend StarScientific's dietary supplements to theirpatients.

    12. Anotherof Star Scientific's goals was to havescientific studies of human use ofanatabine, including in clinical trials,that would allow the company to develop drugsfor thetreatment of diseases such as thyroiditis, diabetes, arthritis, Alzheimer'sdisease, andmultiplesclerosis.E. Background o f the De fendants Relationship with JW

    13. In or about March 2009, as a result of requests from ROBERT MCDONNELL'Sstaffto JW, ROBERT MCDONNELL began using a jet aircraftowned byJWduringhiscampaign forGovernor of Virginia. Priorto this time, ROBERT MCDONNELL and JWhadnever met, and they had no personal or professionalrelationship.

    14. On or about November 3,2009, ROBERT MCDONNELL was elected Governorof Virginia. While ROBERT MCDONNELL and JWhadmet brieflyduring thecampaign as aresult of ROBERTMCDONNELL'Suse of JW's aircraft, they had no personal relationshipandweremerely professional acquaintances at the time that ROBERT MCDONNELL becameGovernor-Elect .

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    15. In or about December 2009, ROBERT MCDONNELL attended a political eventat the Four Seasons Hotel in New York City. As a result of a request by JW to one of ROBERTMCDONNELL'S staff, JW met with ROBERT MCDONNELL and MAUREEN MCDONNELLat the Four Seasons Hotel. During the meeting, MAUREEN MCDONNELL asked for assistancein finding a designer dress for her husband's upcoming inauguration as Governor, and JW agreedto help. MAUREEN MCDONNELL subsequently informed JE, one of ROBERTMCDONNELL'S senior staffmembers, that JW had agreed to purchase a designer dress byOscar de la Renta for MAUREEN MCDONNELL for the inauguration. JE expressed concernsregarding the prospect of JW purchasing MAUREEN MCDONNELL'S inaugural dress andultimately informed her that JW's purchase of a designer dress for the inauguration would beinappropriate and should not be done. As a result, MAUREEN MCDONNELL became upsetwit h JE.

    16. On or about December 21,2009, MAUREEN MCDONNELL sent an email to JE ,stating:

    1need to talk to you about Inaugural clothing budget. 1need answers and Bob isscreaming about the thousands I'm charging up in credit card debt. We are broke,have an unconscionable amount in credit card debt already, and this Inaugural iskilling us I need answers and I need help, and I need to get this done.MAUREEN MCDONNELL subsequently told JW that she could not accept the dress at that timebut that she would t ak e a r a in c h ec k from him.

    17. On or about October 3, 2010, JW agreed to let ROBERT MCDONNELL useJW's aircraft to fly from Richmond, Virginia, to Sacramento, California, for a political event.JW met ROBERT MCDONNNELL in Sacramento, California, and accompanied him on thereturn flights to Richmond. JW used the trip as an opportunity to discuss Star Scientific'sproducts directly with ROBERT MCDONNELL. During the return flights, JW informed

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    ROBERT MCDONNELL of the significant potential health benefits of anatabine and the needfor scientific studies of these potential health benefits. JW told ROBERT MCDONNELL thatStar Scientific needed the assistance of the Virginia government, and ROBERT MCDONNELLtold JW that he would put JW in contact with the Virginia Secretary of Health and HumanResources (the Virginia Secretary of Health ).

    18. On or about October 12, 2010, an OGV staff member emailed the VirginiaSecretary of Health and attached a copy of a press release that had been forwarded by JW'sassistant. The press release announced the beginningof clinical trials of anatabine (also referredto as RCP-006, a compoundwhose active ingredient is anatabine) for the treatment ofAlzheimer's disease. In the email, the OGV staff member stated, [T]he Governor would likeyou to review the attached. I am sending the original note up to you today.

    19. On or about November 4,2010, JW met with the Virginia Secretary of Health todiscuss StarScientific'sproducts. The meeting had beenpreviously arranged byan OGV staffmember. During the meeting, JWdiscussed the potential health benefits of Star Scientific'sproducts. The Virginia Secretaryof Healthwas skeptical regarding JW's claims because StarScientific's products hadnot been scientifically proven to be effective. JW requested that theVirginia SecretaryofHealth visit the Roskamp Institute, a Florida-based research group that hadfinancial ties to Star Scientific and had begun scientific studies of anatabine. The VirginiaSecretaryof Health ultimately rejected JW's invitation to visit the Roskamp Institute.

    20. On or about February 3, 2011, Star Scientific invited doctors and healthprofessionals to a seminar dinner at the Jefferson Hotel in Richmond, Virginia, for its CigRxproduct. The dinner was part of Star Scientific's marketing strategy of gaining consumeracceptance by convincing doctors and health professionals to recommend CigRx to their

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    patients. On the day of the dinner, JW contacted one of the OGV staffmembers and requestedthat ROBERT MCDONNELL come to the CigRx event and address the attendees. Thatevening, both ROBERT MCDONNELL and MAUREEN MCDONNELL came to the event atthe Jefferson Hotel. ROBERT MCDONNELL made brief remarks in support of Star Scientificto thedoctors andhealth professionals in attendance. StarScientific subsequently received theOGV's approval to put pictures ofROBERT MCDONNELL speaking at the CigRx event onthe company's Facebook and Twitter social media sites.

    21. As of in or about 2009 and continuing through 2012, MoBo's two Virginia Beachproperties required capital infusions of up to $60,000 annually to meetmortgage payments andother expenses. MoBoreliedon loans, including those from familyand friends, to make up thedifference. MoBoexploredthe possibility of selling the two propertieswithoutsuccess as theirvalues weredeclining. MoBoalso began to explore refinancing the heavily leveraged properties.F. The S ch em e

    22. As set forth in greater detail below, from in or about April 2011 through in orabout March 2013, the defendants participated in a scheme to use ROBERT MCDONNELL'Sofficial position as the Governor of Virginia to enrich the defendants and their family membersby soliciting and obtaining payments, loans, gifts, and other things ofvalue from JW and StarScientific in exchange for ROBERT MCDONNELL and the OGV performing official actions onan as-needed basis, as opportunities arose, to legitimize, promote, and obtain research studies for

    Star Scientific's products, including Anatabloc. And asalso detailed below, the defendantstook steps throughout that time to conceal the scheme.

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    23. On or about April 11, 2011, MAUREEN MCDONNELL contacted JW andrequested that he take her shopping inNew York City for the designer dress by Oscar de laRenta. MAUREEN MCDONNELLexplained that she and ROBERT MCDONNELLwereattending a political event at the Union LeagueClub inNew York City on April 13,2011, andt ha t she would ensur e that JW was sea ted next to ROBERT MCDONNELL at th e event. JWagreed to pay for the shopping trip.

    24. Onor aboutApril 13,2011, JW accompanied MAUREEN MCDONNELL toseveral luxury stores inNew YorkCity, including Oscarde laRenta, LouisVuitton, andBergdorfGoodman. MAUREEN MCDONNELL informed JW that she needed dresses andaccessories for herdaughter's upcoming wedding and for her and ROBERT MCDONNELL'Supcoming anniversary party. JWpaid fortheentire luxury shopping trip forMAUREENMCDONNELL and spent approximately $10,999 atOscarde laRenta, approximately $5,685 atLouisVuitton, andapproximately $2,604at BergdorfGoodman. As promised byMAUREENMCDONNELL,JW was seated next to ROBERTMCDONNELL at the Union League Clubevent later that evening.

    25. Onor about April 29, 2011, JWand his wife attended a privatedinner at theGovernor's Mansion with ROBERT MCDONNELL and MAUREEN MCDONNELL. Duringthe dinner, JWandhiswifediscussed Star Scientific's productswith the defendants. Duringthedinner, JW and his wife met CM, one of the defendants' daughters. JW and his wife had notpreviouslymet CM, who they learned was getting married in June 2011.

    26. On or about May 2, 2011, JW had a private meeting with MAUREENMCDONNELL at the Governor's Mansion. During the meeting, MAUREEN MCDONNELLinformed JW that she and ROBERT MCDONNELL were having severe financial difficulties.

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    MAUREEN MCDONNELL asked JW for a $50,000 loan. MAUREEN MCDONNELL alsotold JW that she could help Star Scientific but that she needed JW's financial assistance.

    27 . MAUREEN MCDONNELL also informed JW that she an d ROBERTMCDONNELL did not know how they were going to pay for their daughter's upcomingwedding expenses, and she asked for JW's assistance. JW asked how much money was needed,and MAUREEN MCDONNELL responded that $15,000 was needed to pay the remainingcatering costs.

    28. Beforeagreeing to provide the requested financial assistanceto the defendants,JW spoke directlywith ROBERTMCDONNELLabout the $50,000 loan. In that conversation,ROBERTMCDONNELL explained the defendants' financialdifficulties. ROBERTMCDONNELL informed JW that the rental income from the defendants' rental properties inVirginia Beachwasnotcovering thebills from those properties. JW agreedto provide the$50,000 loanwitha two-year termat 5% interest. JWalso informed ROBERTMCDONNELLthat loan paperwork was not necessary.

    29. On or about May 9, 2011, an OGVstaff member sent an email to the VirginiaSecretary of Health stating:

    The Governor said that he sent you some material on the RosKamp Institute(http://www.rfdn.org/) and that you were going to get back to him regarding yourthoughts on the organization. Have you had a chance to look at that yet? If so,could you let me knowyour thoughts? Weare currently evaluating having theGovernor go down to Florida to speak to this group and wanted to get yourfeedbackprior to moving forward on this.The Virginia Secretary of Health sent a response email stating [h]e mentioned this to meon Thursday so I have not gotten to it yet. How soon do you need to make a decision?The OGV staff member responded via email that [t]he person inviting the Governor is agood friend so I would like to be as responsive as possible.

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    30. On or about May 9,2011, an OGV staff member sent an email to JW's assistantstating:

    I spoke with the Governor regarding flying down to speak to the RosKampinstituteon June 1st. Unfortunately,after checkingwith his daughter (she isgetting married that Saturday) he doesn't believe hewill be able to attend duetosome Dad commitments that day. I'm so sorry this won't work out What elsecan we do to fi x this?31. Onor about May 17,2011, MAUREEN MCDONNELL entereda calendarevent

    on her electronic calendar for her attendance at the June 1,2011, Star Scientific event at theRoskamp Institute in Florida.

    32. Onor aboutMay23,2011, JW instructed his assistant towritetwo checks: (a) a$50,000 check(No. 1001) made payable to MAUREEN MCDONNELL; and(b)a $15,000check(No. 1002) made payable in blank with a memo annotation of wedding gift. On orabout May 23,2011, JW also visited MAUREEN MCDONNELL at theGovernor's Mansionand gave her the two checks.

    33. Onor about May25,2011,MAUREEN MCDONNELL deposited the $50,000check (No. 1001) intoherpersonal bank account (No. xxxx4417) at Wells Fargo Bank (d/b/aWachovia Bank). Priorto thatdeposit, MAUREEN MCDONNELL'S personal bankaccount hadan available balance of approximately $4,798.

    34. Between on or about May 25, 2011, and on or about May 31,2011, MAUREENMCDONNELL madethe following paymentsfrom her Wells FargoBank (d/b/aWachoviaBank) account (No.xxxx4417): (a) a $10,638.83 payment to Pentagon Federal CreditUnion( PenFed ) for a credit card held solely in the nameof ROBERTMCDONNELL; (b) a $9,900paymentto Bankof America for a credit cardheldjointly in bothdefendants' names;and (c) a$1,500 payment to MoBo.

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    35. On or about May 26, 2011, the catering company for CM's wedding cashed the$15,000 check referenced above (No. 1002). On or about December 29, 2010, ROBERTMCDONNELL had signed the contract with the catering company for CM's wedding and hadmade two payments totaling $7,948.50 in December 2010 and January 2011 as deposits on thatcontract. On or about June 13,2011, after CM's wedding, the catering company refunded$5,266.50 via check to MAUREEN MCDONNELL. MAUREEN MCDONNELL caused therefund check to be deposited into her Wells Fargo Bank (d/b/a Wachovia Bank) account (No.xxxx4417) on or about June 21,2011.

    36. On or about May 28, 2011, ROBERT MCDONNELL sent an email to JW statingThanks so much for all your help with my family. Your very generous gift to [CM] was mostappreciated as well as the golf round tomorrow for the boys. Maureen is excited about the trip tofla to learnmoreabout the products and to see [JW's wife]. Have a restful weekend withyourfamily. Thanks.

    37. On or about May 29,2011, ROBERT MCDONNELL, his two sons, and hisfuture son-in-law played golf at Kinloch GolfClub ( Kinloch ), an exclusive private golf coursein Manakin-Sabot, Virginia. JW was a member at Kinloch and had agreed to pay for ROBERTMCDONNELL and his family's golf outing there even though JW would not be playing withthem. During the round of golf, ROBERT MCDONNELL and his family charged approximately$2,380 to JW's Kinloch member account, including approximately $1,200 in greens fees, $500

    in caddie fees, $410 in merchandise at the pro shop, and $270 in food and beverages.38. On or about June 1, 2011, MAUREEN MCDONNELL opened a brokerage

    account at Brokerage Firm A.

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    39. On or about June 1, 2011, MAUREEN MCDONNELL purchased 6,000 shares ofStar Scientificstock in her newly opened Brokerage Firm A account. To pay for the purchase,MAUREEN MCDONNELL wrote a check from her Wells Fargo Bank (d/b/a Wachovia Bank)account (No. xxxx4417) for approximately $31,079.

    40. On or about June 1,2011, MAUREEN MCDONNELL and her Chiefof Staff, aVirginia government employee, traveled on JW's private aircraft to Star Scientific'sevent at theRoskamp Institute in Sarasota, Florida. MAUREEN MCDONNELL spokeat theevent,whichwasheavilyattended by Star Scientific's investors, andannouncedthat she wasoffering theGovernor's Mansion for the location ofStar Scientific's official product launchof Anatabloc .

    41. On or about June 16,2011, JW's assistant emailed an attached letter dated thatsamedaytoMAUREEN MCDONNELL'S Chiefof Staff. The letter was from JW,addressed toROBERT MCDONNELL, and stated, in part:

    The particular intent of this letter isto provide the Commonwealth of Virginiawith a technology platform to lower healthcare costs.I am suggesting thatyou usethe attached protocol to initiate the 'VirginiaStudy'of Anatabloc at the Medical CollegeofVirginia and the Universityof VirginiaSchool of Medicine, with an emphasis on endocrinology, cardiology,osteoarthritis and gastroenterology.This landmark studywill providethe data for an evaluationof the economicimpact of Anatabloc inhealthcare, and ifweare rightthen I believe that theresults of the Virginia study will havea major impact on reducing healthcarecostsfor Virginia.

    MAUREEN MCDONNELL'S Chiefof Staffsubsequently forwarded the letter by email toMAUREEN MCDONNELL .

    42. In or about early July 2011, Star Scientific began exploring possible fundingsources for scientific studies atVirginia research universities ofAnatabloc's potential healthbenefits. In particular, Star Scientificwas interested inobtaining grant funding from the Virginia

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    Tobacco Indemnification and Community Revitalization Commission ( Tobacco Commission ),which provides grants for the promotion of economic growth and development in tobacco-dependent communities using proceeds of the national tobacco settlement. It was important toStar Scientific that these studies not be funded by the company for two primary reasons: (a) thestudies would be very expensive and would strain Star Scientific's finances, and (b) having third-party funding would enhance the perceived legitimacy of the results of the studies in thescientific community.

    43. The Tobacco Commission would not provide grants to for-profit entities.Therefore, Star Scientific developed a plan to encourageVirginia state research universities e gthe University of Virginia ( UVa )and Virginia Commonwealth University ( VCU, formerlyMedical CollegeofVirginia ( MCV ))) to apply to the Tobacco Commission for grants toperform scientific researchofanatabine, the main active ingredient in the company's products.

    44. Inor aboutearly July 2011, to effectuate its plan, Star Scientific beganreachingout to scientific researchers at Virginia state universities. In addition to informing theseresearchersabout the preliminary scientific results that indicated that anatabine might havehealth benefits for the treatment of various medical conditions, Star Scientific informed theVirginia state researchers that ROBERT MCDONNELL and MAUREEN MCDONNELLsupported the researchof the company's products and that the Tobacco Commissionwas apotential source of grant funding for the research.

    45. On or about July 23, 2011, Star Scientific held a symposium at Gibson Island,Maryland, to discuss potential scientific studies of anatabine. The company invited researchersfrom UVa and VCU to attend the symposium to learn more about these studies and potentialresearch funding from theTobacco Commission. In addition, MAUREEN MCDONNELL'S

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    the research scientists at the Virginia universities would get small planning grants to develop testprotocols so that large grant proposals could be submitted to the Tobacco Commission. InMAUREEN MCDONNELL'S presence, JW told the policy advisor that he anticipated TobaccoCommission funding for these studies and that he had discussed this with ROBERTMCDONNELL. In addition, JW discussed the idea of having Virginia government employeesuse Anatabloc as a control group for research studies.

    50. On or about August 1, 2011, MAUREENMCDONNELL also met privately withJW. During themeeting,MAUREEN MCDONNELL noticedJW's watch and asked what brandit was. JW informed her that it was a Rolex. She informed JW that she would like to get one forROBERT MCDONNELL because he would like a Rolex. JWexpressed concern regardingwhether ROBERTMCDONNELLwould actuallywear such a luxurywatch given his role as asenior government official. MAUREEN MCDONNELL told JWthatshewanted JW to buy aRolex forROBERT MCDONNELL. JWsubsequently boughta Rolexfor ROBERTMCDONNELL. When JW contacted MAUREEN MCDONNELL to ask her what she wantedengraved on the watch, MAUREEN MCDONNELL instructed JW to have 7 lsl Governor ofVirginia engraved on the back of the Rolex.

    51. On or aboutAugust 1,2011, MAUREEN MCDONNELL entereda calendarevent on her electronic calendar for her attendanceon August 30,2011, for a Lunch w/ VAresearchers .

    52. On or aboutAugust 1,2011,the seniorpolicy advisor from the VirginiaSecretaryof Health's office who had met with JW and MAUREEN MCDONNELL earlier that day sent anemail to JW. Inthe email, the policy advisorstated that it is necessary for us to make policyrecommendations and decisions offof sound data and that she was grateful that [JW was]

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    making strides to validate the incredible anecdotes and stories that result from your work. Thepolicy advisor concluded the email by stating that she would continue to work alongside of theFirst Lady as we identify how best to move forward.

    53. On or about August 2, 2011, MAUREEN MCDONNELL ordered BrokerageFirm A to purchase an additional 522 shares of Star Scientific stock for her account.

    54. On or about August 4, 2011, MAUREENMCDONNELL sent an email toROBERT MCDONNELL, forwarding a quote from a stock market analyst who covered StarScientific's stock. In the forwarded quote, the stock market analyst stated that [a]s aneconomist, however, I am utterly certain that Anatabloc is going to shake our political system toits very roots. This is because even tiny changes to the actuarial tables will have enormousbudgetary impacts. MAUREEN MCDONNELL annotated the importanceof the email ashigh.

    55. On or about August 5, 2011, MAUREENMCDONNELL sent an email to theabove-referenced stockmarket analyst. Inher email - which was in response to the analystforwarding a favorable article about Star Scientific's Anatabloc - MAUREEN MCDONNELLasked, Would it be possible for you to send this as an attachment like you did in the first emailso I would be able to print out a clean copy for my husband?

    56. On or about August 5,2011, one of the defendants' sons and his friend playedgolf at Kinloch. Even though JWwas not playing with them, they played as JW's guests andcharged approximately $618 to JW's Kinloch member account, including approximately $300 ingreens fees, $100 in caddie fees, and $214 in merchandise at the pro shop.

    57. On or about August 11, 2011, the defendants' two sons and a friend played golfatKinloch. Even though JW was not playing with them, they played as JW's guests and charged

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    approximately$1,309 to JW's Kinloch memberaccount, including approximately $900 in greensfees, $300 in caddie fees, and $109 in food and beverages.

    58. Onor about August 12,2011, MAUREEN MCDONNELL'SChief of Staff askedan OGV staffmember to put a lunch that MAUREEN MCDONNELL was hosting for a numberof researchers and doctors on August 30, 2011, on ROBERT MCDONNELL'S schedule for thatday.

    59. On or about August 13,2011, ROBERTMCDONNELL and one of his sonsplayed golf at Kinloch. Even though JW was not playing with them, they played as JW's guestsand charged approximately $869 to JW's Kinloch member account, including approximately$600 ingreens fees, $200 incaddie fees, $53 inmerchandise at the pro shop, and $16 in food andbeverages.

    60. Onor aboutAugust30,2011, the defendants hostedan event for the launch ofStar Scientific's Anatabloc product at the Governor's Mansion. JW had previously coordinatedthe list of invitees for the event with MAUREEN MCDONNELL and her staff. The inviteesincluded some of t he same UVa and VCU research scientists whom Sta r Scientific wasattempting to convince to perform clinical trials ofAnatabloc. Prior to the event, MAUREENMCDONNELL and JW placed samples ofAnatabloc ateach table setting. On the day of theevent, Star Scientific issued a press release stating, in pertinent part:

    Star Scientific, Inc. (NASDAQ: CIGX) has announced that the company ispleased to initiate the launch today ofAnatabloc, a dietary supplement that isdesigned to support the immune system in maintaining healthy levels ofinflammation.A group of Richmond area physicians and healthcare providers are gathering atthe Virginia Governor's mansion today to learn more about the state of theresearch ofAnatabloc. The lead researchers who have overseen pre-clinicalstudies will discuss the results of testing with this group. They will bejoined byresearchers from the University ofVirginia Medical School and the VCU Medical

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    Center who also are interested in studying further potentials for Anatabloc.[Star Scientific's affiliate] has solicited research proposals from these institutions,and expects to issue planning grants for the preparation of full research proposals.ROBERT MCDONNELL attended the Star Scientific event at th e Governor's Mansion andspoke favorably to the attendees regarding further study of anatabine. During the event, JWpresented $25,000 checks to UVa and VCU research scientists as planning grants to encourageUVa and VCU to prepare full research proposals for scientific studies of anatabine.

    61. On or about September 9,2011, a broker at Brokerage Firm A wrote a letter toMAUREENMCDONNELLoutlining a prior conversation between the two. In thatconversation, MAUREEN MCDONNELL had requested information from the broker regardingways to avoid the Star Scientific shares held in her Brokerage Firm A account remaining in hername. She had informed the broker that she wanted the shares out of her name by the end of theyear inorderto avoid certain annual reporting requirements. Among the optionsthatMAUREEN MCDONNELL had mentioned were gifting the shares to her children or setting up ablind trust. The broker wrote the September 9, 2011, letter to MAUREEN MCDONNELLbecause he was uncomfortable with MAUREEN MCDONNELL'S request that he assist her infinancial transactionsdesigned to avoid annual reporting requirements. In the letter, the brokerstated:

    The 6,522 shares you purchased of Star Scientific, Inc. are currently titled in yournamealone. Myunderstanding is that you would like to gift a portion of theseshares to each of the children, either now or at some point in the future, andpossibly end up with zero shares in your name.I don't have the answer about how to avoid shares remaining in your name,without transferring them to another entity. You had mentioned the use of a blindtrust. If you have an attorney draft the trust, we can open and operate this type ofaccount. However, the blind trust is a discretionary account that we wouldmanage, and you essentially would have nodirection in the purchase or sale ofsecurities. As such, rather than owning shares of Star Scientific, you most likelywould end up with a portfolio ofwell-known large dividend paying companies

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    and bonds. I think this would defeat the purpose, at least for your intent of thisStar Scientific investment.62. On or about October 18,2011, Star Scientific held a dinner at the Westin Hotel in

    Richmond, Virginia, for local area doctors and health care professionals to learn more aboutAnatabloc. MAUREEN MCDONNELL was the featured guest ofthe dinner and spokefavorably regarding Star Scientific and its products.

    63. On or about October 22, 2011, Star Scientific held a dinner at the Warwick HillsGolf& Country Clubin Grand Blanc, Michigan, for local area doctors and health careprofessionals to learn more about Anatabloc. MAUREEN MCDONNELL was the featuredguest of the dinner and spoke favorably regarding Star Scientific and its products. MAUREENMCDONNELL flew to and from the event on JW's private jet. During the flights, MAUREENMCDONNELL, JW, and a research scientist who consulted for Star Scientific discussed thepotential health benefits ofAnatabloc and the need for clinical studies. The next day, theresearch scientist sent MAUREEN MCDONNELL an email summarizing the discussions onboard JW's aircraft. In the email, the research scientist wrote about the lack of data regardingthe numberof peoplewho suffer from autoimmune and chronic inflammatory conditions. Hestated that it would be of value to perform a study ofVirginia government employees todetermine the prevalences [sic] of autoimmune and inflammatory conditions. The researchscientist further stated, Next, to tie in [JW's] anti-inflammatory product, one could add afollow-updata assessment... to assess whether the inflammatory markers screened for at theinitial visit have been decreased in employees who have taken anatabine.

    64. On or about October 24, 2011, MAUREEN MCDONNELL sent a response emailto the research scientist stating [t]hanks for your email and I printed your [sic] it out and shared

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    it with my husband. He said he'd like to talk to some people to look into it and discern what thebest approach for Virginia would be.

    65. During the fall of 2011, Star Scientific was trying to effectuate its plans for thestudies at UVa and VCU by encouraging those state research universities to make grant fundingapplications to theTobaccoCommission for the scientificstudyof anatabine. As partof thateffort, on or about November 29,2011, executives at Star Scientific had a conference call withsenior UVa administrators, who were Virginia government employees. The Star Scientificexecutivesrequested that UVatake the lead roleamong the Virginia researchuniversities inmaking the grantapplications to theTobacco Commission andoverseeing the useof anygrantfunding. The UVa administrators expressed interest butdid not agree to StarScientific'srequests during the call.

    66. UnderVirginia law, certain state officials andemployees - including theGovernorandmembers of his staff- are required to annually file a standardized disclosurestatement of theirpersonal economic interests onorbefore January 15 each year. Thedisclosurestatement is commonly referred to as the Statement of Economic Interest ( SOEI ), and it islegally required tobe filed and maintained as a public record for five years. The SOEI requires astate official to: (a) disclose personal liabilities held by the stateofficial or that official'simmediate family members of morethan$10,000 to anyone creditor, and to statetheprincipalbusinessor occupation foreachof those creditors; (b) disclose securitiesheld by the stateofficialor that official's immediate familymembers valued in excess of $10,000 in a company, and tolist the nameof the company and the typeof security; and (c) disclose gifts or entertainmentvalued in excess of $50 received by the state official from any business or individual (other thana relative or close personal friend), and to listthe nameof the businessor individual and the

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    approximate value of the gift or entertainment. Pursuant to Virginia law, the state official mustswear or affirm that the information providedon the SOEI is full, true, and correct to the bestofthat official's knowledge.

    67. On or about December 20, 2011, MAUREEN MCDONNELL sold 6,522 sharesof Star Scientificstock held in her Brokerage FirmA account, leaving her with no shares held inher nameat year-end. MAUREEN MCDONNELLmade it clear to the Brokerage FirmA brokeroverseeing the account that the sale of the Star Scientific stock had to occur beforeyear-end inorder to avoid annual reporting requirements.

    68. On or about December 25,2011, MAUREEN MCDONNELL gave ROBERTMCDONNELL the Rolex watch- inscribed on the backwith 71sl Governor of Virginia - thatJW had purchasedpursuant to MAUREEN MCDONNELL'Sinstructions.

    69. On or about January 7, 2012, ROBERTMCDONNELL and his two sons playedgolfat Kinloch. Even though JWwasnotplaying with them, they played as JW's guests andcharged approximately $1,424 to JW's Kinloch member account, including approximately $990in greens fees, $200 incaddiefees, $53 inmerchandise at thepro shop,and $181 in food andbeverages.

    70. On or about January 15,2012, ROBERT MCDONNELL filedhis SOEI. On theSOEI, ROBERT MCDONNELL stated that neither he nor any member of his immediate familyowned securities valued in excess of $10,000 invested in any one business. On the personalliability section of the SOEI, ROBERT MCDONNELL stated that the personal liabilities of hisimmediate family members to individual creditors were in an amount between$10,001 and$50,000 and that the principal business or occupationof the creditor was Medical Services.On the gift section of the SOEI, the only gift from JW that ROBERT MCDONNELL disclosed

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    was listed as Lodging and entertainment in the amount of $2,268, which was the amount JWpaid for the boat rental for the defendants' use during their private family vacation at JW'smultimillion-dollar home on Smith Mountain Lake in July 2011.

    71. On or about January 20, 2012, MAUREEN MCDONNELL used all of the saleproceeds in herBrokerage FirmA brokerage account from theDecember 20,2011, saleof StarScientific stock to purchase 6,672 shares ofStar Scientific stock.

    72. On or aboutJanuary 25, 2012, ROBERT MCDONNELL receivedan email fromMU, who was ROBERT MCDONNELL'S brother-in-law and was assisting in the day-to-dayoperations of MoBo's beach rental properties. Intheemail, MU stated, ForMoBo, I talkedwith [MAUREEN MCDONNELL] last week andshehadmetalktotheguywho is helping us.He said hewas going tocallme the next day togetan address sohe could send the first check. Idid not hear fromhim and I left [MAUREENMCDONNELL] a message yesterday. We'll needto get that inthe nextweek so we can keepup-to-date.

    73. On or aboutJanuary 27, 2012, ROBERT MCDONNELL sentan email toMAUREEN MCDONNELL that forwarded MU's email and stated, Maureen who are wetalking about that is helping us andtalking to [MU]?? [JW]? That sameday,MAUREENMCDONNELL senta response email to ROBERT MCDONNELL stating Just gothome. I'lltalk w u upstairs.

    74. In or aboutJanuary 2012, the Virginia Secretary of Health andhis staffwereplanning a reception forhealthcare leaders thatwould occurat the Governor's Mansion onFebruary 29, 2012. The Secretaryof Health and his staff put togetheran invitation listof thoseindividualswhomthe Secretary wanted to recognize as leaders in healthcare policy in Virginia.The list did not include JW, Star Scientific executives, or researchers affiliated with Star

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    Scientific. MAUREEN MCDONNELL informed JW about the reception and allowed JW toinvite dozens of individuals, including Star Scientific executives, researchers affiliated with StarScientific, and doctors whom Star Scientific was trying to convince to recommend Anatabloc totheir patients. For example, on or about February 4, 2012, MAUREEN MCDONNELL emailedJW and a marketing representative for a Star Scientific affiliate and wrote:

    Weappreciate the list of Docs that you sent, but wanted you to know that youdidn't have to limit them to this area; It's a reception for Healthcare Leaders fromall over the state of Virginia, so please expandon your list. I checked our numberof invites,and if [JW]has any more than these 39 docs, send them along becausewe have room to invite more.75. Because the healthcare leaders reception was to occur at the Governor's Mansion,

    the Secretaryof Health's staffcoordinated the invitation listwith an OGV staff memberwhooversawMansion events. On or about February 8,2012, the OGV staff membersent an email toa Secretary of Health staffmember informing her thatthe defendants had reviewed the invitationlist and that ROBERT MCDONNELL wanted to make sure tha t the Head officers atVCU/MCV,UVA,EVMS, [and the] MasseyCancerCenter were included on the list.

    76. On or about February 9,2012, MAUREENMCDONNELL sent an email toROBERTMCDONNELL, with a courtesy copy to the personal email account of JE, who servedon ROBERT MCDONNELL'S staffas Counselor and Senior Policy Advisor to the Governor.The subject lineof the email was FW: Anatabine clinical studies - UVA,VCU,JHU. In theemail, MAUREEN MCDONNELL stated, Here's the info from JW. He has calls in to VCU &UVA & no one will return hi s calls. The email forwarded an earl ier emai l from a Star Scientificemployee to JW, which described the November 29, 2011, call between senior Star Scientificexecutives and senior UVa officials regarding UVa's role in submitting a grant application to theTobacco Commission for research funding ofAnatabloc. MAUREEN MCDONNELL'S email

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    81. On or about February 22,2012, MAUREENMCDONNELL sent a text messageto ROBERT MCDONNELL, stating [JW] txted me 2say he needs our brokers name and phonenumber to t ransfer shares this week.

    82. On or about February 23, 2012, ROBERT MCDONNELL and MAUREENMCDONNELL had a conference call with a Brokerage Firm A broker. During the call, thedefendants informed the broker that they owned Star Scientific shares that were being held byStar Scientific and that the defendants wanted to transfer the shares into a Brokerage Firm Aaccount. The defendants further stated that they planned on using the shares as collateral for amargin loan that would ultimately be utilized forMoBo. Thedefendants gave the brokerJW'scontact information and asked the broker to call JW in order to coordinate the transfer of the StarScientific stock to the Brokerage Firm A account.

    83. On or about February 29,2012, ROBERT MCDONNELL hada privatemeetingwith JWto discuss potential ways thatJW could transfer 50,000 shares of StarScientific stockthat JW owned to a brokerage account controlled by the defendants. ROBERT MCDONNELLand JW discussed whether such a transfer would be reportable by either ROBERTMCDONNELL or JW and their mutual interest in making sure that it was not.

    84. On or about February 29,2012, the defendants attended the reception at theGovernor's Mansion for healthcare leaders in Virginia. Senior Star Scientific executives(includingJW), researchers affiliatedwith StarScientific, and medicalprofessionalswhomStarScientificwas attempting to impress (including from Virginia research universities) also attendedthe reception.

    85. On or about February 29, 2012, immediately following the healthcare leadersreception at theGovernor's Mansion, thedefendants, JW, and a scientific researcheraffiliated

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    with Star Scientific attended a small dinner at the LaGrotta restaurant in Richmond, Virginia.JW paid for the dinner, which cost approximately $1,423.

    86. Because of concerns about disclosures that would be necessary if JW transferred50,000 shares of Star Scientific stock to the defendants, JW and ROBERT MCDONNELLagreed that JWwould simply transfer $50,000 to MoBo as a loan to thedefendants. The loanwas not documentedand includeda 2% interest rate and a three-year term. Onor about March 6,2012, JW instructedhis assistant towrite a check for $50,000 made payable to MoBo. To makeit more difficult foranyone to discern thatJWwastransferring money to thedefendants, JWinstructed his assistant that the check should not reference the defendants. When JW's assistantmistakenly put MAUREEN MCDONNELL'S name in the memo line of the $50,000 check, JWinstructed his assistant to void that check and write a new check without MAUREENMCDONNELL'S name, which the assistant did.

    87. On or about March 12,2012, ROBERTMCDONNELL sent a text message to JWstating Do you have time tomorrow to talk with me on business matters. Governor. What timeare you available.

    88. On or about March 21, 2012, ROBERTMCDONNELL met with the VirginiaSecretary of Administration to discuss theVirginia state employee health plan and ways toreduce healthcare costsinVirginia. During themeeting, ROBERT MCDONNELL pulled someAnatabloc out ofhis pocket and told the Secretary ofAdministration and one ofher staffmembers that Anatabloc had beneficial health effects, that he personally took Anatabloc, andthat itwas working well for him. ROBERT MCDONNELL asked the Secretary ofAdministration and her staff member to reach out to the Anatabloc people and meet with themto discuss Anatabloc.

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    89. On or about May 18, 2012, ROBERT MCDONNELL sent a text message to JWstating Per voicemail would like to see if you could extend another 20K loan for this year. Callif possible and I'll ask [MU] to send instructions. JW sent a response text message to ROBERTMCDONNELL stating Done, tell me who to make it out to and address. Will FedEx.

    90. On or about Tuesday, May 22, 2012, per JW's instructions, JW's assistant wire-transferred $20,000 to MoBo's bank account.

    91. On or about May 25,2012, JW sent a text message to ROBERT MCDONNELLstating MoBo was doneTuesday. Golf game improving.Hope to play w you and Philhomestead.Star doing great. ROBERTMCDONNELL sent a response text message to JWstating Thankssomuchfor the help. See you in a few weeks.

    92. On or about June 13, 2012, ROBERT MCDONNELL sent an email to JW statingStock looking good. Well done. Gov.

    93. Onor about July 3, 2012, ROBERTMCDONNELL sent a text messageto JWstating Good announcements lately. Stock looks good. Hope all is well. You and [JW's wife]enjoy the 4th of July. Gov.

    94. Fromon or about August 31, 2012, through on or about September 3,2012,ROBERT MCDONNELL and MAUREEN MCDONNELL vacationed as JW's guests at theChatham Bars Inn, a luxury resortand spainCapeCod,Massachusetts. JW, a research scientistaffiliated with Star Scientific, oneof ROBERT MCDONNELL'Spolitical advisors, and theirwives accompanied the defendants on the vacation. JWpaid for the vastmajority of the costsofthe trip, including flyingthe defendantsto CapeCod aboardJW's jet, private cottagesat theresort, golf at the resort course, expensive dinners, and the charter of a sailing yacht.

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    95. From in or about November 2012 through in or about March 2013, the defendantsobtained yard work and other miscellaneous home repairs at their personal residence fromone ofJW's brothers. Those services included the installation of a hot tub cover that JW purchased forthe defendants and work to re-stain the defendants' deck at their personal residence.

    96. On or about December 21, 2012, MAUREEN MCDONNELL called a BrokerageFirm A broker to discuss the 6,672 shares of Star Scientific stock held in her brokerage account.MAUREEN MCDONNELL informed the broker that she wanted individual brokerage accountsopenedforeachof the defendants' fivechildren andthat shewanted to transfersharesof StarScientific stock into the children's accounts. MAUREEN MCDONNELL further informed thebrokerthat thesetransfershadto occur beforeyear-end in order to avoid reportingrequirementsrelated to the ownership of Star Scientific stock.

    97. On or about December 26, 2012, MAUREEN MCDONNELL sent a letter to theBrokerage Firm A broker instructing him to transfer 1,000 shares ofStarScientific stock fromherbrokerage account toeachof thedefendants' five children'snewly opened brokerageaccounts. TheBrokerage Firm A broker followed MAUREEN MCDONNELL'S instructionsand transferred a total of 5,000 Star Scientific shares from her account to the children's accounts.Although the transfers occurred on January 2,2013, the transfers were made effective as ofDecember31,2012, which resulted in MAUREEN MCDONNELL holding 1,672shares of StarScientific stock - valued at approximately $4,480 - as of year-end.

    98. On or about January 15, 2013,ROBERTMCDONNELL filed his SOEI. Onthestandardized disclosure form, ROBERT MCDONNELL stated that neither he nor any member ofhis immediate family ownedsecurities valued in excess of $10,000invested inany onebusiness.On thepersonal liability section of the SOEI, ROBERT MCDONNELL stated that the personal

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    liabilities of his immediate family members to individual creditors were in an amount between$10,001 and $50,000 and that the principal businessor occupation of the creditor was HealthCare. On the gift section of the SOEI, the only gifts associated with JW that ROBERTMCDONNELL disclosed were expenses related to the defendants' luxury vacation at ChathamBars Inn.

    99. On or about January 21, 2013, MAUREEN MCDONNELL called JW's assistantto request that JW provide roundtrip airline tickets for two of the defendants' daughters to travelto a bachelorette party for one of the daughters in Savannah, Georgia. After getting JW'sapproval, JW's assistant made the travel arrangements for the defendants' daughters andob ta ined the tickets.

    100. On or about January 24, 2013, MAUREEN MCDONNELL sent a text message toJW, stating:

    [JW] Wouldyou like to stay at our Beach house in Sandbridge for some of thetime you're inVirginia? Pick the best days and take the timewith your family onthe Ocean. Or You can have a Star Scientific retreat there and have your teamcome downandjoin you for a meeting. Ifone of the weekendsworks out with hislegislative schedule,I'll bringBobdownandthen you'd have some private timeto talk somewhere he's comfortable. Let me know what you think. Mm101. On or about February 10, 2013, ROBERT MCDONNELL sent an email to the

    defendants' five children and courtesy-copied MAUREEN MCDONNELL. In the email,ROBERTMCDONNELLstated in relevant part, Kids. Asking for help, need to rent the beachhouses at Sandbridgemore. Willing to give your friends a discount for the times it's tougher torent. The next day, MAUREEN MCDONNELL forwarded ROBERT MCDONNELL'S emailt o JW

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    G T he Defendants Ef for ts to Conceal th e S c h e me

    102. On or about October 3, 2012, as part of required paperwork for a loan on one ofthe MoBo Virginia Beach properties through TowneBank, ROBERT MCDONNELL causedTowneBank to receive a personal financial statementthat listedtotal liabilitiesof $2,075,000 andlisted noother loans payable. The financial statement did not list any of the loans fromJW.

    103. On or about February 1, 2013, ROBERT MCDONNELL and MAUREENMCDONNELL caused a signed Uniform Residential Loan Application to be transmitted toPenFed as partof aneffortto refinance four loans, including loanson the two MoBo VirginiaBeach properties. The Uniform Residential LoanApplication listed total liabilities of$2,837,226 and listed no loans from or liabilities to JW. It also did not list any Star Scientificsecurities held by the defendants as assets.

    104. Onor aboutFebruary 15,2013, MAUREEN MCDONNELL was interviewed bylawenforcement officers regarding the $50,000and$15,000 checks fromJW in May2011.Although MAUREEN MCDONNELL statedthat the$50,000 checkwasa personal loan fromJW and that she had asked JW for the loanto helpwiththe defendants' expensesand cash flow,she falsely claimedthat therewas a loanagreement that she had signedand that she was makingperiodicpayments on the$50,000 loan. MAUREEN MCDONNELL describedJW throughoutthe interviewas a friend and falsely claimed that ROBERT MCDONNELL had met JW manyyearsago. She further falsely claimed that ROBERT MCDONNELL firstmetJW when theyboth worked togetherat American Hospital Supply followingROBERT MCDONNELL'Sdischarge from the United States Army.

    105. On or about February 18, 2013 -three days after MAUREEN MCDONNELLwas interviewed by lawenforcement- ROBERT MCDONNELL sent a five-page fax to a loan

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    officer at PenFed. On the first-page coversheet, ROBERT MCDONNELL wrote, I reviewedthe general loan application again this weekend and made some updates concerning informationthat was incomplete. The remaining four pages of the fax included handwritten changes byROBERT MCDONNELL to the Uniform Residential Loan Application that had been originallysigned by both defendants and sent to PenFed on or about February 1,2013. The original loanapplication submitted by the defendants to PenFed did not include any reference to liabilitiesresulting from the $120,000 in loans from JW. ROBERT MCDONNELL'S handwritten changeson or about February 18, 2013 listed $50,000 of liabilities to JW and $70,000 of liabilities toStarwood Trust, which was the entity through which JW had funded the loans to the defendants.ROBERT MCDONNELL further stated in his handwritten changes that payments due on thel oa ns wer e z er o and t ha t th e loans were unsecured. ROBERT MCDONNELL'S handwrittenchanges on February 18,2013, also listed 1,672shares ofStar Scientific stock with a value of$3,143 in the assets portion of the loan application.

    106. In or about March 2013, MAUREEN MCDONNELL met with JW's brother atthe defendants' residence and told JW's brother that she had been interviewed by lawenforcement. At that meeting, MAUREEN MCDONNELL - for the first time - asked JW'sbrother to send her a bill for the work JW's brother had performed for the defendants sinceapproximately November2012. Thereafter, on or about March4,2013, JW's brother sent anemail to MAUREEN MCDONNELLstating Find attached a list of expenditures for yourresidence.

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    107. In or about March 2013, after telling JW's brother that she had been interviewedby law enforcement, MAUREEN MCDONNELL also gave JW's brother a box and letter.MAUREEN MCDONNELL asked JW's brother to give it to JW for her, and JW's brothercaused it to be delivered to JW's house. The box included some of the clothing JW hadpurchased for MAUREEN MCDONNELL in April 2011, and it included a handwritten notefrom MAUREEN MCDONNELL to JW and his wife stating:

    I can't begin to thank you how specialyou mademe feelon [CM's] weddingdayand on our 35th Wedding Anniversary Day all dressed up in the beautiful outfitsyou adornedme inon bothmomentous occasions. I'm so happywe've beenableto share so many significant milestones inour lives with you both I truly hopeyourdaughter will nowbeabletoenjoy these lovely outfitsandshow them offonmanygrandoccasions. If not, I'm sure there are manyexemplary charitableorganizations like we talked about who would welcome theopportunity to auctionthem fora wonderful causehavingbeenworn onlyonceby the FirstLadyofVirginia to herdaughter's Wedding at the Executive Mansion and celebrating her35 h Wedding Anniversary with the Governor. Actually, if that happens I thinkI'll be thereto bidon themmyself Please knowthat we cherishour friendshipwith youand look forward to many more wonderful memories togetheraheadXOXO Maureen McDonnell

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    C o u n t O ne

    Conspiracy to Defraud th e Citizens of Virginia of TheirRight to Honest Services by Use of Interstate Wires)

    108. The allegations set forth in paragraphs 1 through 107are repeated and reallegedas if set forth fully herein.

    109. From in or about April 2011 through in or about March 2013, in the EasternDistrict of Virginia and elsewhere, defendants

    RO ERT MCDONNELL andM UREEN G MCDONNELL

    did knowingly and intentionally conspire with each other and with others, both known andunknown to the grand jury, to commit wire fraud, that is: having devised and intending to devisea schemeand artifice to defraud the citizens of Virginiaof their right to the honest servicesof theGovernor of Virginia through bribery, to transmit and cause to be transmitted by means of wirecommunication in interstate commerce writings, signs, signals, pictures, and sounds for thepurpose ofexecuting such scheme and artifice, in violation ofTitle 18, United States Code,Section 1343.

    Pu rpo s e

    110. A purpose of the conspiracy was for the defendants to secretly use ROBERTMCDONNELL'S official position as Governor of Virginia to enrich the defendants and theirfamily members by soliciting and accepting payments, loans, gifts, and other things ofvaluefrom JW and Star Scientific in exchange for ROBERT F. MCDONNELL and the OGVperforming official actions on an as-needed basis, as opportunities arose, to legitimize, promote,and obtain research studies for Star Scientific's products.

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    M a n n e r a n d Mean s

    111. The manner and means by which the defendants would and did carry out theconspiracy included, but were not limited to, the following:

    a. the defendants soliciting and obtaining, both directly and indirectly,forthemselves and their familymembers financial payments, loans, gifts, andother thingsof value from JW and Star Scientific;

    b. the defendants taking steps to conceal from the citizens ofVirginia thethingsof value received from JWandStar Scientific inorder to hidethenature and scope of theirdealings withJW, including by routing things ofvalue through family members andcorporate entitiescontrolled by theGovernor in an effort to avoid annual disclosure requirements on theGovernor's SOEIs;

    c. ROBERTMCDONNELL and theOGVprovidingfavorable officialaction on behalfof JW and Star Scientific as opportunities arose, includingthe official actions set forth below in (iHv);i. arranging meetings for JWwith Virginia government officials,

    who were subordinates of the Governor, to discuss and promoteAnatabloc;

    ii. hosting, and the defendantsattending, events at the Governor'sMansion designedto encourageVirginiauniversity researchers toinitiate studies of anatabine and to promote Star Scientific'sproducts to doctors for referral to their patients;

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    iii. contacting other government officials in the OGV as part of aneffort to encourage Virginia state research universities to initiatestudies of anatabine;

    iv. promoting Star Scientific's products and facilitating itsrelationships with Virginia government officials by allowing JW toinvite individuals important to Star Scientific's business toexclusive events at the Governor's Mansion; and

    v. recommending that senior government officials in the OGV meetwith Star Scientific executives to discuss ways that the company'sproducts could lower healthcare costs.

    (All in violation of Title 18, United States Code, Section 1349)

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    Co u n t s T w o t h r o u g h F o u r

    (Use o f Interstate Wire Communications to Further Scheme to Defraud th eCitizens of Virginia of Their Right to Honest Services)

    112. The allegations set forth in paragraphs 1 through 107 and 110 through 111 arerepeated and realleged as if set forth fully herein.

    113. On or about the respective dates shown below, each such date constituting aseparate count of this Indictment, within the Eastern District of Virginia and elsewhere,defendants

    RO ERT MCDONNELL andM UREEN G MCDONNELL

    and others known and unknown to the grand jury, knowingly and intentionally, havingdevisedand intending to devise a scheme and artifice to defraud the citizens of Virginia of their right tothe honest services of the Governor of Virginia through bribery, for the purposes of executingsuch scheme and artifice, transmitted and caused to be transmitted by means of wirecommunication in interstatecommerce writings, signs, signals, pictures, and sounds, that is thefollowing:

    C o u n t D a t e Description2 5/26/2011 Wire communication from BB&T Bank in th e Eastern Distr ict

    of Virginia to a location outside the Commonwealth of Virginiato cause the transfer of funds from $15,000 check from JW viaStarwood Trust to wedding catering company account withBB&T Bank

    3 3/12/2012 Wire communication from TowneBank in th e Eastern Distric tof Virginia to a location outside the Commonwealth of Virginiato cause transfer of funds f rom $50,000 check from JW viaStarwood Trust to MoBo accoun t with TowneBank

    4 5/22/2012 Wire communication from the Eastern District of Virginia to aBB&T Bank location outside the Commonwealth of Virginia tocause the transfer of $20,000 from JW via Starwood Trust toMoBo a cc ount with TowneBank

    (All in violation of Title 18, United States Code, Sections 1343 and 2.)

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    C o u n t Five

    Conspiracy to Obtain Property under Color of Official Right114 The allegations set forth in paragraphs 1 through 107and 110through 111 are

    repeated and realleged as if set forth fully herein.115. From in or about April 2011 through in or about March 2013, in the Eastern

    District of Virginia and elsewhere, defendantsRO ERT MCDONNELL andM U R E E N MCDONNELL

    did knowingly and intentionally conspire with each other and with others, both known andunknown to the grand jury, to obstruct, delay, and affect in any way and degree commerce, andthe movement of articles and commodities in commerce, by extortion, as those terms are definedin Title 18, United States Code, Section 1951, that is to obtain property, not due ROBERTMCDONNELL or his office and to which ROBERT MCDONNELL was not entit led, from JWand Star Scientific, with their consent, under color of official right.

    (All in violation ofTitle 18, United States Code, Section 1951.)

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    Co u n t s S ix t h r o u g h E l e v e n

    Obtaining Property under Color of Official Right)

    116. The allegations set forth in paragraphs 1 through 107 and 110 through 111 arerepeated and realleged as if set forth fully herein.

    117. On or about the respective dates shown below, each such date constituting aseparate count of this Indictment, within the Eastern District of Virginia and elsewhere,defendants

    R O B E R T F. M C DON N E LL andM A U R E E N G . M C D O N N E L L

    and others known and unknown to the grand jury, knowingly and intentionally attempted to, did,and caused each other and others to obstruct, delay, and affect in any way and degree commerce,and the movement of articles and commodities in commerce, by extortion, as those terms aredefined in Title 18, United States Code, Section 1951, that is the defendants attempted to obtain,did obtain, and caused each other and others to obtain the property listed below, not dueROBERT MCDONNELL or his off ice and to which ROBERT MCDONNELL was not entitled,from JW and Star Scientific, with their consent, under color of official right:

    Co u n t Date Description6 5/23/2011 $50,000 check from Starwood Trust7 5/23/2011 $15,000 check from Starwood Trust8 5/29/2011 $2,380 in greens fees, caddie fees, merchandise, and diningexpenses at Kinloch GolfClub9 1/7/2012 $1,424 in greens fees, caddie fees, merchandise, and diningexpenses at Kinloch GolfClub10 3/6/2012 $50,000 check from Starwood Trust11 5/22/2012 $20,000 wire transfer from Starwood Trust(AH in violation of Title 18, United States Code, Sections 1951 and 2.)

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    C o u n t T w e l v e

    (False Statement)

    118. The allegations set forth in paragraphs 1 through 107 are repeated and reallegedas if set forth fully herein.

    119. On or about October 3, 2012, within the Eastern District of Virginia andelsewhere, defendant

    R O B E R T F. M C DON N E LL

    knowingly madea false statementand reportfor the purposeof influencingthe actionofTowneBank, the accounts ofwhich were insured by the Federal Deposit Insurance Corporation,upon an application, commitment, and loan, andanychange and extension of any of the same, byrenewal, deferment of action, and otherwise, in that on ROBERT MCDONNELL'S personalfinancial statement submitted to TowneBank, he stated that his liabilities totaled $2,075,000,when in truth and in fact, as the defendant well knew, ROBERT MCDONNELL owed at least$50,000to JW thatwas not reflected on his personal financial statement and was not includedinth e total liabilities listed.

    (All in violationof Title 18,UnitedStates Code, Sections 1014and 2.)

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    C o u n t T h i r te e n

    False Statement)

    120. The allegations set forth in paragraphs 1 through 107 are repeated and reallegedas if set forth fully herein.

    121. On or about February 1, 2013, within the Eastern District of Virginia andelsewhere, defendants

    R O B E R T F. M C DON N E LL andM A UR E E N G . M C DON N E LL

    knowingly madea falsestatement and report forthe purpose of influencing the action of PenFed,a federal creditunion,upon an application, commitment, and loan, andanychangeandextensionofanyofthe same, by renewal, deferment of action, andotherwise, inthatonthejoint UniformResidential Loan Application submitted to PenFed, the defendants listed total liabilities of$2,837,226and listedno loans fromor liabilities to JW, when in truth and in fact, as thedefendants well knew, the defendants had received at least $120,000 in loans from JW that werenot reflected on theirjoint Uniform Residential Loan Application andwere not included inthetotal liabilities listed.

    (All in violation of Title 18,UnitedStates Code, Sections 1014and 2.)

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    Co u n t F o u r te e n

    Obstruction of an Official Proceeding)122. The allegations set forth in paragraphs 1 through 107 are repeated and realleged

    as if set forth fully herein.123. In or about March 2013, within the Eastern District of Virginia and elsewhere,

    defendantM A UR EE N G M C D O N N E L L

    attempted to and did corruptly obstruct, influence, and impede an official proceeding of theGrand Jury, that is, MAUREEN MCDONNELL wrote and caused to be delivered a handwrittennote to JW in which she falsely attempted to make it appear that she and JW had previouslydiscussed and agreed that the defendant would return certain designer luxury goods rather thankeep them permanently.

    (All in violation of Title 18, United States Code, Sections 1512(c)(2) and 2.)

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    Fo r f e i t u r e No t i c e

    Pursuant to Federal Rule of Criminal Procedure 32.2(a), the defendants are notified thatupon conviction of the offenses alleged inCounts 1-11 of this Indictment, theyshall forfeit anyproperty, realor personal, which theyobtained directly or indirectly andwhich constitutes or isderived from proceeds traceable to theoffenses of conviction. Property subjectto forfeitureincludes but is not limited to the following:

    The sum of not less than $140,805.46;Black Rebecca Minkoff shoes;Black Louis Vuitton shoes;White Louis Vuitton shoes;Cream Louis Vuitton purse;Cream Louis Vuitton wallet;Silver Rolex Watch engraved with 71s1 Governor of Virginia ;Yellow Peter Som dress;BlueArmani jacket and two matching dresses;Two Gold Oscar de la Renta dresses;Black Louis Vuitton rain coat;Gold Oscar de le Renta sweater;One pair ofAmelia Rose earrings;One Gear sweatshirt;Two pairs of Foot Joy golf shoes;One button-down RalphLaurenshirt;One white Peter Millar golf shirt;One babyblue striped Peter Millar golf shirt;One royal blue Peter Millar golf shirt;One aqua FairwayGreene Tech golf shirt;One white striped Ralph Laurengolf shirt;One Ping University of Virginia golf bag;One Ping Kinloch golfbag;One Sun Mountain Notre Dame golf bag;Two sets ofgolf clubs;One Heather Mackenzie water color and frame;Two iPhones; and30 boxes of Anatabloc.

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    If property subject to forfeiture is not available, the United States will seek an order forfeitingsubstitute assets in accordancewith Title 21, UnitedStatesCode, Section 853(p).

    (In accordance with Title 18, United States Code, Section 981(a)(1)(C); Title 28, UnitedStatesCode, Section 2461(c); andTitle 18,United States Code, Section 982(a)(2).)

    A TRUE BILL

    By:

    DANA J. BOENTEActing United States Attorney

    Os>JP.5ichael S. DryJessica D. AberRyan S. FaulconerAssistant United States Attorneys

    By:

    JACK SMITHChief, Public Integrity SectionCriminal DivisionU.S. Department of Justice

    David V. Harbach, IIDeputy Chief

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