Karen Carter Peterson the former Louisiana state senator and chair of a state Democratic political party has been charged with wire fraud for her role in a nearly seven-year-long scheme to defraud campaign funds, donors, and the Democratic Party to fund her gambling addiction says the Department of Justice.
The Department of Justice charged Peterson in federal court on Thursday in a bill of information which indicates she is cooperating with the federal investigation and will likely plead guilty.
In a statement released Thursday the DOJ says:
As a Louisiana State Senator, Peterson formed and maintained a campaign organization, the “Karen Carter Peterson Campaign Fund (“KCPCF”),” to solicit and raise campaign funds from individual and corporate donors. The campaign funds were solicited based upon the representations and premise that the funds would be used to facilitate Peterson’s reelection for the position of State Senator. In furtherance of her scheme, 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 years. She did so by writing checks drawn on the KCPCF account to her friends and associates and directing them to cash the checks and then to give most or all of the proceeds to her. Peterson 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.
Following the announcement of Peterson’s federal charge, Louisiana Democratic Party Chair Katie Bernhardt released a statement saying:
“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 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.”
If convicted, Peterson faces a maximum of 20 years in prison, a fine of up to $250,000.00, and up to three years of supervised release after she is released from federal prison.
On Wednesday, Peterson paid $50,000 in restitution to the Democratic Party as Nola.com reports.
In a released statement, Peterson’s lawyer, Brian Capitelli says repaying the money “marks an important step in Ms. Peterson‘s recovery as she continues to address her gambling addiction.”
Karen Carter Peterson, who abruptly resigned from state senate, subject of federal probe says report
The statement goes on to say: “She is sincerely remorseful for her compulsive behavior resulting from this addiction and has made full repayment of funds used as a result of her addiction. She has been forthright, honest, and cooperative with the U.S. Attorney’s Office in their investigation.”
Peterson’s gambling addiction has been publicly known since 2019 and in April she resigned from her post in the Louisiana Legislature citing she wants to focus on her mental health and her struggles with gambling.
The resignation came shortly after she was caught entering the Baton Rouge casino, L’Auberge, after she was placed on a casino list of banned people due to gambling addiction.
Prior to her resignation, Peterson served in the senate representing the Central Business District, Broadmoor, Uptown, and Central City districts in New Orleans. She also served as vice chair of the Democratic National Committee from 2017 to 2021.
