STATE REP. DAVID NANGLE, a Lowell Democrat and member of the Legislature’s Ethics Committee, was arrested Tuesday and charged with using his campaign account to pay for more than $70,000 in personal expenses, from golf club dues to rental cars that he used to travel to casinos.
The indictment by a federal grand jury says Nangle, 59, who represents the 17th Middlesex District, was a gambler who was in heavy debt and used his campaign funds to cover his expenses. He is accused of filing false bank statements and tax returns. He is also accused of obtaining free work from a contractor who received a lucrative state contract.
US Attorney Andrew Lelling said Nangle “violated the public trust and especially the trust of his constituents who donated to his campaign fund.” Lelling said despite drawing a public salary of at least $90,000 some years for his work as a state representative, Nangle “repeatedly stole and defrauded others so he could have access to even more funding.”
Nangle was taken into custody without incident Tuesday morning at his Lowell home, according to the FBI.
Nangle, who has been in the House since 1999, is a member of House leadership, as second division chair. He is a member of the House Committees on Ethics and Rules, and was previously vice chairman of the Ethics Committee.
Nangle walked into federal court in Boston in leg chains Tuesday afternoon for his initial appearance, and was led out afterwards in handcuffs. He pleaded not guilty on all counts, and spoke only briefly to answer questions from the judge stating that he understood his rights.
Magistrate Judge M. Page Kelley released him on an unsecured bond of $25,000, which he will only have to pay if he does not show up in court.
Nangle will be restricted from traveling outside of Massachusetts, other than to one location in New Hampshire where he goes to tend to his girlfriend’s dogs. He will not be allowed to gamble, as a condition of his probation.
His attorney, Bill Connolly, said Nangle “is a good person” who has “proudly served the people of his district.” “These charges are only allegations and we will fight these charges in court,” he said.
Nangle, leaving the courthouse, did not speak to the press.
The illegal activity has been going on since at least 2014, according to the US Attorney’s office.
According to the indictment, Nangle gambled extensively at casinos throughout New England and online, incurring tens of thousands of dollars of gambling debt.
He used his campaign account – money donated to his campaign by private donors for political purposes – to pay for Lowell Golf Club dues and fees, rental cars to drive to casinos, flowers for his girlfriend, gas, hotel and restaurant charges, gift cards, and cash for his personal use. He hid the purchases from his campaign staff and filed false campaign finance reports that disguised the charges. For example, he rented a car to gamble at a New Hampshire casino, but wrote on his campaign finance report that he used it to travel to the State House.
He also allegedly “tripled dipped,” using campaign funds to pay for some of the same expenses that he was already reimbursed for by taxpayer dollars, then trying to claim those same expenses as federal tax deductions.
He used an acquaintance as a “straw campaign vendor.” Nangle paid that person for providing made-up campaign services, and the person cashed the checks and gave the money back to Nangle, through a relative.
The indictment charges that Nangle applied for and received four loans from Lowell Bank, totaling nearly $400,000, by lying on loan applications. For example, he concealed over $100,000 in debt that he owed to various restaurant owners and made up fake documents to pretend he had income from consulting work that he never performed.
The indictment also charges Nangle with lying on his tax returns, generally by deducting false or inflated expenses. For example, he claimed tens of thousands of dollars in business expenses for consulting work, even though he did not perform any consulting work. He also made up false charitable donations.
When he won a $1,200 jackpot at a Connecticut casino, which triggered a requirement that the casino report the winnings to the IRS, Nangle paid someone else to collect his winnings to avoid the IRS reporting.
Nangle also used his political clout to get free contracting work. A Tyngsboro contractor performed more than $7,000 worth of work on Nangle’s kitchen, bathroom and fireplace, which Nangle never paid for. But Nangle did secure state funding for lucrative construction projects, which the contractor was awarded. After the contractor got the state job, Nangle asked him to perform more free work.
Nangle also used his political ties to help someone receive a state job in Lowell, and that same state employee then helped Nangle file his false federal income tax returns.
Nangle was charged with 10 counts of wire fraud; four counts of bank fraud; nine counts of making false statements to a bank; and five counts of filing false tax returns. The bank fraud charges carry sentences of up to 30 years in prison, and the wire fraud charges carry sentences of up to 20 years.
“This is not a case of mismanagement, sloppy accounting or innocent mistakes,” said Joseph Bonavolonta, special agent in charge of the FBI’s Boston field division. “Simply put, Rep. Nangle used the power of his position on Beacon Hill to fund a lifestyle out of his reach unwittingly financed by those who put him there, while also cheating the taxpayers.”
Lelling said the investigation is still ongoing. He could not say if anyone else would be charged.