Court records detail Karen Carter Peterson wire fraud scheme

NEW ORLEANS – Karen Carter Peterson, a former state senator and Louisiana Democratic Party chair, has admitted she diverted party and campaign funds for her personal use. Federal authorities shed light on the wire fraud scheme in a bill of information filed Thursday.

Peterson’s attorney, Brian Capitelli, confirmed to reporters that she has signed a plea deal. A bill of information typically indicates a defendant is cooperating with prosecutors, who would have to seek an indictment from a grand jury if that weren’t the case.

Peterson is scheduled to be arranged Aug. 1 before U.S. Magistrate Judge Donna Phillips Currault on one count of wire fraud, according to court records. Federal sentencing guidelines for the crime allow for a prison sentence of up to 20 years, three years of supervised release and $250,000 in fines. Peterson’s sentencing will be up to U.S. District Judge Sarah Vance, an appointee of President Bill Clinton.

In a brief Twitter thread posted Thursday, Peterson said that she has repaid the money she took to support her addiction to gambling. She led the Louisiana Democratic Party from 2012 to 2020 and abruptly resigned from her state senate seat in April after 22 years total in the Legislature.

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. (1 of 2)#gamblingrecovery #makingamends

— KarenCarterPeterson (@TeamKCP) July 14, 2022

The bill of information said Peterson’s fraud scheme involved her issuing checks from the state party and her campaign fund to four individuals – each described only as “a friend and associate of Peterson” – and four different companies. Two of the businesses were controlled by Person 2, and the others were controlled by Person 5 and Person 6, also described as friends and associates of Peterson

The parties to whom the checks were written were instructed to cash the checks and “give most or all of the resulting cash to Peterson.”

Only one such incident is described in the bill of information. It says on March 15, 2018, Peterson wrote a check to Person 1 for $4,500 from her campaign account for “legislative assistance.” Peterson then directed the person to cash the check and turn over the money to her, the court record says.

Peterson’s campaign finance records show on that same date her campaign paid Markeith Coleman $4,500 for “legislative assistance.”

The bill of information said Peterson’s scheme was carried out starting no later than November 2013 through early April 2020.