U.S. Congressman & Associates Indicted

PHOENIX - U.S. Attorney Diane J. Humetewa and Assistant Attorney General Alice S. Fisher of the Criminal Division, Department of Justice, announced today that a federal grand jury in Tucson, Arizona returned a 35-count indictment yesterday against Richard G. Renzi, 49, of Flagstaff, Ariz., the U.S. Representative from Arizonas first congressional district; James W. Sandlin, 56, of Sherman, Texas, a real estate investor and Renzi's business associate; and Andrew Beardall, 36, of Rockville, Md., Renzis business associate. The indictment charges Renzi and Sandlin in 27 counts with honest services wire fraud, extortion and money laundering, and conspiracies to engage in these acts, based on Renzis active involvement in the sale of Sandlins property in Cochise County, Arizona to a participant in a federal land exchange proposal. The indictment alleges that Renzi and Sandlin previously owned land together in Kingman, Arizona and that in 2003, Sandlin bought out Renzis interest for $200,000 and a note for $800,000. The indictment further alleges that in 2005, at a time when Sandlin still owed Renzi $700,000 in principal on the note, Renzi insisted that two separate entities doing business in Arizona purchase Sandlins property in exchange for his support on land exchange legislation. The indictment also alleges that Renzi failed to disclose to either entity Sandlins $700,000 debt to him; that after the second entity purchased Sandlins property, Renzi failed to disclose to that group the $733,000 he received from Sandlin at the commencement and close of escrow in the spring and fall of 2005; and that Renzi failed to disclose to Congress his earnings from Sandlin in his 2005 Financial Disclosure Statement. Finally, the indictment traces the manner in which Renzi and Sandlin used the alleged proceeds of the above unlawful activities for their own personal and business use. The remaining counts of the indictment charge Renzi and Beardall with violations of federal insurance laws, by embezzling over $400,000 in insurance premiums from the trust account of the Patriot Insurance Agency, Inc., a business owned by the Renzi family in Santa Cruz County, Arizona, to fund his first Congressional campaign in 2001 and 2002, and by subsequently making false statements to influence state regulatory investigations. Each defendant will be summonsed to appear for an arraignment on the charges. The arraignment hearing is set for March 6, 2008, at 11:00 a.m. in Tucson. An indictment is simply the method by which a person is charged with criminal activity and raises no inference of guilt. An individual is presumed innocent until competent evidence is presented to a jury that establishes guilt beyond a reasonable doubt. The investigation preceding the indictment was conducted by the Federal Bureau of Investigation and the Internal Revenue Service, Criminal Investigation. The prosecution is being handled jointly by Andrew Levchuk of the Criminal Division, Public Integrity Section of the Department of Justice and Gary Restaino, Assistant U.S. Attorney, District of Arizona, Phoenix.