Feds Add Fraud To Gandhi's Woes

Yogesh Gandhi, suspected of illegally funneling $325,000 in foreign contributions to the Democratic party, appeared in federal court on unrelated fraud charges Thursday after being arrested as he prepared to fly home to India.

Gandhi was taken into custody without incident Wednesday evening at his home in Walnut Creek, the Justice Department announced.

Separately, in San Francisco, Democratic fund-raiser Johnny Chung is facing charges of tax evasion, bank fraud, and conspiracy to violate federal election campaign laws.

Chung, a California businessman, alleges that, in 1995, he was solicited for money by a White House staffer. He delivered a $50,000 check to first lady Hillary Rodham Clinton's office, and then was allowed to bring a group of Chinese businessman to the White House to watch President Clinton deliver his weekly radio address.

Gandhi was brought before a U.S. magistrate Thursday on a mail fraud charge. A special federal campaign finance prosecutor, Eugene Illovski, agreed to $100,000 bond for Gandhi, which requires him to stay in northern California.

Gandhi is accused of obtaining corporate American Express cards for himself and his wife, Kristi Marshall, in 1995 by forging a coworker's name on the application, according to an affidavit by FBI agent Ramyar Tabatabaian.

Tabatabaian, who works on the Justice Department's campaign finance task force in Los Angeles, said the Hayward police department had learned that Gandhi had a United Airlines ticket to leave at noon Thursday from San Francisco to New York, London and on to New Delhi.

In essence, the task force seized on the unrelated fraud case to prevent Gandhi from leaving the country.

In his affidavit, Tabatabaian said he had learned "through my investigation with the campaign finance task force that Gandhi made a $325,000 campaign contribution to the Democratic National Committee in May of 1966 that is suspected to have come from a foreign source and for which Gandhi is suspected to have acted as an illegal conduit."

The mail fraud charge against Gandhi, who claims to be related to Mohandas Gandhi who won India's independence from England, rests on cooperation provided by a former coworker, Donald Shimer, Tabatabaian said.

Shimer, now employed by Summit Medical Center Foundation in Oakland, Calif., told Tabatabaian that in 1987 or 1988, he accepted Gandhi's offer to become executive director of the Gandhi Memorial International Foundation. Shimer worked there until resigning in 1992.

In May 1996, Shimer was denied credit while trying to purchase goods with his own American Express card, because the credit card company said Shimer had two corporate accounts that were behind on payments.

Shimer learned the accounts had been opened in 1995 based on applications carrying his name and what Shimer swore was a forgery of his signature, Tabatabaian wrote. Shimer said he recognized the forged signatue as the handwriting of Gandhi.

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