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November 05, 2015

Chaka Fattah Jr. found guilty on 22 of 23 fraud charges

Son of U.S. Rep. Chaka Fattah found guilty of defrauding banks, IRS and Philadelphia School District.

A federal jury reached a verdict Thursday in the fraud case against Chaka Fattah Jr., son of U.S. Rep. Chaka Fattah. 

Fattah Jr., 32, was found guilty on 22 out of 23 federal bank and tax fraud charges. Among other charges, he was accused of defrauding the Internal Revenue Service and the Philadelphia School District of hundreds of thousands of dollars.

According to the U.S. Attorney's Office, Fattah Jr. made false statements to multiple banks in order to obtain loans and business lines of credit. These funds were used to finance personal expenses ranging from car loans and gambling debts to utilities, clothing, electronics, jewelry, legal fees, a luxury condominium, and even charitable donations. 

The charges against Fattah Jr. spanned from 2005-2012, during which time he obtained and defaulted on more than $200,000 in loans he claimed were intended to "support business operations." The false statements he made to banks contained fictitious earnings statements, which also were used to file false federal income tax returns. 

Prosecutors charged Fattah, Jr. with bank fraud, false statements to obtain loans, filing false federal income tax returns, wire fraud, aiding and abetting and more, according to NBC10

Fattah Jr., who defended himself in the trial, painted himself as an entrepreneur, photographer, consultant and educator devastated by an overreaching government case against him. His father, Congressman Chaka Fattah, was present in the courtroom as his son summarized the defense. Fattah Jr. told NBC10 he believes he presented a clear enough case to the jury.

Prosecutors argued that Fattah Jr. lied about his business to banks and adjusted his reported income in order to use the money to fund a lavish lifestyle. 

While acting as Chief Operating Officer of 259 Strategies, a Philadelphia company providing educational consulting services to "at risk" students, authorities said Fattah Jr. stole funds supplied by the federal government to the Philadelphia School District. He provided false expense information and inflated salaries for teachers and administrators in order to increase the school district's program budget and conceal the theft of excess funds, according to investigators.

After filing false federal income tax returns in the tax years 2005, 2006 and 2008, Fattah Jr. failed to pay approximately $51,141 in taxes on reported income exceeding $150,000 during 2010, authorities said. 

The case was investigated by the FBI, IRS Criminal Investigation and the U.S. Department of Education, with assistance from the Philadelphia School District's Office of Inspector General. 

According to the U.S. Attorney's office, Fattah Jr. faces a substantial term of imprisonment, restitution to the IRS, fines, a special assessment, and supervised release. A sentencing hearing is scheduled for Feb. 3, 2015. 

Fattah Sr. is also under federal indictment. He has pleaded not guilty to charges of racketeering, bank fraud, bribery and money laundering.

PhillyVoice staffer Michael Tanenbaum contributed to this report.