La. Senator Pleads Not Guilty in Illegal Insurance Business Case

April 25, 2008

A Louisiana state senator pleaded not guilty to charges of helping a convicted felon launder money to conceal her operation of an illegal insurance business.

Sen. Derrick Shepherd, 38, a lawyer from a New Orleans suburb, made his first court appearance since a federal grand jury indicted him April 10 on charges of conspiracy to commit mail and wire fraud, mail fraud and conspiracy to commit money laundering.

The Marrero Democrat allegedly deposited construction bond premiums in his bank accounts for unlicensed bond broker Gwendolyn Joseph Moyo after her accounts were seized by state regulators. Shepherd created false bills and time records to conceal the alleged money laundering scheme, which involved a total of roughly $2 million, federal prosecutors said.

Moyo, 53, who was indicted on related charges in October, has federal convictions dating back to 1989 that barred her from working in the insurance business. She allegedly sold worthless bonds to contractors that left them uninsured for projects.

She also pleaded not guilty before U.S. Magistrate Louis Moore Jr.

Shepherd, who is free on $5,000 bond, did not respond to reporters’ questions. His attorney, Clarence Roby, described the indictment as “interesting reading.”

“And I think the government is going to have a good time proving all of those elements,” Roby said.

Moyo, who is being held without bond, told Moore that she intended to represent herself in court, a move that the magistrate told her to reconsider.

“At some point, you’ve got to quit spending money and getting nothing for it,” Moyo said.

James Zoucha, described by prosecutors as a “straw man” who helped conceal Moyo’s operation of the bonding business, also was charged in this month’s 41-count indictment. Zoucha, 66, of Oceanside, Calif., pleaded not guilty during his initial court appearance on April 11.

Shepherd ran an unsuccessful campaign against U.S. Rep. William Jefferson, D-La., in 2006. The money laundering allegations surfaced last year, only days after voters elected him to a second term in the Senate.

Shepherd gave up his post as a legislative committee chairman after his indictment, but he has denied any wrongdoing and claims he was targeted because he couldn’t help the FBI build corruption cases against other public officials.

The indictment says an unidentified public official who is a political rival of Shepherd’s referred him to Moyo. U.S. Attorney Jim Letten has declined to elaborate on that allegation.

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