Ex-Broward state senator charged with tax evasion in corruption case

Former state Sen. Mandy Dawson, a Fort Lauderdale Democrat, was arrested on tax-evasion charges stemming from a major Justice Department corruption probe.

Article Courtesy of Miami Herald


Published July 23, 2011

A five-year federal corruption investigation stretching from South Florida to Tallahassee resulted in the arrest Wednesday of a former Fort Lauderdale politician, on income tax charges.

Former state Sen. Mandy Dawson, a Democrat, was arrested by federal agents at her Daytona Beach home on charges of income-tax evasion and failing to file tax returns. The charges stem from her receipt of $82,000 from a major GOP operative who says he was seeking political favors from her while she was serving in the Florida Legislature.

Dawson, 55, who served 16 years as a Broward legislator, made her first appearance in Orlando federal court accompanied by her husband and was released on a $100,000 bond. She will be prosecuted in Miami, where a federal grand jury charged her with failing to pay income taxes of $11,889 for 2004 and $12,966 for 2005, and with not filing Internal Revenue Service returns for 2006, 2007 and 2008.

A Broward politician who served with Dawson in the Legislature expressed sympathy for her.

“What I would say about her is that she was a champion for the poor, for the needy in our state,” said state Sen. Nan Rich, D-Weston. “She was a champion for the medically needy, people with AIDS. She cared about people that nobody else cared about. It’s very sad.’’

Broward physician Alan Mendelsohn -- the fundraiser who says he paid off Dawson so she wouldn’t oppose legislation he advocated -- was sentenced to a four-year prison sentence in June after pleading guilty to a single conspiracy charge of defrauding the U.S. government.

Mendelsohn admitted that he failed to report to the IRS $700,000 he secretly diverted from campaign donations and other income to himself, his family and his mistress. A chunk of that money also went to Dawson, he said.

Some of the political donations were made after Mendelsohn, an unregistered lobbyist, bragged about his purported connections to former Gov. Charlie Crist, officials on the governor’s staff and state legislators. Mendelsohn served on Crist’s gubernatorial transition team in 2007, after Crist was attorney general.

Mendelsohn was the focus of the Justice Department investigation, which expanded to include Crist, his senior aides and other officials who had worked for him at the governor’s and attorney general’s offices. All of them were cleared, according to federal sources.

At Mendelsohn’s sentencing, U.S. District Judge William Zloch told the 53-year-old ophthalmologist that his stiff sentence was warranted because his pay-to-play misconduct was like a “cancer" with “tentacles" that corrupted good government in the Florida legislature.

Mendelsohn’s lawyer, whose client was facing 2 to 2˝ years under sentencing guidelines, has appealed, arguing the judge’s punishment was unreasonable because he enhanced the doctor’s prison term for corrupting the political system. But Mendelsohn pleaded guilty to tax-evasion conspiracy, not corruption, the lawyer said.

“If you don’t charge Dawson with corruption, then how is what my client did, wrong?” Fort Lauderdale Attorney Alvin Entin asked.

The investigation into Mendelsohn grew out of his lobbying on behalf of a Fort Lauderdale company, Mutual Benefits Corp., whose top executives were eventually charged in federal court with bilking $1 billion from investors who purchased life insurance policies belonging to people dying from AIDS.

But the probe, which began in 2007 when Mutual Benefit’s principal, Joel Steinger, wore a wire for the FBI in a sting operation targeting Mendelsohn, has resulted only in the conviction of the physician and the Dawson indictment.

Zloch expressed outrage over Mendelsohn’s admissions during his plea hearing in December, when he said he siphoned $330,000 from his political action committees and funneled $82,000 to Dawson after she repeatedly pressured him to hire her associate.

Mendelsohn said the associate, Venica Blakely, served as a conduit for the 2003-05 payoffs to Dawson, whom the physician feared might oppose legislation for the medical profession.

At the plea hearing, he told Zloch that if influential insiders didn’t pay political bribes in Tallahassee, they would be “toast."

Blakely, who has not been charged, declined to comment on Wednesday. Dawson could not be reached for comment. She was temporarily represented by an assistant federal public defender Wednesday.

According to the indictment, Dawson failed to pay taxes on $92,324 in 2004 and $102,896 in 2005.

Dawson faces up to five years in prison on each of the two tax-evasion counts and one year on each of the three charges of failing to file a tax return.

In the Legislature, Dawson served portions of Broward and Palm Beach counties for six years in the House followed by a decade in the Senate. Term limits forced her out of office in 2008.