Ex-NGSA Official Faces Criminal Charges
Nicholas J. Bush, former president of the Natural Gas Supply
Association (NGSA), has been charged with one count of criminal
mail fraud and one count of tax evasion in connection with his role
in the embezzlement of more than $2.8 million from the producer
Bush, who was ousted from NGSA when the fraud was discovered in
February, could face up to 10 years in a federal prison if
convicted on both counts, said Channing Phillips, a spokesman for
the U.S. Attorney's Office in Washington D.C., which filed formal
charges last week.
Bush could be arraigned in U.S. District Court on the charges as
early as June 15th. However, if his attorney, William Murphy of
Baltimore, isn't able to finish another case that he's trying by
that date, the arraignment will be pushed back to July 1, Phillips
said. The arraignment will mark the first public appearance by Bush
since news of the fraud surfaced four months ago.
The mail fraud charge covers Bush's role in the entire scheme in
which he "trick[ed] the NGSA into paying over $2.8 million to him
under the assumed names of 'James W. Rogers,' 'James S. Rosebush,'
and 'Kenneth A. Duberstein'" of The Duberstein Group, a consulting
firm in Washington, according to documents filed in federal court.
The fraud began in 1983 - much earlier than was initially believed
- and continued until January 1999, prosecutors contend.
Prosecutors charge that Bush violated the federal mail fraud
code when "on or about" January 1998 he "did knowingly cause to be
delivered by the United States Postal Service to the Internal
Revenue Service" Form 1099 tax information that had been altered to
hide NGSA's payment of $275,000 to Rogers for consulting work that
was to have been performed during 1997. Rogers was unaware of the
scheme, and the money was pocketed by Bush, they said.
Prosecutors said that Bush between 1991 and 1998 routinely
intercepted Form 1099 tax information that was mailed to the three
"consultants" so that "these individuals were not aware that the
NGSA issued checks made payable in their names." During the same
period, Bush also regularly intercepted and altered the Form 1099
notices that were mailed to the IRS in order to "void" entries
showing the consulting income for the non-existent NGSA
consultants, according to the court documents.
In an attempt to further conceal the "consultant" payments, Bush
filed a "false and fraudulent" income tax return "on behalf of
himself and his spouse" for calendar year 1997, prosecutors said.
Bush listed their joint taxable income for that year as $212,088
even though he "knew and believed" it was "substantially in excess"
of that amount. The Bushes paid $60,332 in taxes for 1997.
Specifically, prosecutors said Bush caused the NGSA to issue -
and then pocketed - more than $2.6 million worth of checks made
payable to Rogers, $160,000 worth of checks made payable to
Rosebush, and a $60,000 check to Duberstein over a 16-year period.
The three "consultants" were unwitting parties to the fraud scheme
engineered by Bush. In each case, "Bush took control of this money
and thereafter spent it for his own personal use," they charged.
To perpetrate the fraud, Bush forged the signatures of Rogers,
Rosebush and Duberstein on retainer agreements to provide
consulting services to NGSA, and then submitted and approved "false
and fraudulent expense requests" in their names, according to
prosecutors. They further said Bush "on or about" 1983 forged
Rogers' signature to open a checking account at a Washington D.C.