Ex-NGSA Official Pleads Guilty to Fraud, Tax Evasion
In a stunning move, a D.C. federal court judge yesterday
remanded Nicholas J. Bush, former president of the Natural Gas
Supply Association (NGSA), to a halfway house pending sentencing on
two felony charges for embezzling $2.8 million from the producer
group. Bush had pleaded guilty.
A U.S. marshal led a weary-looking Bush out of the courtroom
following his arraignment Thursday before U.S. District Judge Emmet
G. Sullivan, who said he wanted to debunk the "perception" that
"life goes on as usual" for white-collar criminals after they plead
guilty and sign plea agreements with prosecutors. "I don't think
I'm being unreasonable" by taking this action, he told Bush's
attorney, William J. Murphy of Baltimore. "Whatever time he serves
now would be credited against his sentence."
Sullivan's decision came as a surprise to Murphy, who had asked
for Bush to be released on his own recognizance pending sentencing.
He said his client was a "long-standing member of his community,"
had "cooperated fully with the government," turned over his assets
as restitution to NGSA and posed no risk of flight.
Bush will remain at the halfway house, the location of which was
not disclosed, until he is sentenced on Oct. 25th for one count of
tax evasion and one count of mail fraud in connection with a phony
consulting scheme that he carried out between 1983-1999 while he
was president of NGSA. Each count carries a maximum penalty of five
years in prison plus fines (a maximum of $5.6 million for the mail
fraud charge alone). The U.S. Attorney's Office in D.C. has agreed
to waive any fines so that Bush can continue to make restitution to
Under the federal sentencing guidelines, Assistant U.S. Attorney
Virginia Cheatham indicated that Bush could get as much as 41
months in a "minimum security" prison. However, if it can't be
proven that Bush embezzled the entire $2.8 million-he contends he
stole "slightly less" than $2.5 million-and that he abused a
position of trust, the former NGSA president could receive a lower
sentence of 27 to 33 months, she said. There also is an unresolved
issue of "sophisticated concealment" related to the tax offense
that could affect his sentencing.
"We anticipate the guidelines to be 33 to 41 months" for Bush,
Cheatham told reporters following the arraignment. Prosecutors plan
to argue that he stole "more than $2.5 million but less than $5
million," that his fraud offense involved "more than minimal
planning," and that he abused a position of trust. But Bush's
attorney contends that his client's "psychological makeup" and his
"extraordinary effort" at restitution favor a lower sentence.
"This is going to be a complicated sentencing proceeding,"
Sullivan said. He ordered the D.C. Probation Department to complete
a sentencing report within 70 days, and scheduled a hearing on the
sentencing issues for Oct. 18th. Whatever term is decided, Sullivan
told Bush "you probably will serve the entire sentence," or at
least 85% of it.
At the arraignment, Sullivan accepted a plea agreement worked
out between the U.S. Attorney Office and Bush's attorney under
which Bush waived his right to have the charges against him
reviewed by a grand jury. The agreement, among other thing, also
preserves Bush's right to argue in the sentencing phase that the
amount he stole from NGSA was less than $2.5 million. It further
said that no "promises" were made to Bush about a reduced sentence.
Sullivan quizzed Bush about his reasons for signing the plea
agreement. "Because I am...guilty of the charges," said the
54-year-old Bush, who noted he has been taking prescribed
medication for anxiety and has been in therapy for the past four
months. His involvement in the fraudulent consulting scheme was
uncovered about five months ago.
Upon reviewing all of the terms of the agreement, Sullivan asked
Bush if he still wanted to plead guilty to the two felonies. In
doing so, "you will never be allowed to vote again" or be a juror.
"I'll give you a fair trial," he promised. Sullivan reminded Bush
that he would not be able to withdraw his guilty plea in the event
the court decides to impose a sterner sentence than that suggested
under the federal guidelines.
After Bush left the courtroom, Sullivan asked Cheatham if the
U.S. Attorney's Office had any idea of what happened to "this vast
sum of money" that Bush embezzled. "We are attempting to track
[that]" now, she said, adding that much of its was spent on
"personal items," such as "food, drink, travel and clothing-items
that do not retain value."
Bush's attorney told Sullivan that his client has been trying to
make restitution. So far, he has sold his house in Washington D.C.
for about $800,000-$900,000. But after subtracting what was owed to
the mortgage company, only about $250,000 went to NGSA. Also "sort
of an agreement in principle" has been worked out to turn over the
funds in Bush's retirement and pension accounts, which were
estimated at about $1.5 million, to the producer group, according
However, after allowing for the penalties assessed by the
Internal Revenue Service (IRS) for early withdrawal of the pension
funds, NGSA again would get only a fraction of the amount. Further
complicating the matter is the fact that Bush's wife, who has filed
for a divorce, owns an interest in the retirement money.