The U.S. District Attorney’s Office for the District of Columbia has asked a D.C. federal court judge to sentence Nicholas J. Bush, former president of the Natural Gas Supply Association {NGSA), to a “significant period of incarceration” for embezzling about $3 million from the producer group over a 16-year period.

In papers filed with the U.S. District Court prosecutors have recommended that Bush be imprisoned for a term ranging from 33 to 41 months. He is due to appear before U.S. District Judge Emmet G. Sullivan next Monday (Oct. 25) for formal sentencing on one count of mail fraud and one count of tax evasion. Bush plead guilty to the charges last July and was remanded to a halfway correctional facility in southeast D.C., where he has been ever since. (See Daily GPI, July 2)

Prosecutors are seeking the stiff sentence based on the amount of money Bush stole from NGSA and his abuse of a position of trust. They estimated he embezzled more than $2.5 million but less than $5 million in a bogus consulting scheme, while Bush and his attorneys contend the amount was considerably less. As for abuse of trust, his actions have affected “a large number of people both inside and out of NGSA,” prosecutors said in court papers addressing the sentencing issue.

“In order to avoid exceeding his budget, which was strained by the large amounts of money that Bush was taking for himself, Bush kept the salaries for the staff artificially low, terminated other employees without cause, and refused to hire replacement workers, adding burdens on existing employees,” court documents said. Former NGSA employees, such as Charlotte LeGates, have related the “personal hardships visited upon them” by Bush, while current employees, such as John Sharp, have written to the court about their “tarnished reputation[s].”

Probably most importantly, NGSA “itself has lost [the] financial support of gas companies, through either reduced contributions or refusal to rejoin the association. Bush may have even damaged NGSA’s reputation and undermined its effectiveness in its mission to influence legislation,” according to the court papers.

Bush’s attorneys have asked the court to consider a “downward departure” from the prison term recommended by prosecutors under the federal sentencing guidelines. Bush based his request on his “extraordinary” efforts to make restitution to NGSA. But prosecutors contend Bush’s attempt to reimburse the association hasn’t been all that “exceptional.” In fact, “it was only after he was sued by NGSA that Bush agreed to return money to the victim…NGSA obtained a pre-judgment attachment of real estate and an injunction prohibiting Bush from disgorging his assets. Bush then quickly agreed to give NGSA the house on Palisades Lane N.W.”

Using proceeds from the sales of two homes, his pension plans and other assets, Bush has agreed to return to NGSA a total of about $874,000, which is less than 30% of the embezzled $3 million. “A 30% return of embezzled monies is not ‘extraordinary restitution,” prosecutors told the court.

The fact that Bush is able to repay NGSA this sum does not show that he is “extraordinarily contrite,” prosecutors said, it just shows ‘he is…extraordinarily wealthy.” They urged Judge Sullivan to treat Bush the same as any other criminal. “To treat a defendant who has the ability to make restitution differently than a defendant who is without financial resources would result in sentencing disparities due solely to the socio-economic class of a defendant.”

Prosecutors contend Bush has been unable to accept responsibility for his crime, which they believe further justifies their request for a stiff penalty. Bush “lacks extraordinary acceptance of responsibility…..Bush has a pattern of admitting to his crimes only after he is confronted with the hard evidence,” they said in court papers.

Prosecutors said Bush continued to dip into NGSA resources even after he pleaded guilty last July. “After he entered a plea of guilty to mail fraud and tax evasion and after he was remanded to Hope Village [correctional facility], Bush used NGSA’s telephone calling card number to call various people, including his attorneys.”

Based on information in the presentencing report, prosecutors characterized Bush as a smart man who ended his embezzlement spree only because he was caught. Bush is an “extremely talented and proud man – someone who worked with the heads of major petroleum companies to convince Congress to deregulate the industry; someone who spent time meeting with key congressional staff and attending dinners with members of Congress; someone who was highly paid for his work as NGSA president. And yet, this highly influential and wealthy man embezzled approximately $3 million from his association from 1983 to January 1999, and stopped only when the crime was discovered by his bookkeeper and after he was confronted by an agent from the Federal Bureau of Investigation.”

Bush initially told NGSA attorneys that his embezzlement activities started when he needed money to support his “destitute” parents who were in an assisted-care facility. But “the truth [is] he used only 8% of the embezzled money for parental expenses. During this same time, Bush spent over $100,000 in jewelry, including buying one ring from Tiffany’s for $29,000, and [he spent] up to $150,000 in furnishing the Palisades Lane house,” the court papers said.

Bush said the “substantial costs” for his aging parents began in 1991. But prosecutors pointed out that by that time he had been carrying out his embezzlement scheme for eight years and, in fact, had stolen almost $800,000 from NGSA. Even after both of Bush’s parents died by 1995, he continued to steal money from the association for another four years, “that is until he was caught in January 1999.”

Bush “is using his parents’ poverty merely to gain sympathy……With a legitimate income of $300,000 plus car and expenses, [he] was more able than most to care for his parents in their old age. Bush stole $3 million in order to support a lifestyle that is extraordinary for its excesses,” prosecutors said.

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