Lowell Rep. David Nangle was arrested at his home Tuesday and faces a slew of federal charges in what U.S. Attorney Andrew Lelling described as a "systematic pattern of theft and fraud going back to at least 2014."
Federal authorities allege that Nangle, a Democrat who has served in the House since 1999 and is a member of Speaker Robert DeLeo's leadership team, filed false tax returns and used campaign money to spend thousands of dollars on personal expenses including golf club dues, rental cars to travel to casinos, and gift cards.
Nangle is also accused of providing a Lowell bank with false information to secure loans to cover personal debts and finance gambling activity.
Nangle faces ten counts of wire fraud, four counts of bank fraud, nine counts of making false statements to a bank, and five counts of filing false tax returns.
Joseph Bonavolanta, special agent in charge of the FBI's Boston field division, said the FBI began investigating Nangle in November 2017.
"Simply put, Representative Nangle used the power of his position on Beacon Hill to fund a lifestyle out of his reach, unwittingly financed by those who put him there, while also cheating the taxpayers," he said.
Nangle on Tuesday afternoon pleaded not guilty to all charges and was released on $25,000 unsecured bond with conditions. He arrived in the courtroom in handcuffs and ankle shackles; an officer took the handcuffs off as he entered courtroom, and then put him back in handcuffs to escort him out of the room.
His attorney, William Connolly, told the News Service that the representative will "fight these charges."
"Dave Nangle is a good man who has proudly represented his district as a State Representative," Connolly wrote in an email. "The charges against David are nothing more than allegations. We will fight these charges in court."
The 28-page indictment alleges that Nangle was heavily in debt with poor credit and "had regular cash flow problems as a result of extensive gambling" at casinos in Connecticut, New Hampshire, Massachusetts and Rhode Island and on gambling websites, and that, in order to "keep himself afloat financially," he illegally used campaign funds to pay for personal expenses, defraud his bank lender, and collect income he failed to report to the Internal Revenue Service.
Lelling said Nangle stole over $70,000 of campaign funds for personal use and used an acquaintance as a "straw campaign vendor" who received campaign funds and then returned them to Nangle for the lawmaker to spend.
"Corruption can be easy and tempting for state level elected officials, but here Representative Nangle went beyond that," Lelling said at a press conference in his office at the Boston federal courthouse. "This was not a momentary lapse or a technical foul. This was a systemic pattern of theft and fraud going back to 2014. Nangle accomplished it in part by using people close to him."Nangle also allegedly received services from area businesses that he did not pay for, including work on his home by a Tyngsborough contractor who was later awarded "lucrative bids for construction projects for which Nangle had secured state funding," Lelling said.
The indictment said that Nangle enlisted a friend with a state job, identified as "Lowell State Employee", to help complete and file false tax returns in the tax years from 2014 to 2016, providing that person with information to enter on TurboTax.
"In at least one instance, the Lowell State Employee refused to hit the submit button on TurboTax because he was aware that the inflated expenses were fraudulent," the indictment said. "In response, NANGLE pressed the submit button, assuring the Lowell State Employee that NANGLE would 'take the blame if anything happens.'"
FBI and IRS agents arrested him at his Lowell home Tuesday morning without incident, authorities said.
Nangle is a member of the House Ethics and Rules committees and one of four division chairs under Speaker DeLeo, a position that carries a $30,000 stipend. A DeLeo spokeswoman did not respond to questions on whether the speaker was aware of the investigation or if Nangle would retain his leadership post.
The code of ethics in the House rules states, "No member shall convert campaign funds to personal use in excess of reimbursements for legitimate and verifiable campaign expenditures." It also says that representatives cannot "receive any compensation or permit any compensation to accrue to their beneficial interest by virtue of influence improperly exerted from their official position in the House."
A review of Nangle's voting record indicates he opposed efforts to expand legalized gambling in Massachusetts under former Speaker Salvatore DiMasi but supported it under DeLeo.
In 2006, Nangle voted to reject a bill that would have added thousands of slot machines to the state's racetracks. Two years later, he joined with a majority to send then-Gov. Deval Patrick's casino bill to a study committee. DeLeo took over in 2009 and in 2010, Nangle voted in favor of an expanded gaming bill that ultimately collapsed, and he repeated his support in 2011, when the legislation succeeded with support from the Senate and Gov. Patrick.
Lelling said that his office will continue to "aggressively" go after public corruption. His office brought charges last year against then-Fall River Mayor Jasiel Correia and Dana Pullman, the former president of the State Police Association of Massachusetts.
A moderate Democrat, Nangle is known on Beacon Hill for occasionally endorsing high-profile Republican candidates, including Gov. Charlie Baker and former U.S. Sen. Scott Brown.
"Obviously they are serious charges and I anticipate that they will be fully investigated by the U.S. attorney," Baker told reporters Tuesday.
The charge of wire fraud allows for a sentence of up to 20 years in prison, three years of supervised release and a fine of $250,000, according to Lelling's office. Bank fraud and making false statements to a bank each allow for a sentence of up to 30 years in prison, five years of supervised release and a fine of up to $1 million.
As of Tuesday morning, Nangle had not pulled papers to run for re-election.
Last month, The Sun of Lowell reported that Nangle's campaign finance reports showed an $8,700 payment to Boston law firm Donnelly, Conroy & Gelhaar, LLP, and that Nangle, when asked if he was under any state or federal investigation, said he "knew nothing about it."
Chris Lisinski, Colin A. Young and Chris Van Buskirk contributed reporting.
