NEW ORLEANS — Former New Orleans State Senator Karen Carter Peterson now stands accused of wire fraud in a single-count federal bill of information.
Court documents indicate she used campaign funds and money at her disposal as head of the Louisiana Democratic Party to pay for personal and gambling related expenses.
She talked about her gambling addiction last March with WWL-TV.
“I’ve been suffering with this disease for over 25 years and there have been peaks and valleys in the recovery phase,” Peterson said. “There is a lot of guilt and shame and embarrassment associated with it.”
According to investigators, Peterson wrote checks drawn from her campaign account to friends and associates.
She then reportedly directed them to cash the checks and give her most or all of the proceeds.
Prosecutors allege at least a half-dozen others and four companies may have participated in the illegal scheme that went on for about 7 years.
Loyola Law Professor Dane Ciolino says these are serious accusations
“Based on a significant loss of $50,000, that’s going to put her in a range that will make her eligible for jail time,” Ciolino said.
Thursday, Peterson said on social media, “Today marks an important step in my life-long recovery as I continue to address my gambling addiction.”
She also said she has made full repayment of the funds used as a result of her addiction and will continue to make amends.
“I think it’s commendable that Senator Peterson has acknowledged her mistakes,” WWL-TV Political Analyst and Gambit Columnist Clancy DuBos said. “She’s owned it. She has begun the process of repaying the money that was misspent. I think she’s sincere in that.”
Peterson abruptly resigned her seat in the Louisiana Senate in April.
“She was forced to resign her position in the state senate and that left her constituents unrepresented,” DuBos said. “It’s a tragedy on many, many levels.”
Katie Bernhardt, who replaced Peterson as chair of the Louisiana Democratic Party, also issued a statement Thursday saying the party has taken various steps to clean up the mess and restore confidence in its financial controls. She also confirmed “restitution has been made on behalf of Senator Peterson.”
Peterson now faces up to 20 years in prison.
She is expected to plead guilty as part of an agreement with the government.
“She will of course argue that her gambling addiction is a mitigating factor,” Ciolino said. “That’s something that the court perhaps can take into consideration in sentencing her when that day comes.”
Peterson is now due in federal court on August 1 at 2 p.m..