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'Chip' Fattah Jr. convicted on fraud charges

Chaka "Chip" Fattah Jr. was convicted Thursday on bank- and tax-fraud charges, a significant setback in his family's ongoing legal fight with federal authorities.

Chaka “Chip” Fattah Jr., convicted on 22 of 23 bank- and tax-fraud counts, says he’ll appeal. A
prosecutor said he faces a minimum of just over four years in prison.
Chaka “Chip” Fattah Jr., convicted on 22 of 23 bank- and tax-fraud counts, says he’ll appeal. A prosecutor said he faces a minimum of just over four years in prison.Read more(DAVID SWANSON / Staff Photographer)

Chaka "Chip" Fattah Jr. was convicted Thursday on bank- and tax-fraud charges, a significant setback in his family's ongoing legal fight with federal authorities.

It took a jury of eight men and four women a day and a half to affirm prosecutors' depiction of Fattah as a con artist who cheated banks, his own clients, and taxpayers out of thousands of dollars so he could outfit himself in luxury and project the image of a successful businessman on the rise.

But if the verdict caused the slightest crack in his seemingly unrelenting confidence, the 32-year-old son of U.S. Rep. Chaka Fattah (D., Pa.) did not let on.

Fattah remained stoic as the trial's outcome was announced, saying afterward that he was "disappointed" and "looking forward to a vigorous appeal."

Earlier in the day, he was even more outspoken.

"There isn't going to be any apologizing," he said. "I don't care if I get five years, 10 years, 20 years. Every lawyer I know says I'm going to win this case on appeal."

He said he had no regrets about representing himself at trial.

His father, who faces his own trial in May on separate federal corruption charges, was not in the courtroom when the foreman announced guilty verdicts on 22 counts and acquittal on a single tax-fraud charge. When he arrived soon afterward, his son greeted him with a handshake, addressing him as "Mr. Fattah."

The congressman later vowed his family would "not go and cower in a corner somewhere."

"This is like the Battle of Brandywine," he said, referring to the 1777 British rout of colonial forces at Chadds Ford. "But after people regrouped at Valley Forge, it was a new day."

Ultimately, jurors found the evidence "overwhelming," according to one panel member from Lehigh County who declined to give his name. He said they opted to acquit Fattah on the tax-fraud count because they thought that he had made an attempt to file a tax return for the year in question.

Still, the man said, Fattah did himself no favors by representing himself. He declined to speculate whether a good lawyer would have swayed the jury's opinion in the case.

"He did what he did," the juror said. "Now, he has to face the consequences."

Prosecutors called the verdict "entirely appropriate," but declined to say what type of punishment they would seek.

Assistant U.S. Attorney Eric Gibson said Fattah faced a minimum of just over four years in prison. Still, he pushed for Fattah to be imprisoned until his Feb. 3 sentencing hearing, a request U.S. District Judge Harvey Bartle III denied.

"Given the penalties he faces, it would be more than appropriate to detain him," Gibson told Bartle. "If this trial has proven anything, it is, this gentleman's word is not worth very much."

Gibson and his cocounsel, Paul L. Gray, hammered that point home again and again throughout the three-week trial.

But at times, the charges Fattah faced were all but overshadowed by the colorful details that emerged about his extravagant personal life.

Testifying for the government, a college roommate drew chuckles with his description of Fattah's predilection for watching Law & Order marathons and bingeing on Fiesta Pizza.

Another government witness mentioned a room Fattah devoted in his apartment to his collection of Italian designer suits and Hermes ties. And prosecutors scoffed as they showed jurors the framed American Express black cards Fattah had hung as art in his $600,000 Ritz-Carlton condo.

After the verdict, Fattah's father pointed to the emphasis on his son's flamboyant personal tastes as proof that the Justice Department has vindictively attacked his family.

"My son was condemned in court for what he wears, where he lived at, what kind of car he drove," he said. "It was more like the wild, wild West [in the courtroom], with rules thrown asunder."

But throughout the trial, the younger Fattah encouraged that outsized public persona, tweeting quotations from fictional moguls like Wall Street's Gordon Gekko, and accusing prosecutors in his closing arguments of being jealous because he "bought clothes or went to restaurants that they just can't afford."

Even while waiting Thursday morning for the jury's decision, he took time out to negotiate his first, exclusive post-verdict interview with NBC10, the station that employs his stepmother, Renee Chenault-Fattah, as a news anchor.

According to prosecutors, that type of behavior first landed him in trouble.

Over the last decade, he held himself out as the owner of several successful businesses that prosecutors described as mostly scams.

They referred to his management consulting firm, 259 Strategies, as a shell company. American Royalty - his personal concierge service that promised high rollers access to sports tickets, private planes, and reservations at ritzy restaurants and exclusive golf clubs - ripped off customers out of a total of $53,000.

Nonetheless, Fattah and a former business partner were able to secure $141,000 in business loans in 2005 from area banks to fund those ventures.

Government witnesses testified that Fattah grossly inflated the money he was making to secure the loans and then spent the cash on himself. Later, he downplayed his income to creditors to convince them that he was unable to pay what he owed.

Fattah himself tipped off authorities to a separate scheme of which he was also convicted Thursday.

In 2012, he contacted a Philadelphia School District fraud tip line seeking to implicate - and collect a reward for doing so - his then-employer, Delaware Valley High School, a for-profit education firm that held more than $4 million in contracts to run two alternative schools.

Fattah told district officials in a meeting later that year that company president David T. Shulick had bilked taxpayers out of hundreds of thousands of dollars between 2010 and 2012 by submitting inflated budgets for his program.

Yet, as an undercover FBI agent who was sitting in on that meeting testified at trial, Fattah also thoroughly implicated himself in the theft.

Though now convicted, his and his family's legal battles are far from over.

Fattah filed a civil suit against the Justice Department, FBI, and IRS last year, accusing agents of tipping off reporters to a 2012 raid on his apartment. That claim was bolstered during the trial when Richard J. Haag, the lead FBI investigator on the case, admitted he had given The Inquirer advance notice of the raid.

The congressman faces his own corruption charges on allegations that he misused federal grant funds, charitable gifts, and campaign donations under his control to enrich himself and others - charges he has repeatedly denied.

His case is being handled by the same government team - prosecutors Gray and Gibson and FBI agent Haag - that led the prosecution of his son.

Come his trial date in May, the elder Fattah said Thursday, he will be ready.

"This is a tough day. This is a big loss," he said. "But there will be another day."


Inquirer staff writers Aubrey Whelan and Mark Fazlollah contributed to this article.