Thomas M. Gaubert, a Texas real estate developer and former finance chairman of the Democratic Congressional Campaign Committee, was indicted Tuesday on a charge of fraudulently arranging $8 million in loans for a "land flip" swindle.
Gaubert bought land in Dallas in 1983 for less than 50 cents a square foot and resold it the same day through a middleman for $5.25 a square foot, according to the indictment issued in U.S. District Court in Des Moines.
The buyers, the indictment said, were largely companies controlled by Gaubert. The effect was to transfer millions of dollars from his companies to Gaubert himself.
Arranged for Bank Loan
Gaubert, a prominent campaign contributor to House Speaker Jim Wright (D-Tex.), arranged for Capitol Savings & Loan of Mt. Pleasant, Iowa, to provide financing for the repurchase, the indictment said. Most of the money, $5.6 million, allegedly went to companies under his control.
By arranging the loans, the Justice Department said in announcing the indictment, Gaubert caused Capitol Savings to "unwittingly finance a land flip in Dallas County." He failed to tell savings and loan regulators and state and federal officials that he was both "a buyer and a seller of the land," the department said.
The formal charges against Gaubert are committing fraud, making false statements to a federally insured financial institution and making a false statement to the government. Gaubert faces maximum potential penalties of 22 years in prison and $18,000 in fines. His attorney could not be reached for comment.
The indictment came as part of one of the federal government's biggest investigations of white-collar crime in connection with failures in the Texas savings and loan industry. About 300 savings and loan executives and developers have received subpoenas.
House Speaker Wright intervened on Gaubert's behalf last year with the Federal Home Loan Bank Board, which had forced his removal as head of an insolvent savings and loan association in Texas.
Wright asked the bank board to re-examine its actions against Gaubert. Wright's office said at the time that the Speaker was representing Gaubert as a constituent and was not seeking any special favors.
Gaubert had contributed several thousand dollars to Wright's campaign committee.