Rep. Waldholtz’s Husband Seeks a Plea Bargain
The estranged husband of Rep. Enid Greene Waldholtz (R-Utah) is negotiating with federal prosecutors the terms of a potential deal in which he would plead guilty to reduced criminal fraud charges in exchange for his testimony against his wife, law enforcement sources said Wednesday.
Joseph Waldholtz, 32, was scheduled to appear before a federal grand jury on Wednesday; instead, prosecutors asked U.S. District Judge Emmet G. Sullivan for a three-week extension while they continued discussions on the conditions of his testimony.
Assistant U.S. Atty. William Lawler told the judge that negotiations with Waldholtz “have not yet reached the point as to whether Mr. Waldholtz will appear and testify before the grand jury.” Another hearing was set for Dec. 15.
Meanwhile, Rep. Waldholtz blasted prosecutors for not moving quickly enough to indict her husband and said that she was providing the government with documents she claims prove that he has engaged in massive fraud for years.
Wednesday’s developments indicate that the Waldholtz case is moving rapidly from an investigation of Joseph Waldholtz’s questionable financial practices to a broad probe into the financing of the meteoric political ascent of one of Congress’ most visible freshman members.
Questions have long been raised about how Rep. Waldholtz acquired and spent the nearly $2 million she used in her 1994 campaign for Congress. Last week, a federal arrest warrant was issued for Joseph Waldholtz, seeking him for grand jury questioning on suspected bank fraud and a check-kiting scheme involving the couple’s joint accounts.
But a well-placed federal law enforcement source said that the investigation also covers the financing of Rep. Waldholtz’s 1994 campaign and her knowledge of or involvement in her husband’s alleged illegalities.
The discussions now under way with Joseph Waldholtz involve his providing evidence against his wife in exchange for more lenient treatment, the official said.
But the official cautioned that the talks could collapse and that Waldholtz may ultimately refuse to testify, citing his 5th Amendment protection against self-incrimination.
Rep. Waldholtz spent $1.8 million on the campaign, one of the largest sums spent on any House race last year. She said most of the money came from personal sources, including a large loan from her stockbroker father.
Rep. Waldholtz, 37, has stoutly maintained her innocence in the matters under investigation and has bitterly accused her husband of deceiving her. She filed for divorce last week and asked a Salt Lake City court to grant her sole custody of the couple’s 12-week-old daughter, Elizabeth.
Continuing her campaign to exonerate herself and implicate her husband, Rep. Waldholtz on Wednesday issued a press release complaining that authorities were not moving aggressively enough against her soon-to-be-ex-husband.
“There is no question in my mind that federal authorities should be charging him for criminal activities,” Waldholtz’s attorney, Chuck Roistacher, said in the statement.
Roistacher said that he and Rep. Waldholtz had discovered a trove of incriminating documents that they were turning over to federal authorities. They claim that the documents prove that Joseph Waldholtz had perpetrated a conscious and continuing scheme to cheat her and many others.
“To say we were stunned by what we found and later obtained would be an understatement,” Roistacher said.
The documents include a mortgage application and 1991 and 1992 tax returns filed by Joseph Waldholtz that vastly overstate his income and assets, Roistacher said.
They refer to more than $500,000 in income from a Waldholtz family trust that Waldholtz’s father has said never existed.
The attorney also turned over copies of apparently fraudulent federal mortgage securities issued in the name of one of Waldholtz’s former employers to his grandmother, Rebecca Levinson.
Waldholtz family members have accused Joseph Waldholtz of looting his ailing grandmother’s trust fund of an estimated $600,000.
“It is clear that Joe used these documents to establish and maintain the myth that he was independently wealthy,” Roistacher said. “He used them to perpetrate fraud and deception on a long line of people that extended way beyond his wife, her family and his own family to his former employers and major financial institutions that relied on his purported trust income to loan him money.”
He said that Rep. Waldholtz feels “great humiliation” at having been taken in by her husband. But “she now knows that Joe Waldholtz was also able to fool a host of other individuals and respected banking and accounting professionals,” Roistacher said.
The statement also mentioned that Rep. Waldholtz would remain in Washington with her father and her advisers throughout the Thanksgiving recess, rather than return to Utah to face her constituents. The statement said she would use the time “to assist the legal team in unraveling this increasingly complex situation and taking care of her daughter.”
Joseph Waldholtz’s attorney, Harvey Sernovitz of Philadelphia, did not return telephone calls seeking comment.
Waldholtz himself, appearing briefly outside the federal courthouse in Washington amid a group of reporters and cameramen Wednesday morning, wished his family a happy Thanksgiving.
He added quietly: “I love my wife and daughter very, very much.”