Longtime state Representative David Nangle was arraigned Tuesday on more than two dozen charges of alleged fraud dating back to 2014, but his illegal activities may go back at least a decade, federal prosecutors said.
“This was not a momentary loss of judgment or a technical foul,” US Attorney Andrew Lelling said at a news conference. "This was a systematic pattern of theft and fraud.”
Prosecutors alleged that Nangle, a 59-year-old Democrat and member of the House Ethics Committee, raided his campaign account of more than $70,000 to sustain his gambling habit, bilked a local bank out of more than $300,000 in loan money he wasn’t qualified to receive, and cheated the IRS out of tens of thousands of dollars.
Nangle gambled extensively online and at casinos in Massachusetts, New Hampshire, Connecticut, and Rhode Island, and fell into heavy debt, prosecutors said. He was arrested Tuesday morning at his home in Lowell and in the early afternoon entered the federal courtroom with his ankles bound.
He pleaded not guilty to 28 counts alleging wire fraud, bank fraud, making a false statement to a bank and filing false tax returns. US Magistrate Judge M. Paige Kelley set his bond at $25,000 and ordered that he refrain from gambling and surrender his passport.
"David Nangle is a good man who has proudly served his district as a state representative,” said Nangle’s lawyer, William Connolly. "The charges against David are merely allegations. We will fight these charges in court.”
Nangle, who was released on bond, had known he was under investigation, Connolly said outside the courtroom.
Nangle used stolen campaign funds to pay for thousands of dollars in Lowell Golf Club dues; rental cars for casino travel; flowers for his girlfriend; gas, hotel, and restaurant charges he had already received state reimbursement for; gift cards for personal use; and cash withdrawals, according to an indictment.
"If the allegations in the indictment are true, it is safe to say that Representative Nangle has violated the public trust and especially the trust of constituents who donated to his campaign fund,“ Lelling said.
Nangle’s alleged wrongdoing "seems to go back at least five years,” Lelling said. But audits dating back to 2009 "indicate it began earlier,” he said.
Along the way, Nangle misled his staff, campaign treasurer, and a tax preparer, authorities said.
"Mr. Nangle went to great lengths to try to conceal his debt by spearheading several fraud schemes,” said Joseph Bonavolonta, the FBI special agent in charge of the Boston office. "Simply put, Representative Nangle used the power of his position on Beacon Hill to fund a lifestyle out of his reach . . . while also cheating taxpayers.”
Nangle has served in the House since 1999. He sits on the ethics panel, the House Committee on Rules, and the Joint Committee on Rules, according to his biography on the Legislature’s website.
In a statement, House Speaker Robert DeLeo, a Winthrop Democrat, said in 20 years of friendship he never had an inkling of Nangle’s alleged gambling problem.
“The allegations against Representative Nangle are serious and troubling and, if true, represent a significant betrayal of the public trust,” DeLeo wrote. "I was shocked and disappointed to learn of his indictment this morning.
The House cooperated with a federal grand jury subpoena requesting records relating to Nangle’s investigation, he said.
At the request of the US attorney’s office, he could not discuss details or provide further comment, DeLeo said.
Governor Charlie Baker, a Republican, told reporters at the State House that the allegations are serious and "I anticipate that they will be fully investigated by the US attorney,” his office said.
According to the indictment, Nangle sought loans from Lowell Bank to repay debts but lied about his income and amount of debt on loan applications.
While seeking a home mortgage in February 2015, Nangle allegedly blamed "his bad credit on his ex-wife,” claiming she failed to repay money he’d lent her.
But prosecutors said Nangle had not lent her any money and had instead spent thousands of dollars gambling at casinos.
Nangle is also accused of filing false tax returns from 2014 to 2018.
Authorities said he reported consulting work he never did, claimed phony business expenses and fake charitable contributions, and inflated mileage and commuting expenses.
An unnamed Tyngsborough contractor also got caught up in Nangle’s scams, prosecutors alleged. The contractor did work on Nangle’s home that Nangle never paid for, according to the indictment. Instead, the contractor was awarded lucrative bids for construction projects that Nangle had secured state funding for.
An unnamed friend allegedly got a job as a state employee in Lowell through Nangle and helped him complete and file false federal income tax returns, prosecutors said.
At least once, the employee refused to submit a return via TurboTax that contained inflated expenses, the indictment said.
So Nagle pressed the TurboTax "submit” button himself, saying he would "take the blame if anything happens.”