The brother of former D.C. Council chairman Kwame R. Brown will plead guilty in federal court to lying on loan documents, his attorney said Wednesday.
Federal prosecutors charged Che M. Brown with bank fraud in court papers filed Wednesday, accusing him of inflating his income by an estimated $35,000 on loan documents he submitted to a mortgage company in 2010.
The charge against Brown, 44, came in a “criminal information,” a document that can be filed only with the defendant’s consent, generally signaling that a plea agreement has been reached. A date has not yet been set for a plea hearing.
The two-page document does not mention Che Brown’s involvement with his younger brother Kwame’s campaign finance troubles.
“He will in fact plead guilty — not to political corruption, but to his personal mistakes,” Brown’s attorney, A. Scott Bolden, said in a written statement.
In June, Kwame Brown resigned as council chairman after he admitted lying on a bank loan application to obtain loans worth more than $200,000 in a separate fraud case. He also was convicted in a misdemeanor case of violating a city campaign finance statute that prohibits cash expenditures in excess of $50.
Federal prosecutors and investigators began examining the former council chairman’s personal finances as part of a probe into his 2008 reelection campaign for an at-large council seat, a bid in which his brother was involved.
The city’s Office of Campaign Finance referred the case to the U.S. Attorney’s office and released an audit finding that the campaign did not report raising and spending more than $270,000.
The audit found that $239,000 in campaign money had been passed to a consulting firm run by Che Brown called Partners in Learning. Those payments were not initially reported.
With Kwame Brown’s knowledge, a relative — identified in the D.C. audit as Che Brown — also created a “side account” to pay for “get out the vote” activities, prosecutors have said in court papers, but the existence of that account was not reported in campaign finance filings.
Che Brown’s attorney said Brown had been seeking to modify his home mortgage with GMAC Mortgage in 2010, when interest rates were high and the value of his home was dropping.
Brown previously pleaded guilty to bank fraud in 1995. He was sentenced to probation and forced to forfeit a 1990 Toyota Celica, according to court records.
Bolden suggested in a statement that the bank fraud charge filed Wednesday essentially exonerates his client of inappropriately using campaign funds. While bank fraud is a “serious” charge, “it is far from the public claims of campaign finance funds missing or stolen or inappropriately used,” Bolden said. “All of these funds have been accounted for.”
A spokesman for U.S. Attorney Ronald C. Machen Jr. declined to comment on the campaign finance aspect of the probe. Machen’s office also declined to comment on sentencing guidelines in Che Brown’s case. Kwame Brown, who faced up to six months in jail for one count of felony bank fraud, was sentenced in November to one day in custody and six months of home detention.
Jennifer Jenkins contributed to this report.