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Former state senator Oaks pleads guilty to fraud charges

State Sen. Nat Oaks. (The Daily Record / Maximilian Franz)

State Sen. Nat Oaks. (File photo.)

Former state Sen. Nathaniel T. Oaks pleaded guilty Thursday to wire fraud charges in a federal bribery case hours after formally resigning from the General Assembly.

Oaks changed his plea to guilty on one count each of wire fraud and honest services wire fraud. U.S. District Judge Richard Bennett said other charges, including obstruction of justice, would be dismissed as part of a plea deal with prosecutors worked out earlier this week.

Oaks, 71, will be sentenced July 17. The Baltimore Democrat submitted his legislative resignation Wednesday night to Senate President Thomas V. Mike Miller Jr. It became effective Thursday morning.

Prosecutors accused Oaks of taking $15,300 in bribes from an informant posing as a Texas investor. He will forfeit all assets obtained through the fraud as part of the plea agreement.

“I think corruption cases, the reason they’re so serious is the damage: it undercuts the confidence citizens have to have in their legislators,” acting U.S. Attorney Stephen M. Schenning said after the hearing. “The damage is it erodes the confidence that citizens should have in these institutions.”

Oaks declined to comment as he left the courthouse with his attorneys. He faces a maximum of 20 years in prison for each count but Bennett said the sentences will run concurrently. Federal guidelines recommend an eight- to 10-year sentence but Bennett stressed that he is not allowed to presume those guidelines are reasonable and will consider the full pre-sentence report that will now be prepared and arguments of the attorneys before deciding Oaks’ sentence.

According to the agreed facts read into the record, Oaks was introduced to the confidential informant, who went by the name Mike Henley, in September 2015 when Oaks was a member of the House of Delegates.

Oaks spoke with Henley several times in the following months about business interests, including a housing development in Oaks’ district that Henley said a contact at the U.S. Department of Housing and Urban Development could assist with if Oaks reached out. Henley made it clear he had another contact he paid to assist him and suggested he could do the same for Oaks.

Oaks used coded language and hand signals but eventually agreed to and did send letters to HUD on his official letterhead and requested the Maryland Department of Legislative Services draft a bond bill to support the phony development project. He often referred to the need to be careful and his belief that the FBI was monitoring his phone conversations, eventually going with Henley to purchase a burner phone.

The summarized facts also detailed Oaks’ behavior after he was confronted by investigators in January 2017 and agreed to cooperate with them but later tipped off the investigation’s target. A superseding indictment charged him with obstruction of justice.

Schenning said Thursday prosecutors felt it was important to have Oaks acknowledge his interference with their investigation in part so Bennett can consider the facts during sentencing and also for public understanding of the case.

Issue for appeal

Bennett noted in court the plea agreement waives Oaks’ right to appeal his conviction of wire fraud but preserves the right on the honest services wire fraud charge, which was the subject of a motion to dismiss earlier this month, though any victory on appeal would not affect his jail time because the second sentence will run concurrently.

“It would be a legal victory for your defense team, which has worked very hard for you,” Bennett said.

Oaks’ attorneys argued requesting draft legislation did not constitute an official act as required by the charges because the bill was never filed. They relied on the Supreme Court’s 2016 decision overturning former Virginia Gov. Robert F. McDonnell’s corruption conviction. The court outlined what constitutes an official act and found activities such as setting up meetings or sending letters on official letterhead were insufficient.

Bennett denied the motion and found requesting the legislation qualified “lies at the very heart of a legislator’s official purpose.”

Schenning said Thursday he does not have any concerns about the 4th U.S. Circuit Court of Appeals disagreeing with Bennett’s analysis if the issue were to be appealed, calling the legislation request “quintessentially an official act.”

The case is United States of America v. Nathaniel Thomas Oaks, 1:17-cr-288.

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