Second North Carolina former attorney sentenced to prison for crimes committed in Wisconsin

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A second former North Carolina attorney has been sentenced to prison for crimes committed on Wisconsin soil, said United States Attorney Gregory J. Haanstad.

On Dec. 28, 2023, former North Carolina Attorney Nathanael Pendley was sentenced to 60 days in prison for conspiring to commit mail fraud and lying to the Federal Election Commission (FEC), according to Haanstad, who serves as U.S. attorney for the Eastern District of Wisconsin.

As previously reported by the Wisconsin Law Journal, court documents revealed Pendley operated a political action committee (Draft PAC) that solicited donations by promising donors their money would be used to convince former Milwaukee County Sheriff David Clarke to campaign for a U.S. Senate seat.

According to court documents obtained by the Wisconsin Law Journal, the Draft PAC raised more than $1.6 million.

Both Pendley and co-conspirator (former North Carolina Attorney) Jack Daly targeted vulnerable victims, including a woman with Alzheimer’s, and elderly veterans, according to court documents.

One 96-year-old victim, who “lived alone on a very limited income,” noted that Daly and Pendley were “con artists” who “should be punished” because “they scammed many working people,” instead of “using their education to help” others.

Ultimately, the funds were spent to benefit Pendley and Daly, according to court documents. As previously reported, Daly was recently sentenced to four months in prison.

According to the North Carolina State Bar, Daly was admitted to practice law in September 1999. Pendley’s law license is suspended, according to the North Carolina State Bar.

The North Carolina State Bar notes that Pendley has a history of multiple public reprimands and suspensions. Pendley was reprimanded in 1994 for conduct prejudicial to the administration of justice and failure to respond to a letter of notice.

He was reprimanded in 1997 for neglect and conduct prejudicial to the administration of justice.

In 2001, Pendley was reprimanded for failure to respond to a letter of notice and failure to claim a certified mailing of a subpoena. In 2003, Pendley received an admonition for failure to respond to the local grievance committee, and in 2006, he received a two-year stayed suspension for failure to participate in a fee dispute resolution, failure to respond to letters of notice and failure to return the client file, according to the State Bar of North Carolina.

Back in Wisconsin, Clarke served as sheriff of Milwaukee County from March 2002 to August 2017.

Also according to court documents, in their solicitations to small-dollar donors, Daly and Pendley falsely suggested that Clarke was still likely to run for the Senate, even after Clarke’s explicit public statement to the contrary.

In communications with both Clarke and the FEC, Daly and Pendley also falsely represented that Daly was no longer responsible for the Draft PAC’s operation.

When Clarke was asked about the PAC, he said, “It’s a scam PAC really. … No one needs to donate to me for U.S. Senate because I am not running.”

According to court documents, on Sept. 7, 2017, Pendley established an email account designed to appear associated with a Draft PAC’s intern. Both his email address and phone number are listed with Google as the associated “account recovery” email and phone number.

Also on Sept. 7, 2017, the Draft PAC submitted a new FEC Form 1, Statement of Organization, to the FEC. This FEC Form 1 claimed that the intern was the Draft PAC’s Treasurer, replacing then attorney Jack Daly. However, Daly and Pendley knew the intern was not performing any duties as treasurer or undertaking any responsibilities as treasurer, according to court documents.

“Such responsibilities had not been delegated to, nor from (the intern). (Daly) continued to serve the same Treasurer functions on behalf of the Draft PAC that he did before (the intern) was listed as Treasurer. This FEC Form 1 was also post-dated, with a purported effective date of August 28,2017. (Daly) was logged in to the FEC’s website the evening this FEC Form 1 was submitted,” court documents state.

Through October 2022, the Draft PAC continued to file submissions with the FEC that represented that the intern was the Draft PAC’s Treasurer, according to court documents.

Pendley’s term of imprisonment will be followed by two years of supervised release. Pendley and his co-conspirator are also jointly responsible for paying $69,978.37 in restitution to their victims, federal officials noted.

As previously reported by the Wisconsin Law Journal, Daly’s term of imprisonment will be followed by two years of supervised release, and he will also pay a $20,000 fine, along with two separate payments of $69,978.37 for restitution and forfeiture, according to federal officials.

According to court documents, on or about Aug. 14, 2016, Daly registered the website www.sheriffclarkeforsenate.com.

Haanstad announced on June 9, 2023, and June 12, 2023, respectively, Daly and Pendley pled guilty to conspiring to commit mail fraud and lying to the FEC.

In May 2023, North Carolina Attorney Jason H. Cowley of the McGuireWoods LLP’s Charlotte office filed a notice to appear as representation for Daly. North Carolina Attorney Roy G. Dixon III, also of the McGuireWoods LLP’s Charlotte office, also filed a notice to appear  on behalf of Daly.

The matter was investigated by the Federal Bureau of Investigation and was prosecuted by Assistant United States Attorneys Kevin Knight and Benjamin Taibleson.