Ex-Louisiana Democrat Leader Karen Carter Peterson Pleads Guilty to $150K Wire Fraud

Former Louisiana State Senator and Democratic Party leader Karen Carter Peterson pleaded guilty this week to one charge of federal wire fraud, according to court documents.

Prosecutors accuse Peterson of misappropriating more than $94,000 in campaign funds for her own use, which included gambling at casinos. An additional $53,000 was diverted to her by associates, unidentified in court documents, which they said she had arranged to be hired by the party.

Peterson was first elected to the Louisiana legislature in 1999. She resigned from the Senate in April, acknowledging she had struggled with depression and gambling addiction for her entire political career.

In a statement, Peterson said she needed to “place all of my energy on my own mental health and personal well-being, and therefore tendered my resignation effective immediately.”

Federal prosecutors filed wire fraud charges against her on July 14.

Abuse of Position

According to the complaint filed against her, Peterson knowingly devised a scheme to defraud and obtain money and property from campaign funds through fraudulent pretenses and through interstate wire transmissions. These transactions occurred on or about Nov. 25, 2013, and continued to approximately April 4, 2020.

Peterson’s actions included “depositing checks, cashing checks, and withdrawing cash from financial institutions and then transmitting the funds to Peterson for her own use,” the complaint stated.

The dates correspond roughly with the period that Peterson was Democratic Party chair. In this role, she oversaw the strategic decision-making, operations, outreach, and direction of the party in Louisiana. She also supervised its permanent staff, including individuals who had signatory authority over the financial accounts.

Peterson “abused” this position, prosecutors said.

Peterson: ‘It’s a Disease’

The ex-lawmaker first admitted to having a gambling problem in March 2019. That was after she received a misdemeanor summons from the state police for entering L’Auberge Baton Rouge Casino, having previously self-excluded.

It is a disease,” she wrote in a social media statement in 2019. “From time to time, I have relapsed. I have let myself down, as well as family and friends who are near and dear to me.”

She also criticized whoever leaked her involvement in the confidential state self-exclusion program, describing it as “intentional.”

Controversially, in Louisiana, gamblers who sign up for the program could face a fine of up to $500 and six months in prison just for setting foot in a casino. However, it’s unclear whether anyone has ever been prosecuted for this.

Peterson could face up to 20 years in prison on the federal charges, although this is unlikely considering her willingness to plead guilty, cooperation with federal authorities, and previous good character.