By Tom Aswell and Dayne Sherman
Louisiana Attorney General Jeff Landry has rarely passed up an opportunity to announce yet another fraud arrest in his never-ending quest to rid the state of white-collar crime. In fact, he seems to have made fraud investigations the cornerstone of his tenure as the state’s chief legal officer.
But now it appears that Landry, the current frontrunner to be Louisiana’s next governor and just formally endorsed by Donald Trump, may have himself been the willing victim of a scam that pulls on the heartstrings and which may have been perpetrated by a former NFL football player who already had a long laundry list of no fewer than eight failed companies with tax liens, litigation, out of court settlements, and claims of securities fraud.
None of the eight foregoing cases involved Landry, according to a STORY published by ProPublica, a non-profit Pulitzer-Prize-winning online investigative news organization, and its journalistic partner, Texas Tribune. His participation was saved for Kenny Hansmire’s latest scheme. Besides Landry, political heavy hitters Greg Abbott, Dan Patrick, Ted Cruz, and Ken Paxton, among others, also enthusiastically endorsed Hansmire – at considerable costs to the public.
Still, it’s a sad tale of grift, financial misdeeds, and tax liabilities and Jeff Landry, the man who prides himself as an anti-fraud crusader, appears to have fallen in willingly
In Louisiana, the Louisiana Sheriffs’ Association, Ochsner Health, Our Lady of the Lake Health, and American Electric Power teamed with Landry to distribute kits containing fingerprints and DNA samples of children throughout the state through local sheriffs’ offices last fall. The kits were promoted as a method to keep children safe but critics have questioned their effectiveness.
Texas beat everyone to the draw when way back in 1998, then-Gov. George W. Bush solicited voluntary contributions from the private sector to finance the distribution of four million kits. Bush continued to push the program after becoming president by hooking up Hansmire’s program with the FBI that lasted until the resignation of FBI Director Robert Mueller.
Rick Perry, who succeeded Bush as Texas governor, infused the first public funding into Hansmire’s National Child Identification Program (NCIP) when he directed $3 million of taxpayer money into the program. In 2021, State Sen. Donna Campbell pushed through legislation that not only reestablished public funding by appropriating an additional $5.2 million for the kits but signed it into Texas state law by Gov. Abbott.
It has also enjoyed the backing of Texas Lt. Gov. Dan Patrick and Attorney General Ken Paxton.
In 2010, US Sen. Ted Cruz, a Texas Republican, tried unsuccessfully to pass legislation that would have allowed the US Dept. of Justice to award grants to local law enforcement agencies so that they could purchase NCIP kits for distribution.
But it was Landry who, in a November 2021, wrote a LETTER in which he requested funding from the National Association of Attorneys General (NAAG) after Hansmire learned of the existence of a NAAG slush fund held over from the 1998 multistate tobacco settlement. The NAAG had established a foundation which was sitting on $100 million from the settlement – $55 million of which was generating $9 million a year in interest.
Saying that the $9 million “would fund a child ID kit for every kindergarten kid in America,” Landry sought that amount, the largest ever requested to support an outside organization. In that Nov. 1 letter, Landry asked that the association’s executive committee set aside time at its next meeting to explore how “resources” could be used to support Hansmire’s company.
Landry, at a Dec. 6 meeting proposed a grant program to allow corporate sponsors to match the NAAG contributions. A draft of the NAAG Executive Committee’s MINUTES of that date indicate that NAAG Executive Director Chris Toth asked what the committee should know what the NCIP would be able to do for the attorneys general in return, to which Landry replied that there “has to be a quid pro quo.”
Landry later asked that the reference to a “quid pro quo” be expunged from the minutes, Toth later said, and the reference did not appear in the final version of the minutes.
Exactly what he meant by the term is unclear, though there was no indication that he intended to benefit personally from his going to bat for Hansmire but whatever he meant, the NAAG rejected Landry’s request. He next turned to the sheriffs’ association and the three private entities for support.
But lost in all the hoopla about funding are the disturbing critiques of the program and Hansmire’s unsettling history of failed enterprises, brushes with the law, and millions of dollars in tax liens that preceded NCIP.
Of the success of NCIP, the reviews are most definitely mixed at best and troubling at worst.
One of the 10 states besides Louisiana that have adopted Hansmire’s program is South Carolina. A staff member for that state’s attorney general, Alan Wilson, said his office could find no evidence of the kits’ effectiveness and that that state’s investing in them was not a wise use of dedicated funds for crime victims’ assistance.
The National Center for Missing and Exploited Children also was critical of Hansmire’s claim that 800,000 children go missing each year. David Finkelhor, a child safety researcher, said the number is closer to 30,000 active cases of missing children, a number that includes runaways. He said that the number of children under the age of 18 who are abducted and hurt or killed or taken great distances by strangers is only about 100 per year.
But 800,000 sounds better when you’re trying to sell fear.
In speaking against Campbell’s bill to make the state appropriation a part of Texas law, State Rep. Gary Gates said no one had told him how many children had been saved by the kits. “This program has been in existence for 20 years,” he said. “If it really was an effective program, someone would have gotten up there and cited statistics.”
In something of a Gary Hart challenge, Hansmire suggested to reporters in 2022 that they contact various Texas law enforcement agencies and speak to “any policeman” about the effectiveness of his program. ProPublica did just that and of the 11 law enforcement agencies that responded, none could cite an example in which a kit had a role in finding a runaway or kidnapped child.
But the success or failure of the effectiveness of NCIP probably should not be the focus of the 11 states that have endorsed it. Perhaps they should be looking instead at the history of the various endeavors of Hansmire
In the decade prior to partnering with the states, Hansmire pleaded guilty to two felony charges — cattle theft in 1988 and theft by check in 1993 — and was convicted of drunk driving. He was fined and jailed and had his license suspended for the DWI. For the two felony charges, he received deferred adjudication, a process that lets people accused of certain crimes avoid a conviction if they successfully complete probation without any other violations. The terms of his probation included drug and alcohol programs and hundreds of hours of community service in addition to paying thousands of dollars in restitution.
Hansmire and his companies were sued at least four times in the 1990s for unpaid debts, court records show. He was ordered to pay in three of those cases and reached a settlement in the fourth. Meanwhile, he was starting to accumulate millions of dollars in federal tax liens, records show.
Hansmire pursued a series of business ventures that centered on college football all-star games in Hawaii and Texas. The companies, which faced several lawsuits and financial struggles, eventually failed.
In an effort to raise funds for his businesses, Hansmire linked up with a Connecticut securities broker named Dale Quesnel who received $166,000 for his efforts to persuade at least 10 individuals to invest $1.9 million to Hansmire’s companies. In one case, Hansmire pledged to pay back the money at an interest rate of 12 percent.
The Connecticut Department of Banking found that the men defrauded or misled investors in violation of the state’s securities law and that they had failed to register the promissory notes they sold to investors and to notify them of the risks associated with the loans. In June 2015, they were ordered to stop seeking investments and to pay an undisclosed amount in restitution. Quesnel failed to pay.
Hansmire’s settlement agreement admitted no fault but acknowledged the evidence against him. He agreed to pay restitution and not conduct certain types of finance-related business in Connecticut ever again. At the time, he said he didn’t have enough money to reimburse investors, but later paid two of them $63,000, according to the Connecticut Banking Department.
To learn more about Hansmire’s business and legal woes, dating back to the 1990s, click HERE for ProPublica’s detailed account.
It would be interesting to hear Landry explain what he meant by “quid pro quo,” and why he, as Louisiana Attorney General, chose to back a fraudster’s grift.
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