The District’s Council Chairman, Kwame Brown is the latest leader to resign from the District’s council amid financial troubles.  Brown resigned the first week of June after he was convicted of felony bank fraud and a misdemeanor involving improper campaign spending.

He has pleaded guilty to admittedly forging a name on a loan document and inflating his salary on another loan document from a 3 to an 8.  The bank fraud charge carries a maximum penalty of 30 years in prison, although he has entered into a plea deal, which may grant him less time behind bars.  He may have to spend at least six months in prison when he is sentenced on September 20^th.

Brown was considered a rising star among the District’s council and many thought he would ascend to become mayor after Gray left office.  However, his political career has been marred with a now sudden felony conviction that may not allow him to ever represent D.C. residents again, if voters approve the new ethics legislation that will be voted on in November.  Under the language of the legislation, residents with a felony would not be allowed to run for office or serve on the District’s council.

In the height of the market, Brown and his wife purchased a home in the Hillcrest neighborhood of Ward 7, for a little over $300,000.  Shortly after he applied for a home equity line of credit, where he forged the loan document in order to take out a line of equity.  He did it again a year later to purchase a 38-foot power boat, he named “Bullet Proof.” On the fraudulent bank statements, Brown asserted that his house was worth over $800,000 in order to get a large amount of equity for the house.

He also forged the name of a college friend on his loan document as employment verification so he could apply for the hefty home equity-line of credit from Industrial Bank.  He said he felt he had to take this step because Industrial would not approve his loan application.

The paper trail of Brown’s scheme came to a head shortly after his council chair race, when investigators begin looking into his 2008 campaign for an at-large council seat.  An audit found that he misreported over $270,000 in campaign money, instead funneling it to his brother Che Brown’s now defunct consulting firm.

Brown’s brother Che, began used the misreported money for get-out-the-vote (GOTV) efforts.  He pleaded guilty to a misdemeanor on this crime, but his brother has not been charged, although an ongoing investigation is taking place.  D.C. law prohibits cash expenditures above $50.

Kwame Brown is now the second sitting council member to resign in the first half of this year, over improper spending.  Former Ward 5 Council member Harry Thomas, Jr. stepped down in January after he was convicted of misusing money he was given for a Ward 5 children’s non-profit to make extravagant purchases for himself and take nice trips.  Thomas will serve 38 months in prison for his felony conviction.

Brown served the council a little over seven years as a Ward member, At-Large member and most recently Council Chairman.  Brown will remain a free man until his September sentencing and has agreed to cooperate with investigators.