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FBI arrests Birmingham, Alabama, mayor

  • Story Highlights
  • Larry Langford engaged in fraud, bribery, indictment says
  • Investment banker and lobbyist also named in indictment
  • Prosecutor describes "web of financing agreements" among the three
  • Langford attorney says he told Langford not to talk to media and "he's got a city to run"
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(CNN) -- The FBI on Monday arrested the mayor of Birmingham, Alabama, on federal charges including conspiracy, bribery, fraud, money laundering and filing false income tax returns.

Mayor Larry Langford, right, appears at a news conference Monday in Birmingham, Alabama.

Larry Langford, 62, is named in an indictment that alleges criminal activity while he was a county commissioner, said U.S. Attorney Alice Martin.

As president of the Jefferson County Commission and head of its department of finance and general services from November 2002 until about November 2006, Langford put his personal affairs ahead of those of the county, Martin said.

"Our investigation has revealed, and the indictment alleges, that Langford sold his public office to his friends and political supporters," Martin said.

Also named in the 101-count indictment are William Blount, 55, a Montgomery, Alabama, investment banker, and Albert LaPierre, 58, a Birmingham lobbyist, neither of whom returned calls from CNN.

"Langford steered lucrative business to William Blount and his company and he, in turn, earned in excess of $7.1 million and, with the help of lobbyist Albert LaPierre, they ensured that Larry Langford's crushing personal debts were paid off through payoffs of loans, store charge accounts, purchases of clothing and jewelry and other items of value that exceeded $230,000 over a period from 2002 to 2006," Martin said.

The allegations go back to a 1996 consent decree entered into by the commission to bring Jefferson County into compliance with the Clean Water Act, which required authorizing billions of dollars in transactions.

After making his first appearance in U.S. District Court on Monday, Langford appeared outside the courthouse with his lawyer, who said he had told his client not to talk to reporters.

"He's got a city to run and right now, or very shortly, he's headed back to City Hall," the lawyer said.

An indictment on some counts was returned in June to ensure they were not rendered moot by a five-year statute of limitations, Martin said.

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The superseding indictment returned last Tuesday by a federal grand jury was unsealed Monday after Langford's arrest. The other two men named in the indictment agreed to turn themselves in, she said.

Langford conspired with Blount and LaPierre "to solicit and to accept bribes, to use influence and position to ensure that Blount and his company, Blount Parrish Inc., was involved in Jefferson County's bonds and swap transactions related to multibillion-dollar sewer debt," Martin said.

Though the financing was set up by then-big financial institutions -- including J.P. Morgan, Goldman Sachs, Lehman Brothers and Bank of America -- "Langford used his position to make it a condition that those financial institutions include Blount Parrish in the financing deals and paid Blount Parrish a fee in order to get the county financing business," Martin said.

She cited an October 2003 financial transaction that included Bank of America and Lehman Special Financing Corp. that required Lehman to pay an "arrangement fee" of $35,000 to Blount's company.

In all, she said, Blount and his company received $7.1 million in fees related to Jefferson County's financial transactions.

In turn, Blount paid lobbyist LaPierre approximately $219,000 for "consulting fees," Martin said.

She added, "Through a web of financing agreements, Langford required many institutions to use Blount as a consultant so Blount would make fees and in turn pay off Langford. It was a classic pay-to-play scheme."

Martin said Blount and Langford traveled together to New York, where Blount bought Langford clothing and jewelry from high-end stores that included Tourneau, Zegna, Ferragamo and Turnbull & Asser.

In addition, Blount bought Rolex watches and other jewelry for Langford from a Birmingham store, Martin said.

Federal authorities are seeking criminal forfeiture of about $7.6 million from each of the men.

Langford is named in 60 counts of the superseding indictment; Blount in 43 counts; and LaPierre in 22 counts.

In addition to the fines, each defendant would face a maximum of 10 years for each bribery and money-laundering count, 20 years for each fraud count, five years for the conspiracy count and three years for each tax count.

In a written statement, the mayor's office said city business will continue as usual.

"We are glad the mayor will finally have his day in court," said Langford's chief of staff, Deborah Vance-Bowie. "As members of his team, we stand behind him and look forward to the day when we can return the focus to the important issues before the city."

A public information officer said the president of the current five-member Jefferson County Commission, Bettye Collins, would have no comment

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