Former Louisiana State Senator Charged With Wire Fraud

She allegedly used campaign funds to fund her gambling addiction

Louisiana state Sen. Karen Carter Peterson speaks onstage at the 2016 ESSENCE Festival Presented By Coca-Cola at Ernest N. Morial Convention Center in New Orleans on July 1, 2016. Paras Griffin/Getty Images for 2016 Essence Festival

Former Louisiana state Sen. Karen Carter Peterson, a Democrat, was charged with one count of wire fraud by federal prosecutors on July 14 for her alleged role in a scheme involving using campaign funds to fund her gambling addiction.

Peterson served as Louisiana state Senator for the 5th District from 2010 until 2022 and as the Chair of State Political Party A between 2012 and 2020.

According to prosecutors, Peterson formed and maintained the “Karen Carter Peterson Campaign Fund” (KCPCF) to solicit and raise campaign funds from individual and corporate donors under the pretext that those funds would be used to help in her reelection for state senator.

However, prosecutors said that Peterson instead diverted, and caused her friends and associates to divert, campaign funds from the KCPCF to the lawmaker’s own personal use.

These activities took place over nearly seven years, according to prosecutors, and the scheme saw Peterson write out checks on the KCPCF account to her friends and associates before directing them to cash the checks and return most or all of the money back to her, prosecutors said.

Peterson then used the money for personal expenses unrelated to her campaign, including to pay gambling-related expenses, prosecutors said.

She is also accused of filing false or misleading campaign finance reports that mischaracterized expenses as legitimate campaign-related purchases when they were instead unrelated to the campaign and for her personal use.

The former Louisiana state Senator told Louisiana television station WWL-TV in March that she had a gambling addiction.

‘I’ve Been Suffering’

“I’ve been suffering with this disease for over 25 years and there have been peaks and valleys in the recovery phase,” Peterson said. “There is a lot of guilt and shame and embarrassment associated with it.”

Peterson resigned from the Louisiana Legislature in early April, citing her battles with depression and gambling addiction as reasons for the move.

The former Senator was charged Thursday, and if found guilty will face a maximum of 20 years behind bars, a fine of up to $250,000, and up to three years of supervised release.

In a statement on social media on July 14, Peterson apologized for her actions.

“Today marks an important step in my life-long recovery as I continue to address my gambling addiction. I sincerely apologize for the impact from my compulsive behavior resulting from this addiction.”

“I have made full repayment of funds used as a result of my addiction and I will continue to make amends,” she continued. “Staying true to the steps of my ongoing recovery, I have been forthright, honest, and fully cooperative with the US Attorneys’ Office in their investigation.”

The Louisiana Democratic Party also released a statement following the charges against Peterson, noting that she has signed a plea deal and that they “are confident that any wrongdoings will be brought to justice.”

“Since September of 2020, we have worked tirelessly to increase transparency and transform operations to turn this into an organization that will stand the test of time,” the statement read. “Restitution has been made on behalf of Senator Peterson, which allows us to close that chapter of the Louisiana Democratic Party as we work to restore public trust and move into a more promising future. We are proud of the progress we have made so far, and we believe we are well on our way to becoming the Democratic Party that Louisiana deserves.”