Karen Carter Peterson, Ex-Louisiana State Senator, Gets Prison for $140K Gambling Fraud

Posted on: January 12, 2023, 08:16h. 

Last updated on: January 12, 2023, 12:00h.

Philip Conneller @casinoorgphilc Read More
Expertise: Gaming Business, Regulation, Tribal Gaming.

Former Louisiana state senator Karen Carter Peterson was sentenced to 22 months in a federal prison Wednesday. The ex-lawmaker pleaded guilty last August to plundering $140K from the state Democratic Party and her own campaign fund to feed a crippling gambling addiction.

Karen Carter Peterson
Karen Carter Peterson, above, was a prominent Louisiana Democrat until her dramatic fall from grace last year. (Image: Nola.com)

Peterson was first elected to the state legislature in 1999 and was chair of the Louisiana Democratic Party from 2013 to 2020. She resigned last April, acknowledging she had struggled with depression and gambling addiction for her entire political career.

Peterson’s offenses coincided with her tenure as chair of the party. They involved “depositing checks, cashing checks, and withdrawing cash from financial institutions, and then transmitting the funds to Peterson for her own use,” according to court documents.

‘Imperfect Child of God’

As party chair, Peterson supervised permanent staff, including individuals who had signatory authority over the financial accounts. She worked with at least six accomplices, cutting them checks for bogus campaign services. After cashing them, these individuals, who have not been charged, then returned most of the money to Peterson, prosecutors said.

“I want to tell everyone who contributed to my campaign and the Democratic Party, I am sorry,” she said prior to her sentencing. “This criminal case against me is what it finally took to get healthy. I have changed my life.

“People trusted me to do what was right, and I failed,” she added. “I am an imperfect child of God.”

Peterson’s lawyers pleaded for clemency, emphasizing that their client had kicked her gambling habit and was now committed to helping other problem gamblers. They asked for a sentence of probation or home confinement.

Lead prosecutor, Assistant U.S. Attorney Jordan Ginsberg, said such a move would send “precisely the wrong message to would-be corrupt public officials, as well as donors and voters.”

Ultimately, the 22-month sentence was roughly half of the term called for in federal sentencing guidelines.

Media Leak

Public attention was first drawn to Peterson’s gambling problem in March 2019. That’s after a story broke in The Advocate, Louisiana’s largest daily newspaper, that she had received a misdemeanor summons for entering L’Auberge Baton Rouge Casino while self-excluded.

At the time, Peterson criticized whoever had leaked her involvement in the state self-exclusion program, which should be confidential.

She later ousted former longtime chairman of the Louisiana Gaming Control Board Ronnie Jones from his position.

Jones, who was 30 years in the job, told The Advocate he wasn’t responsible for leaking the story to the press and had repeatedly tried to meet with Peterson to explain that.