Anchorage Daily News

New information filed late Thursday by federal prosecutors says Sen. Ted Stevens made more than $100,000 in profit off a Florida real estate deal after a friend secretly loaned him $31,000 interest-free to buy a condominium.

The condo deal came to light in a motion describing what sort of evidence federal prosecutors plan to introduce in their case against him.

Stevens, 84, was charged last month with failing to disclose more than $250,000 in gifts from the former Alaska-based oil services company, Veco Corp. The trial is scheduled for September.

Stevens failed to report the personal loan in the condo deal when he filed his 2001 Senate financial disclosure forms, prosecutors said in their motion.

Court filings filed late Thursday also reveal other new evidence that prosecutors intend to use to prove Stevens didn't just make innocent paperwork mistakes when he failed to disclose the value of Veco's renovations to his Girdwood home.

They say he also failed to disclose that Bill Allen, the former Veco CEO, installed a backup generator -- at Stevens' home and at the senator's request -- that Stevens never paid for.

In the same motion, prosecutors also allege Allen provided a new Jeep Cherokee to Stevens' daughter in 2005 and that Stevens asked Veco for help getting a job for an unnamed son and grandson.

There are "multiple instances of Allen providing, at Stevens' request, things of value to benefit two of Stevens' children and one of Stevens' grandchildren," proseuctors say.

Prosecutors said other evidence they plan to introduce will include "communications between Stevens and a personal friend that demonstrates Stevens' consciousness of guilt."

Prosecutors said in their motion that in February 2001, Stevens and his wife, Catherine, signed a contract to buy a condominum in a complex whose developers included a personal friend of the senator's.

Under the terms of the contract, the Stevenses agreed to purchase a $360,000 unit in a yet-to-be constructed building, prosecutors said. They were required to put down a 10 percent deposit of $36,000, prosecutors said.

But Stevens paid only $5,000 at the time, prosecutors said. The remaining $31,000 was paid for instead by Stevens' friend, who prosecutors said wrote a check to an escrow company "under the name and for the benefit of Theodore and Catherine Stevens." The check was written April 9, 2001, according to the motion. The friend is not named.

On Aug. 21, 2001, prosecutors said Stevens' friend wrote him a letter saying that the company had found a buyer for the "garden apartment" who was willing to pay $515,000. Stevens could expect to profit by $129,250 from it, his friend wrote, and "specifically referenced the fact" that they had covered the $31,000 shortfall on the deposit for the Stevenses, prosecutors said.

It was only after they had an agreement to sell the condo that Stevens repaid the $31,000 deposit, prosecutors said. On Sept. 12, 2001 (the day following the terrorist attacks) prosecutors said that Stevens asked someone on his Senate staff to send a $15,000 check drawn on his personal checking account to the development company. Prosecutors said that Stevens asked for a second check of $16,000 to be sent on Dec. 11, 2001.

Senate ethics rules requires that senators disclose any liabilities greater than $10,000, and Stevens did not disclose the personal, interest-free loan, prosecutors said.

"Although Stevens' knowingly carried debt on a $31,000 interest-free loan from a personal friend for more than 10 months during 2001, Stevens did not list such a liability on his 2001 financial disclosure form."

His financial disclosure from 2001 does, however, show that he owned real estate in Aventura, Fla., valued between $100,000 to $250,000. Aventura, a beach town, is between Miami and Fort Lauderdale.

The condo flip described by prosecutors is similar to thousands of similar transacations made in Florida at the height of the real estate bubble. Those deals fueled a paper real estate boom that eventually crashed and led to one of the highest foreclosure rates in the nation and a decline in property values.

Many people made money by putting a deposit on an condominum that was under construction -- or proposed. Often, before ground was even broken, the original buyers would turn around and sell the condo to a new buyer, at a substantial profit.

Prosecutors also describe a second new vehicle -- a 2005 Jeep Cherokee -- given to Stevens' daughter, Lily. Back in 1999, Bill Allen, then the chief executive of oil field and construction company Veco Corp., bought a new Land Rover Discovery and traded it to Stevens for a 1964 Mustang and $5,000, the indictment against Stevens says. Prosecutors say it was worth much more. Stevens wanted it for his dependent child, the indictment says. Then, in 2005, Allen and Stevens started talking again about the Land Rover, the new filing says.

"Allen offered to get Stevens' daughter a new car in exchange for the 1999 Land Rover, and Stevens agreed," prosecutors assert. Allen talked more with Stevens and his daughter and agreed to buy a red 2005 Jeep Grand Cherokee and trade it to the daughter, the filing says.

"Although the 1999 Land Rover transaction was between Allen and Stevens, the 2005 automobile transaction occurred instead between Stevens' daughter and a Veco employee, for the purposes of hiding Allen's involvement in the transaction," the court document says.

On July 15, 2005, Allen wrote a personal check for $35,000 to the employee, the document says. The same day, the employee wrote a personal check to an Alaska car dealership for the Cherokee. The SUV was registered to the Veco employee and shipped to Seattle by Veco.

According to prosecutors, Veco then flew the employee to Seattle to pick up the vehicle and drive it to Berkeley, Calif. Lily Stevens went to law school there.

The prosecutors say Stevens transferred the title of the Land Rover to his daughter on Aug. 1, 2005. On Sept. 1, 2005, his daughter transferred the Land Rover, along with $13,000, to the Veco employee in exchange for the Cherokee, prosecutors say. But the Land Rover was worth just $9,000 by then, the filing says.

Erika Bolstad reported from Washington and Lisa Demer from Anchorage.

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