Former "Operation Lost Trust" figure Bob Kohn was found guilty of mail fraud Wednesday, 20 years after he was caught up in the infamous FBI sting of the S.C. Legislature.
The conviction means Kohn likely will return to prison, possibly facing as many as three years. The jury at the federal courthouse in Charleston deliberated for about an hour.
Kohn, 65, of North Charleston was accused in an insurance scheme of helping a Summerville maritime pipe-fitting and welding business lower its workers' compensation rates, beginning around 2002.
In the plot, Kohn reportedly helped Knight's Services with its annual insurance submissions to the Companion Property & Casualty Insurance Co., mainly by under-reporting the business' payroll size. The effect was to lower its insurance rates.
The most convincing part of the prosecution's case, Assistant U.S. Attorney Winston D. Holliday Jr. said Wednesday, was a description of Kohn standing over the shoulder of a company secretary and telling her which employees to "peel-off" in an attempt to report the smaller payroll.
In one year, Knight's payroll size fell from $600,000 to $60,000, Holliday said. For the 2004 year, the company had a payroll of more than $1 million but only reported about $173,000. The overall effect saved Knight's about $370,000 in premiums over three years.
Kohn faces a maximum 20 years in prison, but under federal sentencing guidelines, Holliday estimated his jail time could be about three years. And while the former state representative's "Lost Trust" conviction is likely to be mentioned in the pre-sentencing report done for all federal defendants, the case was so long ago that it may not be a factor in determining his prison time. U.S. District Court Judge P. Michael Duffy this week had prevented the sting from being mentioned unless Kohn opted to testify. He chose not to.
Kohn's attorney, John Simmons of Columbia, could not immediately be reached for comment.
The sentencing will come at a later date.
Kohn was a state House member from North Charleston in 1990 when he became a target in the FBI's corruption sting of the Legislature. For months, government agents videotaped lawmakers taking bribes from lobbyist and informant Ron Cobb to support a pari-mutuel horse track betting bill.
Once confronted, Kohn agreed to cooperate in bringing down other lawmakers and was ultimately sentenced to 15 months behind bars. In all, 27 people -- 17 of them lawmakers -- were convicted or pleaded guilty to drug or corruption charges.
Kohn's involvement in the insurance fraud was uncovered after an 18-year-old employee of Knight's was killed in December 2005 during a below-decks sewer tank accident on a ship being refitted at Detyens Shipyard. Four others were injured.
Company head Roy Knight earlier pleaded guilty to his role in the fraud. He too will be sentenced at a later date.
Reach Schuyler Kropf at 937-5551 or firstname.lastname@example.org.