Man accused of attempting to extort millions from Gaetz family pleads guilty to wire fraud

Tom McLaughlin
Northwest Florida Daily News

PENSACOLA — Once prominent Niceville businessman Stephen Alford has pleaded guilty in federal court to attempting to extort money from the wealthy family of U.S. Rep. Matt Gaetz.

Alford, who had entered a not guilty plea Oct. 1, changed that plea at a 2 p.m., Monday hearing in Pensacola before U.S. Magistrate Elizabeth Timothy. He pleaded guilty to one of the three counts of wire fraud he was originally charged with.

A charge of tampering with evidence was thrown out. That charge resulted from Alford destroying a cellphone before federal agents could confiscate it.

Origins of the case:Stephen Alford update: Alleged conspirator in U.S. Rep. Matt Gaetz extortion scheme indicted and arrested

Stephen Alford arrest mug from 2016

Sentencing is scheduled for 9 a.m. Feb. 16. Alford faces a maximum of 20 years in prison.

It will mark the third time since March 2006 that Alford will face prison time for a felony involving an effort to swindle big money from wealthy individuals or entities. 

As intriguing as some of Alford's past plots have been, this one may top them all. It involves a scheme to extort $25 million from former Florida Senate President Don Gaetz with the promise of a presidential pardon for Gaetz's son, Matt, a self-styled congressional "firebrand" under investigation in a sex trafficking case.

Gaetz investigated:U.S. Rep. Matt Gaetz being investigated for obstruction of justice, new reports allege

The alleged extortion attempt occurred in March, eight months after the Department of Justice opened an investigation into sex trafficking allegations involving Joel Greenberg, the former Seminole County tax collector and a Matt Gaetz associate.

Greenberg pleaded guilty in May to numerous crimes as part of a plea deal to cooperate with prosecutors, presumably in its ongoing investigation of Gaetz. One of the charges he pleaded to was that of sex trafficking of a 17-year-old girl.

No criminal charges have been filed against the younger Gaetz, and he has steadfastly and vehemently maintained his innocence. Efforts to reach him Monday were not successful.

Also figuring into the narrative surrounding the charges against Alford is Robert Levinson, a CIA operative who disappeared in 2007 and is believed to have been kidnapped by agents of the government of Iran.

Alford's version of events:Stephen Alford says he was questioned by FBI regarding Matt Gaetz extortion charge

The federal authorities who arrested Alford on Aug. 31 said he and a group of co-conspirators had dangled the presidential pardon for Matt Gaetz as a trade to Don Gaetz in exchange for him providing them the funds they needed to buy Levinson's freedom.

According to a version of events provided first by Matt Gaetz, R-Fort Walton Beach, Pensacola attorney David McGee had been among those working with Alford to extort the $25 million from the Gaetz family, and Don Gaetz had worn an FBI wire to a meeting with Alford to discuss a $5.5 million down payment. 

Don Gaetz had no comment on Alford's plea. Jeff Nieman, his attorney, did not return a phone call seeking comment. 

McGee has worked as Alford's defense attorney in at least two criminal cases, including one for which he was sentenced to 10 years in 2006. He has not been implicated in the charges filed against Alford, although references are made in the indictment to an "Attorney A" who it states met with Don Gaetz at least once to discuss the Levinson arrangement.

Also of interest:Where’s Matt Gaetz? Not in his district; ‘He’s everywhere but here’

The Alford indictment says that Alford met with the wired Don Gaetz to let him know the original $25 million to free Levinson had been negotiated down to $15.5 million and that $5.5 million was needed "up front" to secure the deal. Alford called for $1 million in cash and $4.5 million to be deposited to the account of an unnamed attorney.

"Alford falsely represented that he will 'get that pardon' for (Matt Gaetz) and falsely promised D.G. that Alford would take D.G. 'by the hand to see the President of the United States,'" the indictment said. 

The charging document goes on to state that Alford also falsely promised Don Gaetz "that I will assure you that (Matt Gaetz) will get off his problems" and that Alford could guarantee that (Matt Gaetz) would not go to prison if Don Gaetz agreed to work with him.

In the document, Matt Gaetz is referred to as "family member A."

Don and Matt Gaetz laugh as they pass each other at the dais during the groundbreaking ceremony for the Southwest Crestview Bypass.

Alford never denied approaching the wealthy Gaetz family for money. He said he, McGee, a man named Bob Kent and others were attempting to work through the Gaetzes to rescue Levinson.

"We have confidence we can obtain his release from Iran," Alford told the Northwest Florida Daily News in an April interview. "That was our only purpose for going to Don Gaetz in the first place. We realized that whoever could help us secure the release of Mr. Levinson would be a national hero. We offered Congressman Gaetz the opportunity to do so."

Although even Levinson's family has said they believe him to be dead, Alford said he and his cohorts have "proof of life" video evidence that suggests otherwise.

Alford referred to himself prior to his first arrest as a "savvy land speculator." But in July 2005 he and attorney David Fleet were taken into custody on federal charges stemming from their efforts to broker a massive land swap involving the United States Air Force and a forestry company in rural Taylor County. 

Alford and Fleet had worked for a couple of years prior to their arrests to secure a deal through which Alford would pay $500 million to buy 545,000 acres of forest land in Taylor County that he would swap with the Air Force for a handful of pristine beach parcels the military owned on Okaloosa Island. 

The Air Force wanted the rural forest land for use in testing long-range missiles. Alford and Fleet planned to sell off the beach parcels for development. 

For most of 2004, Alford was quietly marketing the Okaloosa Island land he hadn't yet obtained, and received $7 million from investor Richard Massey and $5 million from developer Thomas Becnel in exchange for an interest in the properties. 

Alford was caught selling interest in the same properties to several would-be investors, and he spent about $3 million of the funds he had received on himself and on Fleet's election campaign for county judge.

He was sentenced to 10 years in prison for crimes that included wire fraud and money laundering.

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Alford also was convicted in Okaloosa County in 2017 of criminal use of personal information and communications fraud. 

"Alford," the Okaloosa County Sheriff's Office said following that arrest, "swindled approximately $350,000 from at least one investor by promising lucrative returns for money intended for real estate ventures."

He "misrepresented real estate assets to the investor, and instead, used the money for personal use to include buying expensive jewelry, cars, and renting the luxury condominium at Destin Yacht Club, among other purchases," the Sheriff's Office said.