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Former Florida Republican chief charged with fraud

MIAMI (Reuters) - Florida’s recently ousted Republican Party chief was indicted on Wednesday on fraud, theft and money laundering charges in the latest embarrassment stemming from the party’s fundraising practices.

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Former state party chairman Jim Greer was arrested at his central Florida home on six felony counts and booked into the Seminole County Jail, the Florida Department of Law Enforcement said.

The indictment alleges that Greer, 47, collected $125,161 by arranging for the party to hire a fundraising company in which he secretly held a controlling interest.

The investigation of Greer was announced in March, just as the Republican National Party was dealing with embarrassing revelations that it spent thousands of dollars of donor money at lavish hotels and paid $1,946 for meals at a West Hollywood nightclub featuring topless dancers and bondage themes.

Florida Republicans quickly distanced themselves from Greer. Attorney General Bill McCollum, who is seeking the Republican nomination for governor, has said he first asked the FDLE to investigate Greer after the current party chairman showed him a party audit.

Greer resigned as chairman in January amid accusations that he misspent party funds. At the time he said he had been wrongly accused by conservatives who were conducting an ideological purge that threatened to split the party ahead of crucial November elections.

Greer has alleged that the party reneged on an agreement to pay him a generous severance package in exchange for keeping quiet about the financial irregularities, something party officials have denied.

Florida Democrats said Greer’s arrest showed that new leadership is needed in the state where Republicans control both houses of the legislature, but have recently seen several members indicted or under investigation.

“Floridians are forced to watch the car wreck that has become the Republican Party of Florida and wonder which GOP party boss or elected official will be taken off in handcuffs next,” state Democratic Party Chairwoman Karen Thurman said.

Greer was picked to lead the state Republican Party by Governor Charlie Crist, who has since bolted to run as an independent in the U.S. Senate race. Polls suggested the more moderate Crist would have lost the party nomination to Marco Rubio, who has strong support from conservative Republicans.

The indictment said Greer formed a company called Victory Strategies in February 2009 with minority owner Delmar Johnson and arranged for Johnson to be the sole signatory on the company’s bank account.

The party then hired Victory Strategies and paid it $199,254, much of it for fundraising services that were never performed, and $125,161 of that was funneled to Greer, the indictment said.

Greer also appointed Johnson as executive director of the Florida Republican Party and told him that the two of them would take 10 percent of all major donor fundraising coming into the party and split it, the indictment alleged. Johnson has not been publicly charged and it was unclear whether he was cooperating with prosecutors.

Editing by Vicki Allen