Lobbyist Jack Abramoff (search), a key figure in investigations involving House Majority Leader Tom DeLay (search), was indicted Thursday by a federal grand jury on fraud charges arising from a 2000 deal to buy casino boats.

The indictment, returned by a grand jury in Fort Lauderdale, charges that Abramoff and an associate, 36-year-old New York businessman Adam Kidan (search), used a fake wire transfer to defraud two lenders out of some $60 million to finance the deal for SunCruz Casinos.

Abramoff and Kidan are charged with five counts of wire fraud and one count of conspiracy to commit wire fraud and mail fraud. Each count carries a penalty of up to 5 years in prison and a $250,000 fine.

Abramoff was taken into FBI custody late Thursday afternoon in Los Angeles and will spend the night in a federal detention center, said bureau spokeswoman Cathy Viray. He was set to appear Friday in federal court in Los Angeles. Kidan's attorney in Florida, Martin Jaffe, said his client would surrender to authorities in Fort Lauderdale on Friday.

Abramoff's Miami attorney, Neal Sonnett, said he had not been informed of any charges but said that Abramoff, 40, did not commit fraud. Abramoff had previously been notified that he was a target of the investigation.

"We were hopeful we'd be able to convince the prosecutor not to file charges because he was not involved in fraud involving SunCruz," Sonnett said.

"I did nothing wrong and these allegations are totally unfounded," Kidan said in a statement.

The partners bought SunCruz (search), which runs a fleet of gambling boats, from entrepreneur Konstantinos "Gus" Boulis for $147 million in 2000, but the deal soon fell apart. Amid bitter legal fighting over the sale, Boulis was shot to death five months later in 2001 what police called a hit. The Fort Lauderdale killing has never been solved.

The indictment against Abramoff charges that he used income from SunCruz to finance political fund-raising activities, including events at private boxes at Washington-area sports venues such as the MCI Center and Oriole Park at Camden Yards.

The two lenders who were allegedly defrauded in the SunCruz deal were Foothill Capital Inc., a subsidiary of Wells Fargo, and Citadel Equity Fund Ltd., based in the Cayman Islands, according to court documents in a civil lawsuit.

Abramoff is also under federal investigation in Washington by a grand jury investigating whether he and a lobbying partner overcharged Indian tribes by millions of dollars for their work.

DeLay, R-Texas, was not mentioned in any lawsuits involved in the SunCruz deal.

DeLay has asked the House Ethics Committee to review allegations that Abramoff or his clients paid some of DeLay's overseas travel expenses. DeLay has denied knowing that the expenses were paid by Abramoff, whom he once described as "one of my closest and dearest friends."

Abramoff collected more than $100,000 for President Bush's 2004 re-election campaign and raised thousands of dollars for DeLay and other Republican members of Congress. He also was friends with former Christian Coalition leader Ralph Reed, now a Republican candidate for lieutenant governor in Georgia.

The SunCruz fleet of 11 ships had 2,300 slot machines and 175 gaming tables and sailed from nine Florida ports and Myrtle Beach, S.C., to international waters. The company continues to operate gambling cruises under new ownership after emerging from bankruptcy.

Boulis also founded the Miami Subs restaurant chain.