Th3Branded0ne
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http://www.law.com/jsp/nlj/PubArticleNLJ.jsp?id=1202428249328
In a proceeding devoid of drama, two Luzerne County, Pa., judges told a federal court judge Thursday they were guilty of accepting more than $2.6 million in kickbacks from the owner and builder of two juvenile detention centers.
Former President Judge Mark A. Ciavarella Jr. and retired Judge Michael T. Conahan sat quietly for about 75 minutes, speaking only when U.S. District Judge Edwin Kosik spoke to them. They answered in short sentences and alternated between folding their hands and resting their chins on their hands.
They pleaded guilty to both counts -- honest services wire fraud and conspiracy to defraud the United States -- in the criminal information filed against them.
Assistant U.S. Attorney Gordon Zubrod described the hearing as clearing "a major hurdle." He said Kosik will decide whether to accept the plea agreement, which requires Ciavarella and Conahan to spend 87 months in federal prison, during a sentencing hearing.
That will happen after the probation office files a presentence information report -- likely to happen within two to three months, Zubrod said.
But when that occurs the government may start to offer up additional information to support their claims.
Zubrod said the hearing will be important because Kosik is responsible for not only approving the plea agreement, but also determining restitution fees and fines and the possibility of supervisory release.
It is the government's contention that the judges' decisions to send juveniles to PA Child Care and Western PA Child Care were motivated by their business dealings with the center's owner, identified in court records as Participant No. 1, and the center's builder, identified in court records as Participant No. 2.
Ciavarella's attorney, Al Flora, has disputed the claim.
"There is nothing to suggest that the judge said, 'If you don't give me this, you're going to receive less favorable treatment,'" Flora said after news of the scheme broke. "That's the key element, and they don't have that."
If the judges continue with that line of defense, the hardball may just be beginning.
Zubrod indicated that the government will be aggressive in their stance on allegations, noting officials are attempting to interview every juvenile sentenced by the judges during the scheme and will offer testimony and additional evidence at the sentencing hearing, if necessary.
They will also use forfeiture to recover property bought with the money from the scheme, Zubrod said.
"We're going to get back every penny," he said. "We're not backing off a single syllable."
The judges are currently free on an unsecured $1 million bond, Zubrod said. The men have surrendered their passports and condominium in Florida. Neither is allowed out of state without permission.
Stacey Witalec, a spokeswoman for the Pennsylvania Department of Public Welfare, said the department's records show attorney Robert J. Powell, of The Powell Group in Drums, Pa., and Western Pennsylvania investment banker Gregory R. Zappala were owners of PA Child Care. Powell sold his interest in the company to Zappala last year, Witalec said.
The Citizens' Voice, a Wilkes-Barre, Pa., newspaper, has previously identified the builder as Robert S. Mericle, owner and president of Mericle Construction Inc.
A day before the judges appeared in federal court, attorneys for Powell acknowledged he was the former co-owner of the detention centers identified as Participant No. 1.
In a letter signed by Mark B. Sheppard of Sprague & Sprague in Philadelphia, Powell's lawyers said he had been unfairly portrayed in news reports on the corruption probe.
"First, it is grossly inaccurate to suggest that our client ever sought or had any influence in the sentencing of any juvenile offender. In fact, Bob Powell never offered to pay a single penny to these former judges. Instead, Bob Powell was a victim of their demands for payment," the letter says.
The letter goes on to say that, although Powell recognizes he made a mistake by not going to authorities, he remained silent about the judges' demands because they exerted pressure on Powell and his clients.
"The record will show that despite this, Powell not only refused the Judges' continued demands for additional payments, but ultimately reported the conduct to authorities," the letter says.
The letter, also signed by Richard A. Sprague and Geoffrey R. Johnson, says Powell is continuing to cooperate with authorities and is integral to the U.S. Attorney's prosecution of Ciavarella and Conahan.
Asked if the judges had extorted anyone during their self-enrichment scheme, Zubrod said he could not comment on such an allegation.
"You're going to have to wait until we have our presentation to the court," he said.
During the hearing, Zubrod walked through the government's allegations, essentially re-reading parts of the criminal information filed at the time of the plea announcement.
Zubrod said the two judges created "an understanding among themselves" to participate in "schemes" to enrich themselves.
In January 2002, while president judge, Conahan signed a "placement guarantee agreement" with the two juvenile detention centers, Zubrod said. The decision came a month after he removed funding from the budget for the county's detention center.
Ciavarella, Zubrod said, sat on the juvenile court bench, where the "potential existed for offenders to be detained."
Rather than relaying the government's contentions that the judges made their decisions because of the kickbacks, Zubrod simply told Kosik that the two sides were in disagreement over certain facts. It was immaterial to the specific charges to which they were pleading guilty, he said, and would be argued over in court later.
All of it unfolded before a courtroom that was filled a half hour before the hearing began. When Ciavarella and Conahan arrived with their lawyers at 12:45 p.m., the crowd quickly quieted. It stayed that way until the men left at 2 p.m.
Former Luzerne County Judge Ann Lokuta, who has said she reported the judges' improper business dealings to the FBI, sat in the front row.
"I feel it's a long time coming," she said afterward. "It's just sad none of my colleagues stepped up."
Lokuta was found by the state Court of Judicial Discipline to have violated the Code of Judicial Conduct and the Pennsylvania Constitution. She was removed from the bench in December.
Lokuta testified in her trial that she told federal authorities that Ciavarella and Conahan had removed three auto accident cases from her docket on the eve of trial.
Lokuta's testimony is echoed in rumors swirling among members of the Luzerne County legal community that the U.S. Attorney's Office is investigating an alleged scheme to rig auto insurance arbitration. Martin C. Carlson, the U.S. Attorney for the Middle District of Pennsylvania, has refused to discuss the corruption probe beyond the charges already filed, but has said it is ongoing. Carlson has also called for anyone with knowledge of wrongdoing to step forward.
Since Ciavarella and Conahan were charged last month, the probe has widened to include charges against District Court Administrator William T. Sharkey Sr. Sharkey has agreed to plead guilty to charges that he diverted funds entrusted to the court that had been seized by state police from illegal gambling machines. He faces a maximum sentence of 10 years in prison.
Calls to Sharkey's attorney, Bruce Miller of Hazleton, Pa., have not been returned.
