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Monday, February 28, 2011

Corrupt 'Kids for Cash' Judge Does Not Deny He's 'A Scumbag'

Grieving Mom Becomes Symbol After Tirade Against Judge in 'Kids for Cash' Scandal
The Associated Press - February 28, 2011

Sandy Fonzo hadn't planned on confronting the Pennsylvania judge whom she blames for robbing her late son of his chance at a happy, productive life. Her emotional, obscenity-laced outburst last week - caught on video and spread over the Internet - has come to symbolize the anger felt by parents whose children were railroaded by Mark Ciavarella, the former Luzerne County judge convicted Friday of racketeering in a $2.8 million "kids for cash" plot to send youth offenders to for-profit detention centers. Fonzo's son was 17 and an all-star wrestler with a chance at a college scholarship when he landed in Ciavarella's courtroom on a minor drug paraphernalia charge. Though the teen, Edward Kenzakoski, had no prior criminal record, he spent months at the private lockups and a wilderness camp and missed his senior year of high school. Kenzakoski emerged an angry, bitter and depressed young man. He committed suicide last June at the age of 23. "He was just never the same. He couldn't recover," Fonzo said Tuesday. "He wanted to go on with his life, but he was just hurt. He was affected so deeply, more than anyone knew." Fonzo was at work Friday when friends started texting her about the verdict in Ciavarella's federal racketeering trial - guilty on 12 of 39 counts. She rushed to the courthouse because she had heard that Ciavarella was going to be taken out in handcuffs. Instead, the disgraced judge was allowed to remain free pending sentencing. Ciavarella and his lawyers walked out onto the courthouse steps on a brilliant, unseasonably warm day and declared victory. "He never took a kickback, he never took a bribe. ... This is not a 'cash for kids' case, and we hope that someone starts getting the message," said Ciavarella's attorney, Al Flora, referring to the fact that jurors had acquitted his client of many of the charges. Fonzo, who had been standing in the media scrum, lost it. "My kid's not here anymore!" she screamed. "He's dead! Because of him! He ruined my ... life! I'd like him to go to hell and rot there forever! Do you remember me? Do you remember me? Do you remember my son, an all-star wrestler? He's gone. He shot himself in the heart. You scumbag!"

Ciavarella kept his back to Fonzo as she yelled, glancing at her only when she tapped him on the shoulder. Then he turned his back again and walked down the steps. "I don't know that lady," he told reporters. "I don't know what the facts and circumstances are concerning her son." Fonzo said Tuesday that she couldn't help but lash out. "They were all having a wonderful day and they thought they had a victory. My son's not here, and (Ciavarella is) on his way out and it's a beautiful day and he's going to enjoy it with his family," she recalled. "I just had enough of them and I just couldn't control myself." Prosecutors alleged that Ciavarella and a second judge took more than $2 million in bribes from the builder of the PA Child Care and Western PA Child Care detention centers and extorted hundreds of thousands of dollars from their owner. Ciavarella sent youth offenders to the private lockups while he was taking payments, ordering detention for minor offenses and routinely depriving juveniles of basic legal protections, including the right to counsel, according to a government panel that investigated the scandal. The Pennsylvania Supreme Court threw out some 4,000 convictions issued by Ciavarella. Fonzo said it galled her that Ciavarella continued to deny responsibility even after his conviction. The dramatic, disturbing video of her confrontation with the judge has sparked the interest of several national media outlets. She's scheduled to appear on NBC's "Today" show. "The pain was just raw," she said. "Even if he didn't think he was to blame, wouldn't you turn around and just say, I'm sorry for your pain? ... He wouldn't even look at me until I tapped his shoulder." Marsha Levick, co-founder and chief counsel of the Philadelphia-based Juvenile Law Center, which blew the whistle on Ciavarella's harsh treatment of juveniles years before he was charged, said virtually no other judge would have ordered Fonzo's son to be locked up on such a minor charge. She said her outburst gave voice to the families hurt by Ciavarella. "Her personal story tells everybody else what happened in ways that lawyers can't," said Levick, whose firm represents Fonzo and other parents and children in a civil lawsuit against Ciavarella. "It was this horrible, gut-wrenching expression of grief." Fonzo said she's been inundated with supportive messages from around the country. She hopes to rally hundreds to show up at Ciavarella's sentencing. "If I could get all the kids, all the families, all the friends, everybody affected, and have hundreds of people wrap around that whole courthouse and have Ciavarella have to walk through us and see all these faces and hear the voices of what he's done, maybe that'll be an impact on his sentencing," she said.

Friday, February 25, 2011

Shining A Bright Light on Corruption Exposes The Legal Community

A Blank Check for Cleaning Up Madoff’s Mess
The New York Times by Floyd Norris - February 24, 2011

Financial frauds tend to follow predictable paths after they are uncovered. At first, there is outrage and a determination to find and punish the villains. But passions fade and investigations run into ambiguities. Those with the most money to protect — typically accountants or banks whose knowledge of the fraud is at best debatable — fight to avoid legal liability. Government investigators eventually move on to other cases, and victims seeking revenge and compensation conclude that there is little point to spending more money to pursue uncertain suits. Settlements are reached on terms defendants can live with. But the Bernard L. Madoff fraud is proving to be different, and not just because Mr. Madoff ran by far the largest Ponzi scheme ever encountered. This time those pursuing the investigation have no other case to move on to, and no need to worry about costs. They can spend what they want, with the cost ultimately borne by some of the same Wall Street firms they are suing. That spending has risen to levels that would be unthinkable if this were a normal case. Through the end of last year, the trustee appointed by the Securities Investor Protection Corporation had spent $228.3 million — and that does not count the money that has gone to victims. Baker Hostetler, the law firm representing the trustee, received most of the money.

SIPC (pronounced SIP-ick), a Congressionally chartered company that finances itself from assessments levied against brokerage industry revenue, estimates that it will spend a further $1.1 billion on the case. That is equal to the entire annual budget of the Securities and Exchange Commission. That Madoff investigation has produced a lot of information about how Wall Street operated and about the extremely limited influence of those who were looking for signs of fraud. Red flags were seen, but discounted. Surely there were explanations other than fraud, and anyway, there were profits to be made. In one case disclosed this week, the trustee, Irving H. Picard, asserts that some people at Citigroup were suspicious that there might be fraud, but reassured themselves with a different — if equally illegal — explanation for the consistently good returns Mr. Madoff reported. Maybe his legitimate business, which handled a large volume of stock trades, was profiting from front-running customer orders, buying stocks that were about to have big buy orders and then selling them at a profit. It did not hurt that Mr. Madoff’s trading operations were well known on the street, and thought to be highly profitable. Only lately have we learned that those profits ended some years ago.

From 2000 through 2007, the trading business reported profits of $324 million. SIPC, having gone through bank records, says almost exactly twice that was stolen from investors in the Ponzi scheme and diverted to the brokerage business. Citi was not where Mr. Madoff had his banking accounts. That was JPMorgan Chase, which is also being sued by Mr. Picard. If all Citi ever did was run a bank, it would be nowhere near this case. But there were other ways to make money off Mr. Madoff. He generated good, but not great, profits year after year. He never lost much money, even when the market was tanking. So some investors figured they could get fabulous returns by using leverage. That was where several banks, including Citi, came in. They would structure derivative securities that let people get multiples of the profits Mr. Madoff generated — less some very nice fees for the bank, of course. The risk for the banks came in the fact they would have to pay out a lot of money if Mr. Madoff continued to have great results. So they “hedged” their exposure. That is a nice way of saying they invested in hedge funds that served as “feeder” funds for Mr. Madoff. The profits on those investments would offset their exposure. They were taking on no risks, or so they thought. The banks put in terms specifying they had no responsibility for any fraud that might be discovered.

In late 2008, with the credit crisis destroying almost everyone else’s returns, Mr. Madoff kept reporting good profits. Some banks cashed in their stakes — leaving them exposed if the returns were real but producing cash they may have felt was needed at the time. Those transactions strike Mr. Picard as highly suspicious. He has not found any smoking-gun e-mails showing the banks knew Mr. Madoff was a fraud, but he still wants to get the money they took out and distribute it to other investors who lost money in the Ponzi scheme. The trustee has found plenty of evidence that there were people at the banks who had reason to be suspicious, and who at one point or another wrote that the Madoff operation looked fishy. There were ways to check out the suspicions, but no one wanted to needlessly offend Mr. Madoff. One memo cited by the trustee said Citi was looking for someone who “could call Bernie ... without ruffling his feathers.” Why were the banks so oblivious? For some legal purposes, that may not matter. The trustee claims that they knew or should have known Mr. Madoff’s operations were fraudulent, and with hindsight it is hard to argue with that conclusion. But at the time I suspect the power in the banks lay with those who brought in revenue — such as by structuring the Madoff derivatives — and not with those who raised arguments against them. At the same time, the same banks were overriding qualms of those who thought they were making too many risky loans.

Mr. Madoff’s Ponzi scheme collapsed for the reason that all such schemes eventually fail: he could not raise enough new money to cover the withdrawals being made by earlier investors. To the extent the bank withdrawals helped to bring about the collapse, perhaps they do deserve credit, after a fashion, for ending the fraud. SIPC is involved in the case because Mr. Madoff ran his fraud through a registered broker-dealer, and investors were treated as customers of that brokerage firm, which had SIPC insurance that covered up to $500,000 per account in losses. This fraud is costing more than the total of all the other cases SIPC has handled in its 40 years of existence, and has generated a fair degree of controversy. Mr. Picard, backed by the bankruptcy judge, says SIPC insurance covers losses only for investors who put more money into the Ponzi scheme than they took out. Others benefited from the scheme, even though they did not know it, and except for hardship cases he wants them to pay the money back. At the end, Mr. Madoff’s customers had combined fictional positive balances of $73.5 billion. Amazingly enough, Mr. Madoff had allowed some customers to borrow more than $8 billion from the funds at low cost. If he had been running a legitimate operation, that would have made earning good returns for other investors even harder. The investors who borrowed have been forced to repay the loans. One, the estate of Jeffry Picower, a wealthy trader, agreed to a settlement of $7.2 billion. The trustee estimates that investors lost a net $20 billion. It now appears that they might be able to get it all back, particularly if the banks agree to substantial settlements. If that happened, it is possible that the net winners, who were victims of a fraud since they were told they had money that did not exist, might also get some money.

Mr. Picard appears to be a man on a mission. “We believe,” Stephen P. Harbeck, the president of SIPC, told me this week, “that rigorous pursuit of people responsible for brokerage firm failures sends a very important message.” He added that Mr. Picard “has the resources to conduct a serious and intense legal campaign.” Before this happened, SIPC thought it was fully funded, and charged brokerage firms only $150 a year. Now it charges them a quarter percent of net revenue — bringing in more than $400 million a year — and it is likely to keep doing that until it has $2.5 billion on hand. At last report, it had $1.2 billion, slightly more than the amount it expects to spend on the Madoff case in coming years. For now, anyway, major banks and Fred Wilpon, the owner of the New York Mets and a sophisticated investor who managed to take out much more than he invested with Mr. Madoff, are vowing to fight what they view as outrageous suits by Mr. Picard. It will be interesting to see if they stick to that position. If so, the banks could find themselves in the unfortunate position of having to pay for both sets of lawyers — one directly and the other through SIPC assessments — in trials that promise to be both expensive and embarrassing.

Thursday, February 24, 2011

"Kids For Cash" Horror- A Lesson in Prosecuting Public Trust Corruption

Legal Intelligencer: Ciavarella prosecutors kept it simple
The Legal Intelligencer/The Pittsburgh Post-Gazette - COMMENTARY - February 21, 2011

The racketeering trial of former Luzerne County Common Pleas Judge Mark A. Ciavarella startled many observers by proceeding at what seemed like warp speed. The dispatch with which federal prosecutors made their case against the judge in the "kids-for-cash" trial stands in vivid contrast to the glacial pace of other political corruption trials, like that of former Democratic state Sen. Vince Fumo and the Bonusgate trials. The cases are unrelated, but the contrasts among them may provide lessons for prosecutors, defense counsel and citizens. The Ciavarella trial climaxed Friday when a federal jury returned guilty verdicts on racketeering charges and 12 of 39 total counts. Mr. Fumo's trial, by contrast, required five months to complete. (Jurors convicted him on 137 counts.) In the most high-profile Bonusgate case, former state Rep. Mike Veon, of Beaver County, was convicted in June on 14 of 59 counts after nearly six weeks of testimony. Another Bonusgate defendant, state Rep. Sean Ramaley, was acquitted on all counts in the first trial stemming from the attorney general's probe of alleged improper payments to legislative aides for political work. Mr. Ramaley's trial required only four days of testimony. The Bonusgate cases, unlike the prosecutions of Mr. Fumo and Judge Ciavarella, were tried in state courts by the state attorney general, not in federal court by U.S. attorneys. Prosecutors in the Ciavarella case, led by Assistant U.S. Attorney Gordon Zubrod, pursued a strategy of keeping the case straightforward -- emphasizing allegations that payments were made by the owners of two private juvenile detention facilities and de-emphasizing the process of sending minors to the facilities. Mr. Zubrod's decision had the effect of avoiding mini-trials on individual cases handled by Mr. Ciavarella.

Mr. Fumo's trial, in contrast, was a wide-ranging examination of every aspect of the former senator's office management, with forays into his personal life and even home improvement. More to the point, many of the main counts against Mr. Fumo included honest services fraud, which has been criticized as being vague, and at best remains elusive, especially to non-lawyers who serve on juries. In June, the U.S. Supreme Court, in the case of convicted Enron executive Jeffrey Skilling, said that honest services fraud could only be alleged in cases of bribery and kickbacks. Bribery and kickbacks are certainly at the heart of the case against Mr. Ciavarella. And he is charged with honest services fraud. Because he can point to money changing hands, Mr. Zubrod had the advantage of trying his case after the U.S. Supreme Court in the Skilling case focused on the honest-services fraud statute. Mr. Fumo's prosecutors, led by Robert Zauzmer, tried their defendant in the absence of direction from the Skilling court. They therefore had to draw a picture of an office where there was no proper line drawn between personal services to the former senator and work in the interest of constituents. Mr. Zauzmer's case at the end of the day was convincing to a jury that returned guilty verdicts on all 137 counts. In the Fumo case, it seems, the slow building up of a mountain of evidence and allegations seemed to overwhelm Mr. Fumo's basic argument that he did nothing that ran afoul of state Senate rules. At the end of the day, jurors are looking for credibility. Credibility was what Mr. Fumo was lacking, particularly after he told jurors on the stand that he received a $1 million gift to help pay off a divorce settlement. Credibility may have been forfeited -- at least in part -- by Mr. Ciavarella when he admitted to three instances of filing false tax returns last week in a Scranton courtroom.

********************************BACKGROUND STORY ON FUMO:

Federal Jury Finds Former Pa. State Sen. Vincent Fumo Guilty on All Counts
The Legal Intelligencer by Shannon P. Duffy - March 16, 2009

After a five-month trial that was riddled with unusual twists, a federal jury on Monday convicted former Pennsylvania state Sen. Vincent Fumo on all 137 counts, delivering a sweeping victory to the federal prosecutors who accused Fumo of abusing his power to fund a lavish lifestyle on the tabs of taxpayers and a charity he created and controlled. The jury of 10 women and two men also convicted Fumo of orchestrating a massive cover-up scheme in which he instructed key staff members to systematically erase thousands of e-mails to and from Fumo, using a sophisticated method designed to make it impossible for the FBI to retrieve them when the computers were seized. Fumo's co-defendant, longtime aide Ruth Arnao, was also convicted on all charges -- 45 counts -- including conspiring with Fumo to embezzle funds from Citizens Alliance for Better Neighborhoods. Prosecutors quickly moved to revoke Fumo's bail, saying they feared that he would now flee and that he has the resources to do so. But U.S. District Judge Ronald L. Buckwalter refused, saying, "I'm not going to revoke the bail just flat out as you've suggested." In a bail hearing Monday afternoon, Buckwalter increased Fumo's bail to $2 million and ordered that Fumo post the deeds to four properties as security. But the judge refused to order Fumo to wear an anklet with an electronic monitor. Arnao's bail was also increased, to $500,000, and she was required to post the deed to her home.

Assistant U.S. Attorney John Pease had argued that Fumo is a flight risk because he has access to large amounts of cash and is facing a significant prison term. The verdict came on the heels of yet another bizarre twist in the case that, for a few hours at least, seemed to threaten the possibility of a mistrial. Proceedings on Monday morning began with a closed-door hearing on the issue of whether one of the jurors had engaged in misconduct by discussing the case on his Facebook page and via Twitter. The juror, Eric Wuest, strongly hinted in a Facebook posting on Friday that the jury had reached a verdict, saying: "Stay tuned for a big announcement on Monday everyone!" That posting prompted an emergency motion by Fumo's lawyers, who demanded that Wuest be individually voir dired to determine whether he had violated Buckwalter's instructions by discussing the case outside of court. The defense team argued in court papers that if it were found that Wuest had engaged in misconduct, he should either be removed from the jury and replaced by an alternate, or that Buckwalter should declare a mistrial. Buckwalter held a 75-minute hearing in chambers that included a 30-minute grilling of Wuest. In the end, Buckwalter concluded that Wuest was credible and that he had not engaged in conversations with any others about the case. For court watchers, the chatty juror was just another in a string of strange events in the Fumo case. A key prosecution witness, Leonard Luchko, was set to testify that he had assisted Fumo in a scheme to obstruct justice, but prosecutors changed their minds at the eleventh hour, saying they had discovered that Luchko was secretly posting comments on blogs that criticized the government and had been e-mailing extensively with the defense. The trial had also gotten off to the rockiest of starts when U.S. District Judge William H. Yohn Jr. became seriously ill during jury selection in September and was forced to step down from the case. Nearly a year before, in late 2007, Yohn held extensive hearings on a motion by prosecutors demanding that Fumo's lawyers at Sprague & Sprague be disqualified. Yohn denied the motion and allowed attorneys Richard A. Sprague, Geoffrey Johnson and Mark Sheppard to continue on the case, finding that although they suffered from conflicts of interest, all of the conflicts were "waivable" and that it was up to Fumo to decide.

In perhaps the first bizarre twist in the case, Fumo soon after dropped Sprague & Sprague, saying an outside lawyer had advised him not to waive the conflict. Fumo's new lawyer, Dennis Cogan, soon after declared that Fumo would be relying on an "advice of counsel" defense in which Fumo would argue that any destruction of evidence committed by him or his staff at his behest was the result of flawed advice given to him by Richard Sprague and Robert Scandone. In another strange twist, Sprague and Scandone were called as witnesses at the trial, but not by Fumo. Instead, both lawyers were called by the prosecution as rebuttal witnesses to contradict Fumo's claim that he had relied on their advice. U.S. Attorney Laurie Magid called the verdict a "victory for good government" and a rejection of Fumo's claim that he was simply behaving like many other senators. "'Everyone is doing this' is not a defense," Magid said. Magid said Fumo now faces a "very significant" prison term that she anticipates will be "well in excess of 10 years." Cogan vowed to file post-trial motions and an appeal and said, "This is not over." Without discussing any specifics, Cogan said he believed he has "significant" issues to raise in seeking a new trial. The jurors assembled in a courtroom on a different floor to answer questions from news reporters. "We really looked for reasonable doubt," one juror said. Another juror interjected that each charge was tied to specific documents that were introduced as exhibits in the trial and that the jury simply considered each charge separately. Several jurors commented that Fumo's personal life ‹ including his divorces and his estrangement from his daughter ‹ was a "sad" fact in the case, but had no bearing on their decision. The jurors also said they had flatly rejected Fumo's argument that his conduct was no worse than other senators', and that the prosecutors had failed to call a single senator as a witness. Instead, they said, the prosecutors had proven that Fumo broke the rules, and Fumo himself had a duty to call senators as witnesses if he was relying on the defense that such rule breaking was standard practice in the Senate. When asked for their response to Fumo's testimony, one juror focused on Fumo's remark that he had no legal duties as a senator other than to cast his votes. "How dare he?" juror Kimm Guckin said. Gov. Edward G. Rendell was an impressive witness, several jurors said, but not because of the testimony he gave under direct examination by Cogan about Fumo's reputation for hard work. Instead, the jurors said, it was Rendell's testimony under cross examination by Pease when the governor said that "rules are rules" and they apply to everyone.


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Feds Seeking Tougher Punishment For Pennsylvania Politicians Convicted On 137 Counts Of Fraud, Obstruction
The Legal Intelligencer Maryclair Dale - July 8, 2010

PHILADELPHIA, PA — U.S. prosecutors took the rare step Thursday to appeal the sentence handed down to long-powerful state Sen. Vincent Fumo in a sprawling corruption case. Fumo is serving a 4 1/2-year sentence for defrauding the state Senate, a museum and a nonprofit of millions. Prosecutors had sought at least a 15-year term for the Philadelphia Democrat, who was convicted last year of all 137 fraud and obstruction counts after a five-month trial. In an appeal filed Thursday, they call Senior U.S. District Judge Ronald Buckwalter's decision "unreasonable" and "unduly lenient." The 67-year-old Fumo was convicted last year of using the victim groups to maintain his mansion, spy on political rivals, pay for yachting vacations and otherwise support his extravagant lifestyle. "The corruption exposed in this case was breathtaking," prosecutors wrote in filing the 281-page brief. "Defendant Fumo, a 30-year member of the Pennsylvania Senate, used his control of a well-funded Senate committee and of a nonprofit organization he created and supported (Citizens Alliance for Better Neighborhoods), as well as his influence over another nonprofit institution, to support a lavish lifestyle and illegally amass political power." Fumo's appellate lawyer, Peter Goldberger, said Fumo would pursue an appeal to his conviction since the government is appealing the sentence. "We were ready to accept the conviction if they would accept the sentence," he said. Prosecutors also appealed the one-year term Buckwalter gave to ex-Fumo aide Ruth Arnao. The sentences were a fraction of the federal guidelines, which are based on the crimes and the defendant's criminal history. Prosecutors calculated that Fumo faced up to 21 to 27 years in prison, and Arnao, convicted of 45 counts, up to 10 to 12 years in prison. They also argued that Fumo's fraud topped $4 million, twice the fraud total assessed by the judge. In their brief, they also said Buckwalter failed to explain how he calculated the fraud total or sentencing range. The sentence provoked a firestorm in Philadelphia, where Fumo was perhaps the most powerful Pennsylvania lawmaker in a generation, controlling scores of jobs in and out of state government. At sentencing in July, Buckwalter praised Fumo for his "extraordinary" public service and called co-defendant Ruth Arnao "remarkable" for moving from teen mother to Fumo top aide. By comparison, U.S. District Judge William H. Yohn Jr. once called the conspiracy to destroy e-mail evidence in the case "egregious" and sentenced a low-level Fumo aide to 30 months for far fewer crimes than Arnao. At Arnao's sentencing, Buckwalter disclosed that he had expected the uproar over Fumo's sentence a week earlier. "I wasn't the least bit surprised. I knew it would be a tremendous firestorm of reaction against what I did," said the 74-year-old Buckwalter, who said he tries to live by the 19th-century virtues of "rugged individualism" and "antique courage." He called his decisions "fair, not punitive" and questioned the notion of deterrence. "There's been a whole lineup of Philadelphia politicians that have gone to jail, and it doesn't seem to deter crime," the judge said.

Lawyer For NY State Indicted in Hate Crime

Indictment in hate crime case
The Albany Times Union by Robert Gavin - February 23, 2011

Hennessey, lawyer with the state, accused of threatening woman, child

ALBANY, NY -- A longtime lawyer with the state Department of Civil Service has been indicted on 11 counts of felony hate crimes following allegations he made phone calls threatening to kill a black woman and abduct a black child and "tie him up." James J. Hennessey Jr., 58, of Albany, was allegedly "making harassing and threatening phone calls to several individuals in his neighborhood, and around the region," Albany County District Attorney David Soares' office said Wednesday. Hennessey is charged with 11 counts of second-degree aggravated harassment, a low-level felony that carries the possibility of 11/3 to 4 years in state prison for each count. The indictment contends Hennessey "anonymously called multiple individuals to threaten or harass them because of his beliefs about African-Americans," prosecutors said. He is accused of using a website -- www.bluffmycall.com -- to hide the origin of his phone calls. The calls were made between last May and July. He was arrested in October. Hennessey allegedly phoned a black woman on South Pine Avenue at 10:30 p.m. on July 19, used racial slurs and told her he would kill her. Court papers said the woman was targeted because of her race. Two days later at 1:30 p.m. on July 21, a man on Winnie Street in Albany received a phone call in which the caller threatened to kidnap the "little black boy and tie him up." Court papers alleged the man was "selected because he is of Hispanic origin and has a dark-skinned nephew." Investigators traced calls to Hennessey through Verizon Wireless documents and a Time Warner Cable account. It identified the attorney as the subscriber of the Internet account that services the Internet Protocol address of the computers that accessed the site from where the phone calls were placed. Hennessey, employed as an associate attorney with his agency since April 1993, earns a $104,080 salary. He remains at work. A Department of Civil Service spokeswoman said Hennessey has not been suspended because he has not been convicted and the alleged crimes did not take place at his job.

New York Post Editorial: Why Everyone Hates Lawyers

Why everyone hates lawyers
The New York Post - EDITORIAL - February 18, 2011

Talk about entitled. Bergen County's own Tova Gerson -- with the help of her lawyer dad -- this week actually sued a department store for $5 million after (she claimed) it ripped her off for all of 80 cents. The New Jersey housewife used a $5-off coupon at a Century 21 outlet in Paramus last month. When she returned an $18 outfit a week later, she got a prorated refund -- 80 cents less than the sticker price, to account for the coupon discount. So she filed suit, insanely claiming that Century 21 "unjustly enriched" itself by giving her back exactly what she paid. Unjust enrichment? Gerson sought a return of about 625 million percent on her "lost" 80 cents. That was before the story went viral, and her lawyer-father, Harry Katz of Long Island, withdrew the suit. Earlier, the duo sued Modell's Sporting Goods in a similar circumstance; Katz himself has sued three other retailers. They should be ashamed -- if the word appears in the family vocabulary. So maybe the next time they appear before the bench, the judge should cite them both for tortious frivolity -- and drop a big fat fine on their heads. No coupons accepted.

Wednesday, February 23, 2011

Lippman Piddles on Citizens, Governor Cuomo and Justice

Chief Judge Jonathan Lippman needs to cut court system's budget before Gov. Cuomo does it for him
The New York Daily News - EDITORIAL - February 23, 2011

Chief Judge Jonathan Lippman's proposed budget would keep spending at pre-crisis levels.

As the man who must lead the state court system through a fiscal crisis, Chief Judge Jonathan Lippman needs to get a lot tighter with tax dollars. His proposed budget would keep right on spending at pre-crisis levels despite the $10 billion deficit Gov. Cuomo is scrambling to balance. Plus, Lippman allocates money for a new well-meaning program when New York can't afford the many well-meaning programs it already has. Lippman's spending plan falls short of the standard Cuomo set in the operations he controls: Each agency is required to chop spending from general tax revenues by a full 10%. Cuomo achieved the target in his own office. He also called for holding the line on big-ticket items like school aid and Medicaid. For the first time since 1996, overall outlays would go down, not up, as Cuomo lopped $3.7 billion off the top. Lippman, by contrast, has called for shaving a piddling $356,000 out of his $1.8 billion operating budget. Factor in soaring benefits costs for his employees, and total spending goes up by $50 million, or almost 2%. His claim that further cutting would grievously harm the court system does not wash. Not when his budget includes $25 million to give lawyers to the poor in civil cases - a service that New York, like most other states, has never offered before. Lippman makes a case that such funding is essential for a truly fair judicial system, but this is not the time to launch such a costly undertaking. This is the time for all public officials to find ways to do more with less - Lippman included. The best way for him to guard the cherished independence of his court system is to sharpen his budget scalpel and trim away. Otherwise, Cuomo and the Legislature will have to do it for him.

Convicted "Cash for Kids" Judge Confronted by Mother of Dead Teen

Judge Convicted in "Cash for Kids" Scandal, Mother of Dead Teen Confronts Him
The Legal Intelligencer by Zack Needles and Leo Strupczewski - February 22, 2011

PHILADELPHIA, PA - While he was found guilty on the most egregious charges at the heart of his case, including racketeering, former Luzerne County Common Pleas Judge Mark A. Ciavarella Jr. escaped a bribery conviction because a federal jury in Scranton "bent over backward" to follow its instructions to the letter, according to Assistant U.S. Attorney Gordon A. Zubrod. "The verdict was not a conclusion that bribery did not occur," Zubrod said following the trial, explaining that the jury likely had difficulty tracing where the money developer Robert K. Mericle paid to Ciavarella went after it was deposited and therefore felt the burden of proof had not been met. Ciavarella's attorneys disagreed, however. Albert Flora told reporters after the trial that the not guilty verdict on the bribery charge showed that the jury "obviously did not believe Robert Powell's testimony and they obviously didn't believe Jill Moran's testimony." But Powell's attorney, Mark B. Sheppard of Montgomery McCracken Walker & Rhoads, said that analysis was superficial.

Under Hobbs Act extortion charges, Sheppard said, there's a far tighter requirement for the government to show quid pro quo than under honest services fraud charges. Asked if prosecutors could have helped clear themselves of the extra evidentiary hurdle in the minds of the jurors by attempting to prove the "kids-for-cash" allegations they made early in the case, Sheppard said Zubrod's and Houser's tactics ensured they didn't overcomplicate the case. The "core" of the case, he said, was the honest services fraud and racketeering charges. Ciavarella was convicted of four of the eight honest services fraud charges he faced and both racketeering charges. "I don't think the [prosecution] was missing anything," Sheppard said. "I thought the case went in perfectly. I don't think there was anything they should have done differently." U.S. Attorney Peter Smith praised the verdict, saying it "put the lie" to the claim that corruption is the status quo in Northeast Pennsylvania. "It's a part of the culture that must change," he said. On Friday the federal jury in Scranton found Ciavarella guilty of 12 of 39 counts of corruption filed against him. The 12 men and women, who deliberated for an estimated 12.5 hours, returned to U.S. District Judge for the Middle District of Pennsylvania Edwin M. Kosik's courtroom to announce their findings, which included decisions that Ciavarella was guilty of racketeering, racketeering conspiracy, honest services mail fraud, money laundering conspiracy and a host of tax fraud charges. Ciavarella was cleared of extortion, bribery and honest services wire fraud charges, however. Once the jury had left the courtroom for good, Assistant U.S. Attorney William Houser asked Kosik to order that Ciavarella be detained until sentencing. Ciavarella poses a flight risk because he has "little to lose" in light of the guilty verdicts, Houser said. "He's a 61-year-old man facing the rest, or most of the rest, of his life in prison," he said, adding that Ciavarella has the wealthy connections necessary to "easily" obtain funding to leave the country. But defense co-counsel William Ruzzo said Ciavarella "would rather go on a gurney and be injected than leave his family" and that "he'll be around to see what the appellate courts have to say." Kosik, finding that Ciavarella poses no threat of fleeing since he already has fully complied with the probation office for two years, released him on a $1 million unsecured bond on the condition that he be placed in the custody of his pregnant daughter. Ciavarella, Flora and Ruzzo were swarmed by reporters and onlookers immediately upon exiting the courthouse Friday, with several other spectators lining the street. Flora told the media that the jury "rejected 95 percent of the case." "The government really got hurt today in this entire case," he said. When he added later that "this was not a cash-for-kids scandal," a woman in the crowd began crying and screaming that Ciavarella had driven her son to suicide by sending him to juvenile detention. "Do you remember me? Do you remember my son, the all-star wrestler?" she asked Ciavarella. "He shot himself in the heart." The ex-judge, continuing to shuffle toward his car, told reporters, "I don't know what the circumstances were concerning her son." A former juvenile delinquency court judge, Ciavarella was alleged to have taken more than $2.8 million from the builder and former co-owner of two private juvenile detention facilities, PA Child Care and Western PA Child Care. Prosecutors alleged that money was the fruit of improper kickbacks and extortion. Ciavarella denied those allegations, saying instead that he received a finder's fee from the facilities' builder, Robert K. Mericle, and rent money for a condominium in Florida that his wife co-owned from the former co-owner of the facilities, Robert J. Powell.

In the indictment, Ciavarella was charged with racketeering, racketeering conspiracy, four counts of honest services wire fraud, four counts of honest services mail fraud, 10 counts of corrupt receipt of bribe/reward for official action concerning programs receiving federal funds, money laundering conspiracy, five counts of money laundering, eight counts of extortion under color of official right, conspiracy to defraud the United States and four counts of subscribing and filing a materially false tax return. Ciavarella admitted during testimony on Tuesday that he was, in fact, guilty of filing false tax returns for tax years 2003, 2005 and 2006 as alleged by prosecutors. Prosecutors also argued during trial that Ciavarella filed a false return for tax year 2004, but Ciavarella disputed that charge. He was found guilty of it, however. He fought the majority of the charges by arguing that the kickback alleged by prosecutors was no more than a finder's fee paid by Mericle as a thank you for putting him in touch with Powell. He fought the extortion claims by attempting to insulate himself from the actions of fellow former Luzerne County Common Pleas Court Judge Michael T. Conahan and claiming that any money paid by Powell was for the use of a condominium owned by a company controlled by the former judges' wives. Conahan, who faced an equally damning indictment and opted to plead guilty to one racketeering charge in relation to the alleged crimes, was a name that arose often during the trial. He was, however, conspicuously absent in person. Neither side called him as a witness. His absence from the case was nearly as shocking as his decision to place himself at the mercy of Kosik by accepting an open-ended plea agreement in April.

In July 2009, nearly a year before that turn, Kosik threw out the initial plea agreements reached between Conahan, Ciavarella and federal prosecutors, in part because of the judges' conduct following the plea agreements and their refusal to accept responsibility for the crimes they had committed. Ciavarella had been speaking out against the allegations lodged against him in public and Kosik described them as self-serving. Conahan was being obstructionist, Kosik also said. The two former judges subsequently made a joint filing Aug. 20, 2009, petitioning Kosik to reinstate their agreed upon sentence of 87 months each in prison because neither could be found at fault for his post-plea hearing actions. Kosik rejected that Aug. 24, 2009. That same day, the former judges withdrew their guilty pleas and formally entered pleas of not guilty to the charges. In his Aug. 24 order, Kosik said in light of the presentence report and sentencing recommendation from the probation office, it was within his discretion to throw out the plea agreements. The probation officer's "assessment and justification for the recommendation" was partly the basis for Kosik's earlier conclusions that Conahan was obstructing justice, failing to discuss the motivation behind his conduct and failing to accept responsibility for his crimes, he said. "The probation recommendation characterized these failures by Conahan as based on his 'scandalous conduct,'" Kosik wrote in his Aug. 24 order. "The defense claims that a defendant is not required to admit relevant conduct beyond the offense of conviction. The court generally agrees, but the defendant was expected to admit relevant conduct related to the scandalous nature of the offense of conviction." In a telling footnote, Kosik said he had met with Conahan's and Ciavarella's lawyers twice and rejected reconsidering the plea agreements both times. He said federal prosecutors as well as the defense attorneys had urged him to reconsider the plea deals. Both sides offered to meet with him separately "to explain each side's reasons for entering into the plea agreement," Kosik said. "The offer was rejected by the court because such a meeting might impermissibly involve the court in plea bargaining," he said. Later in the body of his opinion, Kosik said: "It ill behooves both parties to want the court to consider additional reasons to be conveyed in private."

A new 48-count indictment was filed by the federal government in September 2009 and the judges entered joint "not guilty" pleas. They followed that up by filing a series of pretrial motions together, charging federal officials with "outrageous government misconduct," questioning the impartiality of the judge assigned to their case and requesting a change in venue in March 2010. Conahan, however, took the surprise turn and there were reports that he was willing to testify against Ciavarella at trial. That never happened. Powell and Mericle were called early in the trial by federal prosecutors, however, and described the scheme as alleged by the prosecution in detail. Both men, like Conahan, pleaded guilty to crimes related to the alleged scheme, leaving Ciavarella as the sole alleged participant to stand trial. The former judge is now one of three to don black robes in the Luzerne County courthouse to be facing at least 10 years in prison. Fellow former judges Conahan and Michael T. Toole both pleaded guilty to criminal charges last year as investigators untangled a web of corruption. Toole, who pleaded guilty to one count of corrupt receipt of a reward for official actions in October, had fixed the appointment of a neutral arbitrator for a UM/UIM case in exchange for the use of an attorney's beach house. Also caught in the probe were the county's court administrator, prothonotary, clerk of courts and a member of the juvenile probation services office. While The Legal had previously reported that sources had tied Conahan to mobsters, following the trial, Zubrod said that the investigation into Conahan and Ciavarella's activities "sprang from" a probe of reputed mobster William "Billy" D'Elia. At 8:45 a.m. Thursday, the first full day of jury deliberations, Ciavarella stood outside Kosik's fourth-floor courtroom with his wife and daughter, pacing along a narrow corridor overlooking the rest the courthouse. He spent the time chatting and leaning over the rail, looking at the lobby below. It was a slow, quiet beginning to a process that seemingly marks the end of one of the worst cases of judicial corruption in Pennsylvania history. This is not, however, the end for Ciavarella. He still faces sentencing and is a defendant in a civil suit filed on behalf of juveniles whom he sentenced to delinquency centers. The plaintiffs in those cases have filed civil RICO and civil rights claims, alleging the sums received by the judges were "kickbacks" and that the money was in exchange for sending juveniles to PA Child Care and Western PA Child Care. The jury's verdict should benefit those claims, said Marsha Levick, chief counsel for the Juvenile Law Center and one of the attorneys involved in bringing the suits on behalf of the juveniles. The verdicts, however, still need to be "digested" to determine the extent of their impact, Levick said. "The constitutional violations that we have alleged from day 1 weren't really a part of the criminal litigation," Levick said. "But those charges remain. The strongest statement about their validity is what the Pennsylvania Supreme Court did last year, which is to vacate and dismiss with prejudice [all the juveniles' adjudications]. The Supreme Court has already spoken about that illegality." Levick noted that the breadth of the corruption charges required the acts to be addressed in several different places, including the courts and the state legislature. "This story was so deep and so broad in the contours of judicial misconduct and illegality that it took several forums in which to seek redress and continue to seek redress," Levick said.

SHOCKER: Lawyers Knew Of, and Profited From, Madoff's Illegal Activity

Irving Picard hits Securities and Exchange Commission's top lawyer with Bernie Madoff lawsuit
The New York Daily News by Wayne Coffey, Nathaniel Vinton and Teri Thompson - February 23, 2011

Irving Picard's assertion that David M. Becker profited from Bernie Madoff and is being sued could bolster the claims of Mets owner Fred Wilpon that he was unaware of the scheme.

The family of the top lawyer at the Securities and Exchange Commission invested with Bernie Madoff and earned more than $1.5 million in ill-gained profits, according to trustee Irving Picard, who has named the lawyer, David M. Becker, as a defendant in a clawback lawsuit, a Daily News investigation has found. The apparent conflict of interest raises significant questions about the watchdog commission's failure to stop Madoff and his $65 billion Ponzi scheme, despite repeated red flags and investigations into his operations. Becker, 63, who is leaving his post as general counsel and senior policy director of the SEC in five days to return to the private sector, has never publicly disclosed his family's ties to Madoff. He and his two brothers, who are also defendants in the suit, were named executors of their mother's estate, which included a Madoff account, after her death in 2004. They liquidated the account in 2005, withdrawing $2,042,845, and are being sued as co-executors of the estate and individually. David Becker was the SEC's general counsel from 2000-2002 and again from 2009 until this month. He joined the agency in 1998 as deputy general counsel. A spokesman for the SEC, John Nester, confirmed Tuesday that Becker received the complaint several days ago. "He had no involvement with his parents' financial affairs, and no recollection of his parents' account with Madoff prior to his mother's death and subsequent liquidation of the account," Nester said on behalf of Becker. The lawsuit, filed on Nov. 12 of last year against Becker and William P. and Daniel I. Becker, is one of up to 200 that Picard has filed in an effort to recover money from people who gained from Madoff's scheme and redistribute it among the far greater number of those who lost their savings. A spokesperson for Picard's law firm, Baker & Hostetler LLP, declined to comment on the Becker lawsuit, citing the ongoing litigation. For Mets owners Fred Wilpon and Saul Katz, the stunning assertion that an SEC heavyweight profited from Madoff's chicanery and is being sued by Picard could bolster their own claims that they were unaware of Madoff's scheme, financial and legal experts said. The crux of the 373-page complaint Picard recently filed against the Mets owners claims they "knew or should've known" about Madoff. No such claim is made in the straightforward, 24-page complaint against David Becker and his brothers. Helen Davis Chaitman is a nationally renowned litigator who represents a number of Madoff victims and is a Madoff victim herself, and has been sharply critical of Picard's methods in trying to recover funds. "This is amazing," Chaitman said. "It certainly proves how foolish Picard's allegations are (that Wilpon and Katz) knew or should've known, if the general counsel of the SEC didn't know." Bradley Simon, a former federal prosecutor who has watched the Madoff case unfold, said situations such as Becker's look bad for the SEC. "If families of high-ranking SEC officials were heavily invested in Madoff it may help explain why the SEC was less than vigilant in scrutinizing his activities," Simon said. "We know they were asleep at the switch. This may help explain why."

Legal records show that the Becker brothers' mother, Dorothy G. Becker, was a Madoff investor, and that her sons became executors of her estate after her will was admitted to probate on Sept. 22, 2004. A Madoff account (No. 1B0270) was formed in the name of "The Estate of Dorothy G. Becker," according to Picard, whose filings show that the check for $2,042,845 was wired out of the account on Feb. 10, 2005. Picard's clawback complaint claims that Madoff "made transfers to Defendants totaling at least $1,544,494 in fictitious profits from the Ponzi scheme," and that the funds were "non-existent profits supposedly earned in the Account, but in reality they were other people's money." Because the suit goes back only six years, it is unclear how long the Becker family invested with Madoff. David Becker's father, Sidney, died in 2000. At the time of the Becker estate transactions, the SEC had already received multiple warnings about Madoff, and indeed, had conducted one of its nine examinations of Bernard L. Madoff Investment Securities not even a year earlier, according to a report issued by the SEC's Official of the Inspector General. One of those complaints, an eight-page memorandum by Boston investment professional Harry Markopolos, had come under Becker's watch in 2001. Becker, who left to work in private practice at Cleary Gottlieb in 2002, was not an SEC employee at the time of the estate transactions involving his mother's account. He returned to the SEC in 2009 at the urging of chairman Mary Schapiro. Upon announcing Becker's departure from the SEC earlier this month, Schapiro said, "His experience and deep knowledge of the Commission and the securities laws has served the agency and the American people brilliantly." In a speech 15 months ago, Becker was eerily prescient in remarks he made about Madoff to the Committee on Federal Securities Regulations of the American Bar Association. "The plain truth is that the (SEC) did not protect investors from the biggest Ponzi scheme this country has ever known," Becker wrote. "There are explanations, but there are no excuses. Whatever we might think about some of the complaints that have been leveled against the Commission, the Madoff story has been a blow to the solar plexus . . . " Becker filed a friend of the court brief in support of Picard's litigation and tactics in September of 2010. A lawyer with ties to a number of Madoff victims, speaking on the condition of anonymity, expressed outrage about "the crookedness and incestuousness of this whole affair," in reference to the SEC's failure to investigate Madoff. "First, in a prison interview, you have Madoff calling Mary Schapiro 'a dear friend,' " the lawyer said. "Now you have the general counsel of the SEC - a lawyer whose job it is to police this world, being named as a defendant because his mother's estate had money with Madoff. "I don't care how much money David Becker and his brothers made or didn't make. It's wrong. It's just wrong. A lot of lawyers are getting rich and everybody else is getting screwed."

Tuesday, February 22, 2011

Even Judges Commit Crimes, Bad Ones

Even Judges Commit Crimes, Bad Ones
FORBES - WHITE-COLLAR CRIME by Walter Pavlo - February 20, 2011

Former Luzerne County (Pennsylvania) Judge Mark Ciavarella, was found guilty in federal court of racketeering for taking a $1 million kickback from the builder of for-profit prisons for, get this, juveniles. Ciavarella who left the bench two years ago after he and another judge, Michael Conahan, were accused of sentencing youngsters to prisons they had a hand in building. Prosecutors alleged that Conahan, who pleaded guilty to racketeering last year, and Ciavarella received kick-backs from the private company that built and maintained the new youth detention facility that replaced the older county-run center. Ciavarella, who presided over juvenile court, sent kids to juvenile detention for crimes such as possession of drug paraphernalia, stealing a jar of nutmeg and posting web page spoofs about an assistant principal (3 months of hard time). Some of those sentenced were as young as 10 years old. Ciavarella is still defiant and actually testified in his own defense. He acknowledged to jurors that he in fact did receive money from the builders of the prison but his only mistake was not reporting that money on his TAX RETURNS! What I find hard to believe is not that Ciavarella would say something so ridiculous, but that his defense attorney actually thought that saying something this stupid would actually help the case. Ciavarella is free pending sentencing and people familiar with the case believe he is going to get about 12 years. Since he’s 61, it pretty much eats into his golden years. The new detention center is still taking new junior-inmates. However, none from Luzerne County are being sent to the facility. What is sad is that these centers are needed for troubled youth, when used properly. Now the youth of Luzerne have kids with bad memories of being wrongly punished and current youth, that need to be rehabilitated, are being sent to centers further from their home. The casualties of the crime continue to mount. I feel for the victims whose lives were forever changed by the misguided sentences handed out by judge Ciavarella. This is a sad day for the justice system but it is refreshing to see the right person going to jail this time.

Judge's Lawyer Girlfriend Says He Broke Her Elbow in Assault

Judge's Lawyer Girlfriend Says He Broke Her Elbow in Assault
The Legal Intelligencer by Zack Needles - February 22, 2011

PHILADELPHIA, PA - A York County Common Pleas Court judge accused of injuring a county public defender in a domestic dispute could face removal from the bench, regardless of the outcome of a criminal investigation, according to several Pennsylvania ethics lawyers. On Feb. 14, Janan M.E. Tallo of the York County Public Defender's Office obtained a protection from abuse order against York County criminal court Judge Thomas H. Kelley VI, whom she claimed slammed her on the floor of his home during an argument, breaking her elbow. Tallo said in her PFA petition that she was a "current or former sexual or intimate partner with" Kelley. According to the petition, the dispute began on Feb. 8 with an argument over the phone, the subject of which was not disclosed. Around 11:30 p.m., the petition said, Tallo went to Kelley's York Township home, he invited her in and the argument "escalated." "Defendant grabbed plaintiff by her coat from seating position, lifted her off the ground and slammed her to the floor," the petition said. "Plaintiff landed on back and arms resulting in broken elbow." Tallo alleged in the petition that she also suffered bruises on her back, thigh and arms. According to the petition, Kelley also "grabbed" Tallo's arm during an argument in November of last year. Tallo requested in her petition that Kelley be required to relinquish any firearms, weapons and ammunition and pay any medical bills related to her injuries. Nils Frederiksen, spokesman for the state Attorney General's Office, confirmed Thursday that the office is investigating a complaint involving Kelley that was referred to it by the York County District Attorney's Office.

According to media reports, York County President Judge Stephen P. Linebaugh is in the process of reassigning Kelley's criminal cases to other county judges to avoid having any of Tallo's colleagues from the public defender's office appear before him Linebaugh could not be reached at press time. West Chester, Pa., attorney Samuel C. Stretton said he's tried several cases in front of Kelley and was "absolutely shocked" by the allegations. According to Stretton, a felony criminal conviction would result in Kelley's automatic removal from the bench, but even a misdemeanor conviction could be enough to get Kelley either suspended or removed from the bench. In addition, even if the criminal investigation dead-ends or Kelley is acquitted, the JCB could potentially launch its own investigation, after which it could file charges with the Court of Judicial Discipline. A woman who answered the phone at the JCB said information regarding the board's investigations is confidential. After checking with the JCB's chief counsel, Joseph A. Massa Jr., she said he was unavailable for comment but told her he didn't have anything to add beyond her point on confidentiality. Jim Koval, a spokesman for the judiciary, said Chief Justice Ronald D. Castille is aware of the allegations against Kelley but was unavailable for comment at press time. Both Kelley and Tallo could face punishment, however, if it's revealed that they hid their relationship while she tried cases in his courtroom. Linebaugh is quoted in media reports as saying both he and Chief Public Defender Bruce P. Blocher were apprised of the relationship by Kelley and Tallo and that steps were subsequently taken to make sure Tallo always appeared before one of the county's other three criminal court judges. A call to Blocher was not immediately returned, nor was a call to the York County District Attorney's Office to determine whether Tallo may have handled any cases in Kelley's courtroom before the two disclosed their relationship to their superiors. A finding that Kelley and Tallo were involved in the same case while in a relationship could result in both being punished, said Fox Rothschild Co-Chair Abraham Reich, whose practice includes legal ethics and professional responsibility. Reich said Kelley would "clearly" have had an "obligation to disqualify himself" from any case in which Tallo was defense counsel during their relationship. Furthermore, if an investigation were to reveal that Tallo and Kelley's relationship affected his rulings in some way, those judgments could be reversed and Kelley could again face removal. Neither Kelley's attorney, Christopher A. Ferro of Griest Himes Herrold Schaumann Ferro in York, nor Tallo's attorney, Suzanne Sennett Smith of Marshall & Smith in York, had returned calls for comment at press time.

Monday, February 21, 2011

Governor Cuomo's Big Gift- Lippman's FBI Inquiry

Cuomo's Big Gift- Lippman's FBI Inquiry

The Committee on Public Integrity has formally asked Janice K. Fedarcyk, FBI Assistant Director in Charge of the New York Field Office, to personally intervene in the investigation of New York's Chief Judge Jonathan Lippman. The correspondence will be posted here at 9am on Tuesday, February 22, 2011. The Committee on Public Integrity, by copy of the correspondence to New York State Governor Andrew Cuomo and all members of New York's Assembly and Senate, also asks the state's leaders to review the pending FBI inquiry.

NY's Financial Crisis Requires Appropriate Leadership of $3 billion Judicial Enterprise

Governor Cuomo has been specifically asked to immediately appoint a commission to look into the troubling allegations of a $40 Million Judicial Scam involving Judge Lippman and Judge Charles Ramos.

Highlights include......

....Our research has revealed, and fully documented, a troubling state court “ethics” oversight structure that is itself corrupt. We have documented countless examples where the law, attorneys, litigants, state employees and, in fact, judges have been targeted for annihilation simply because of a political whim or from the vengeful, misguided desires of a few. Conversely, we have evidence of many outrageous and criminal acts by certain individuals within and about the state court system that have been substantively overlooked for no other reason than their favored position or political affiliation.

CRIMES AGAINST FAMILIES

We take all allegations very seriously, but especially when they involve New York State’s Chief Justice, Jonathan Lippman, and an Appellate Division Associate Justice, Charles Ramos. We are most troubled by the apparent common denominators of “greed of money” and “thirst for power.” The sad result of these crimes against families, state employees and citizens is outrageous, and must end.

IMMEDIATE ACTION REQUIRED

OVERVIEW: New York State Supreme Court Justice Charles E. Ramos received a "waiver" of the Rules Governing Judicial Conduct from then-Chief Administrative Judge Lippman based upon information he (Ramos) provided in writing. The “waiver” pre-approved Judge Ramos to be co-executor of two estates of a couple who were alive; the “waiver” also approved Judge Ramos’ in a role over various family trusts.

DOCUMENTED FACTS: The highly unusual "waiver" of the State Judicial Rules was given by then-Chief Administrative Judge Jonathan Lippman on May 7, 2003. The May 7, 2003 dated letter from the Administrative Judge allowed Judge Ramos "to be named and to serve as a co-executor and trustee under the Wills of Ruth and Herb Weissberg.” (see attached) However, on May 7, 2003, Ruth and Herb were very much alive. And though Herbert Weissberg would die about 2 months later, on July 3, 2003, it was known that Herb had had a stroke and couldn’t speak, due to dementia and aphasia, for well over one year prior to his death.

While Judge Lippman's letter reiterates Justice Ramos' contention that he "had a longstanding relationship of trust and confidence with the Weissbergs going back 36 years"(see attached), there is no mention as to why the original March 24, 2002 dated Will did not name Charles E. Ramos as an executor or trustee but, instead, the Last Will named trusted accountant Andrew Rubin and long-time friend attorney Paul Herman as co-executors. It was only by virtue of a subsequent Codicil, purportedly by the long-incapacitated and dying Herbert Weissberg that Andrew Rubin and Paul Herman were removed as named co-fiduciaries, and replaced with Judge Ramos and the frail, soon-to-be-widow, Ruth Weissberg as the newly named co-fiduciaries. Witnesses confirm that Herb could barely say “yes” or “no” and was in a fetal position during the last year of his life. People who knew the Weissberg family for decades were shocked to hear that Judge Ramos had presented himself as a long time "dear friend" of Herbert Weissberg.

It appears that other plans to wrestle control of Herb's millions were in the works. It is also alleged that in October of 2001, Herbert Weissberg’s attorney, Paul Herman, went to the hospital to visit Herb, who was at that time extremely ill and unable to speak due to dementia and aphasia. While it cannot be determined exactly how many documents, purportedly signed by Herbert Weissberg, emerged from that hospital visit, or exactly from whom, what is certain is that Herb’s signature varies significantly from one writing to another on papers with the exact same date. One document, supposedly prepared by Herb, misspells the word “Gramercy” – as in the Gramercy Park Hotel- the place Herbert Weissberg had run for decades. Out of thin air, but with a judicial waiver in hand, Judge Ramos then appeared and became a paid trustee. The question remains that if Judge Ramos was such “a close, personal friend of the family” and as was presented to Judge Lippman, then Judge Ramos surely would have known that Herb Weissberg had been very ill, could barely scribble a signature, and could not communicate or understand anything complex- all long before the codicil giving him (Ramos) so much was even drafted. Simply, people with Dementia and Aphasia do not initiate complex estate changes.

THE ALLEGATIONS: (1) Judge Ramos, in early 2003, filed papers within the New York State Court system containing knowingly false information, so to advance a scheme where he would improperly, and financially, gain; and (2) Judge Lippman, since at least mid-2007, has been aware of the false presentation of information by Judge Ramos, and he has failed, and he continues to fail, to take appropriate action as required by law.

The FBI correspondence will be posted here at 9am on Tuesday, February 22, 2011.

Sunday, February 20, 2011

Casual Culture of Corruption in 'Kids-For-Cash" Scandal

  • Jury Finds One Judge Guilty While Another Jurist Pled Guilty
  • A bigger picture emerged of a staggeringly casual culture of corruption
  • Judges allowed to run shell corporations, secretly accept cash from wealthy friends
  • Judges shared investments with lawyers who regularly appeared in their courtrooms
  • Convicted Judge failed to fully inform juveniles of their right to counsel
  • Judge had his Florida condominium rent paid in effort to disguise bribery and extortion
  • Two Corrupt Judges paid $2.8 million from 2003-06.

Ciavarella case focused on money trail, avoided juveniles' stories
The Citizens Voice by Dave Janoski - February 20, 2011

A trial is a pursuit of truth, but no trial reveals the whole truth. Prosecutors in the trial of Mark A. Ciavarella Jr. chose to focus on a narrow band of evidence in the wider spectrum of the kids-for-cash case. They relied on financial documents and cooperating witnesses to convict the former Luzerne County Juvenile Court judge of racketeering, frustrating former defendants in his court who felt their stories went ignored. Ciavarella's co-conspirator, former Judge Michael T. Conahan, loomed over the trial like a manipulative ghost, but never appeared on the witness stand. At times, tantalizing threads poked through the uniform fabric of the government's case - suggestions of a long-rumored probe into case fixing, references to developer Robert K. Mericle's payments to other powerful politicians and hints that prosecutors could reveal more about the murky maneuvering behind the county's signing of a $58 million lease for the juvenile detention center that Mericle built. Prosecutors, in their single-minded determination to avoid further complicating an already complex case, never followed those threads.

But a bigger picture still emerged of a staggeringly casual culture of corruption at the Luzerne County Courthouse that allowed judges to run shell corporations, secretly accept cash from wealthy friends and share investments with lawyers who regularly appeared in their courtrooms. In media interviews following a verdict that will likely send Ciavarella to prison for a dozen or more years, jurors expressed little trust in the veracity of any of the principals in the case, including prosecution witnesses Mericle and detention center owner Robert J. Powell, who testified they paid Ciavarella and Conahan $2.8 million from 2003-06. The jury unequivocally rejected Powell's testimony that the judges relentlessly solicited kickbacks for sending juveniles to his centers, finding Ciavarella not guilty of all the extortion and bribery counts tied to Powell's payments. One juror noted the panel was left wanting more information about the role of Conahan, who seemed the main villain in the case.

According to defense and prosecution testimony, it was Conahan who closed a county-owned detention center and signed a secret agreement to send juveniles to Powell's for-profit jail. It was Conahan who made the arrangements for the wire transfers that led to Ciavarella's conviction for racketeering. It was Conahan who negotiated the rental fees Powell paid for a Florida condominium owned by the judges in what prosecutors alleged was an effort to disguise bribery and extortion. Prosecutors declined to say why they did not call Conahan, who has pleaded guilty to racketeering conspiracy and faces up to 20 years in prison. While Conahan's plea agreement does not require him to cooperate with the government, Assistant U.S. Attorney Gordon Zubrod said in a pre-trial meeting in August that Conahan was willing to testify, if only to confirm the facts of the case he acknowledged during his plea hearing. Conahan's absence allowed Ciavarella and his defense team to place the onus for the most damaging allegations on Conahan and to claim he had a "backroom deal" with Powell that excluded Ciavarella. Conahan was heard in court, if only in the form of a secretly recorded July 2009 conversation in which he laid out for Powell and Ciavarella a possible defense against a looming criminal case being assembled by federal agents. It was the exact defense Ciavarella's lawyers employed in U.S. District Court over the past two weeks: The only payments Ciavarella received connected to the detention center came from Mericle and they were legal. Ciavarella knew Powell was paying rent on the Florida condo, but the terms were negotiated by Conahan. Ciavarella knew nothing of other cash payments from Powell to Conahan. As the prosecution case neared its close, it became clear that the most attention-grabbing aspect of the case - allegations that Ciavarella summarily detained undeserving juveniles to keep the beds at Powell's centers full - would not play a large role in the trial.

U.S. Attorney Peter J. Smith said the government did not need to introduce that evidence to make its case, which centered on financial transactions. The state court system has already dealt with Ciavarella's courtroom conduct, specifically his failure to fully inform juveniles of their right to counsel, by vacating all of his juvenile court rulings since 2005. Still, the prosecution decision evoked outrage from some former juvenile defendants and their parents, hundreds of whom are pursuing civil-rights claims against the former judge. "I don't understand why they're not looking at the transcripts of these children's so-called hearings," said one of those parents, Laurene Transue. "Why aren't they talking to the parents? Why aren't they saying, 'What happened in court? What happened when you tried to speak?' " "Why isn't that being told? Because, that's part of it," Transue said. "If former Judge Ciavarella conducted fair hearings for these juveniles, I can't imagine that a fraction of them that were sent away would have been sent away. Obviously there was some motive to sending these kids away to these facilities." The prosecution decision not to pursue that line of evidence kept the jury from being distracted, but it also closed off an avenue the defense could have pursued to attack the prosecution's case. Many of the juveniles who appeared before Ciavarella admitted to the charges against them. Many might have benefitted from the treatment he ordered. Furthermore, many of the former juvenile defendants suing Ciavarella were placed in centers other than the ones owned by Powell. Ciavarella, 60, has long maintained his judicial decisions were solely in the interest of the juveniles who appeared before him and society at large. A trial that focused on the highly problematic question of whether the juveniles sentenced by Ciavarella deserved their punishment and/or benefitted from it could have easily turned in Ciavarella's favor. In the end, the prosecution said it was highly satisfied with a verdict that found Ciavarella guilty of just 12 of 39 counts. The jury appeared to find Ciavarella guilty only of the payments that could be definitively tied to him without a reasonable doubt, Zubrod said. "It was not a conclusion that a bribery or extortion did not occur. They were bending over backwards to be fair to the defendant and to make sure they could trace the money before they nailed him," Zubrod said. "I think that's really what went on. It's not that he was innocent, but that the burden of proof had not been met." DJANOSKI@CITIZENSVOICE.COM

Saturday, February 19, 2011

Jury Finds Corrupt Kids-For-Cash Judge Guilty

Pa. juvenile court judge guilty of racketeering in kickback case
The Associated Press - February 19, 2011


SCRANTON, PA — A former juvenile court judge defiantly insisted he never accepted money for sending large numbers of children to detention centers even after he was convicted of racketeering for taking a $1 million kickback from the builder of the for-profit lockups. Former Luzerne County Judge Mark Ciavarella was allowed to remain free pending sentencing following his conviction Friday in what prosecutors said was a "kids for cash" scheme that ranks among the biggest courtroom frauds in U.S. history. Ciavarella, 61, left the bench in disgrace two years ago after he and a second judge, Michael Conahan, were accused of using juvenile delinquents as pawns in a plot to get rich. The Pennsylvania Supreme Court has dismissed 4,000 juvenile convictions issued by Ciavarella, saying he sentenced young offenders without regard for their constitutional rights. Ciavarella maintained the payments were legal and denied that he incarcerated youths for money. "Never took a dime to send a kid anywhere. ... Never happened. Never, ever happened. This case was about extortions and kickbacks, not about ’kids for cash,’" said Ciavarella, who plans to appeal. Federal prosecutors accused Ciavarella and Conahan of taking more than $2 million in bribes from the builder of the PA Child Care and Western PA Child Care detention centers and extorting hundreds of thousands of dollars from the facilities’ co-owner.

A federal jury in Scranton convicted Ciavarella of 12 counts, including racketeering, money laundering and conspiracy, but acquitted him of 27 counts, including extortion. He is likely to get a prison sentence of more than 12 years, according to prosecutors — who revealed after the verdicts that a reputed mob boss turned informant helped them make their case. Parents of juveniles who appeared before Ciavarella were outraged that he was released after the verdicts. Ciavarella often ordered youths he had found delinquent to be immediately shackled, handcuffed and taken away without giving them a chance to say goodbye to their families. Some of the children he ordered locked up were as young as 10. Sandy Fonzo, whose son was jailed by Ciavarella — and committed suicide last year at age 23 — screamed obscenities at the judge and even poked him as he and his attorneys held a news conference on the courthouse steps. "My kid’s not here anymore!" yelled Fonzo. "He’s dead! Because of him! He ruined my ... life! I’d like him to go to hell and rot there forever!" Ciavarella glanced at Fonzo, then turned his back.

Fonzo’s son, Edward Kenzakowski, was a 17-year-old all-star wrestler with no prior record when he landed in Ciavarella’s courtroom for possession of drug paraphernalia. She said her son never recovered from the months he served at the detention centers and a wilderness camp. Tears streaming down her face, Fonzo said she couldn’t believe Ciavarella was allowed to walk out of the courthouse. "There’s no justice, there’s not. He’s never going to get what he deserves," she said. "I just wanted to see him handcuffed and taken out. But when I saw him just being released with that stupid smirk on his face ..." The jury found Ciavarella guilty of taking a $997,600 kickback from Robert Mericle, the builder of the juvenile facilities — money he was ordered to forfeit to the federal government after the verdicts were announced. He was also convicted of failing to report the payments on his state-mandated financial disclosure forms and failing to pay taxes on the income. Jurors acquitted him of extorting Robert Powell, the facilities’ developer and co-owner. The defense declared victory. "We’re amazed. The jury rejected 95 percent of the government’s case," said attorney Al Flora. "I find it interesting," U.S. Attorney Peter Smith said in response, "that a man just convicted of racketeering is claiming any sort of a victory out there today. I wonder what he would consider a defeat." Prosecutors alleged that Conahan, who pleaded guilty to racketeering last year, and Ciavarella plotted to shut down the dilapidated county-run juvenile detention center in 2002 and arrange for the construction of the PA Child Care facility outside Wilkes-Barre.

Ciavarella, who presided over juvenile court, sent youths to the center and later to its sister facility in western Pennsylvania while he was taking payments from Mericle, a prominent builder and close friend of Ciavarella, and Powell, a high-powered attorney. Luzerne County paid Powell’s company more than $30 million between 2003 and 2007 to house juveniles at PA Child Care and Western PA Child Care. The county could have built its own juvenile center for about $9 million, according to testimony. In dismissing thousands of Ciavarella’s convictions, the state high court said he ran his courtroom with "complete disregard for the constitutional rights of the juveniles," including the right to legal counsel and the right to intelligently enter a plea. Hundreds of youths and their families are suing Ciavarella and Conahan in federal court, but Smith said the judges’ handling of juvenile cases did not figure into the federal prosecution for legal and evidentiary reasons. "We’re very sympathetic to the pain to the community that was caused here ... and we’re fully aware of the deep anguish that many parents and many juveniles feel. But the federal criminal courts are not the appropriate venue to resolve that issue fully," he said. Ciavarella, who took the stand in his own defense, acknowledged to jurors that he failed to report the payments on his tax returns and hid them from the public, but he denied any plot to take kickbacks or extort money. Ciavarella told jurors that he thought he was legally entitled to Mericle’s money, calling it a "finder’s fee" for introducing Mericle to Powell. Ciavarella also denied that he extorted Powell, who had testified for the prosecution that he was forced to pay the judges nearly $600,000 after they agreed to send juvenile delinquents to his new lockup. The payments were disguised as rent on a Florida condominium owned by the judges’ wives. It was Conahan who made the arrangements with Powell, Ciavarella insisted. He said Conahan told him that Powell had agreed to pay them $15,000 a month for 60 months to lease the waterfront Florida property. Prosecutors scoffed at that explanation, questioning why Powell would pay nearly $1 million in rent on a condo he could have purchased outright for less than $800,000.

Officials disclosed for the first time Friday that they were led to the judges by the reputed boss of a northeastern Pennsylvania Mafia family. William D’Elia — who regularly met for breakfast with Conahan — became a government informant after his 2006 arrest on charges of witness tampering and conspiracy to launder drug money. "D’Elia led us to Judge Conahan," said Assistant U.S. Attorney Gordon Zubrod. "From there we began to focus on them, the financial dealings between Judge Conahan, Judge Ciavarella, Mericle, Powell." D’Elia won a sentence reduction last year based on his cooperation in another criminal case and could be released as early as next year. Ciavarella and Conahan initially pleaded guilty in February 2009 to honest services fraud and tax evasion in a deal that called for a sentence of more than seven years in prison. But their plea deals were rejected by Senior U.S. District Judge Edward M. Kosik, who ruled they had failed to accept responsibility for their actions. A federal grand jury in Harrisburg subsequently indicted the judges on charges of racketeering, fraud, money laundering, bribery, extortion and tax offenses. Conahan pleaded guilty to a single racketeering charge last year and awaits sentencing. Mericle and Powell pleaded guilty to lesser offenses and testified against Ciavarella; both await sentencing. Ciavarella faces a maximum of 157 years in prison at sentencing, but will more likely receive 12½ years to about 15½ years under federal sentencing guidelines, prosecutors said. PA Child Care and Western PA Child Care remain open and continue to accept juveniles from many Pennsylvania counties, though Luzerne County no longer sends delinquents to them.

Friday, February 18, 2011

NY Post EDITORIAL on Lippman: Goldplating the Courts

Goldplating the courts
The New York Post - EDITORIAL - February 15, 2011

New York Chief Judge Jonathan Lippman will report on the state of the judiciary today, and here's a preview: He'll say everything would be hunky-dory, if he only had more money. Welcome to hard times, Your Honor. But your case would be more compelling if you'd handle the cash you already get with more care. Lippman essentially stuck his thumb in Gov. Cuomo's eye -- budgetarily speaking. The new governor asked for restraint, and the jurist said, "Maybe for thee but certainly not for me." Cuomo laid a 10 percent cut on state-agency spending in the budget he proposed Feb. 1 -- while Lippman is demanding, and will get, a 5 percent increase in his. He'll get it because, as is the American custom, the judiciary is an independent branch of government, and therefore pretty much immune to legislative and executive budget-cutting. But that's all the more reason for a chief judge to practice self-restraint. Yet judicial spending since Lippman took office in 2009 is up 12.7 percent -- against 1.2 percent inflation. And it's up 28.8 percent over the last five years -- compared to an inflation rate of just 11.4 percent.

Meanwhile, here's a couple of nuggets not likely to be found in Lippman's remarks today:

* As The Post reported last week, Lippman & Co. are spending more than $23 million to convert an old Albany office building into, among other things, luxury suites for Court of Appeals justices. They're in town a scant 60-odd days a year, but they won't have to bother with hotel reservations.

* And speaking of out-of-town travel, The Post reported yesterday that Lippman himself is developing a taste for junkets -- having decamped to Vail and the Virgin Islands most recently.

New Yorkers expect shared sacrifice, which goes a long way to explaining Cuomo's popularity -- as outlined above. They certainly are not getting it from Jonathan Lippman -- nor, we suspect, will there be any meaningful commitment to it in today's speech. But it won't want for whining.

More From Lippman...

Lippman Backs Economies But Not at Cost of Access
The New York Law Journal by Joel Stashenko - February 16, 2011

ALBANY, NY - Chief Judge Jonathan Lippman vowed yesterday to vigorously pursue economies in the judicial system, but not to the point of denying access to the courts for people buffeted by hard times. "Surely, we could close courts or greatly reduce the number of days and hours our courts are open, but at what cost to our citizenry?" Judge Lippman asked during the annual State of the Judiciary address at the Court of Appeals. "What are the consequences? Do we tell a victim of domestic violence seeking a protective order to come back tomorrow or next week? Can we ignore constitutional and statutory speedy trial requirements and allow justice to be delayed at the expense of public safety and the rights and liberties that everyone is entitled to in this country?" Answering his own questions, Judge Lippman said, "Of course not…These are very difficult times that require all of us to pull together, but they are also the times when the courts and justice system matter more than ever."

See a video of Chief Judge Lippman's speech or read the State of the Judiciary address.

However, speaking with reporters after the speech, Judge Lippman downplayed apparent differences between the Judiciary and Governor Andrew M. Cuomo, who has complained that the courts are "not participating" in his efforts to close a projected $10 billion budget gap in the 2011-12 budget. Mr. Cuomo has mandated 10 percent spending cuts for the agencies he controls. The Judiciary's proposed budget would increase spending by 1.7 percent. Judge Lippman said he is not against considering cuts in the coming budget negotiations with the governor and the Legislature, as long as they do not affect access to the courts. "We're absolutely open, willing, receptive, to sacrifices," Judge Lippman said. "Everybody has to [sacrifice] in this state…But I will not abdicate my responsibilities as the chief judge of the state." With cuts of the magnitude proposed by Mr. Cuomo, Judge Lippman told reporters, "We would have to close down large parts of the court system and I don't think that's helpful for New York state, helpful for the governor and certainly not helpful for the people of this state and the judicial system." In his speech, Judge Lippman reiterated his support for a new rule that would require removing judges from cases involving attorneys or litigants from whom the judges have received large campaign contributions ($2,500 or more from individuals and at least $3,500 from firms or multiple parties) within the previous two years (NYLJ, Feb. 15). "In a state that elects 73 percent of its judges in partisan elections, these changes will go a long way toward putting New York at the forefront of national efforts to promote public confidence in the independence, fairness and impartiality of the Judiciary," he said. "I have no doubt that this new rule will generate a great deal of public comment, and I welcome it." The rule will be adopted after a 60-day comment period.

Other announcements yesterday by the chief judge included:

• Robert Fiske Jr. of Davis Polk & Wardwell and Kathryn S. Wylde, president of the Partnership of New York City, will be his two selections to the commission that will begin work on April 1 to make recommendations on pay and benefits for the state's 1,300 judges.

• William J. Leahy, former chief counsel to the Massachusetts Committee for Public Counsel Services, will head the new Indigent Legal Services Office.

• A pilot program will be introduced in Queens and Orange counties to assure legal representation for poor residential property owners at state-mandated pre-foreclosure conferences.

Pay Commission Choices

In addition to defending what he called the "constitutional mission" of the Judiciary to keep the courts open to all comers, Judge Lippman argued that the courts must provide judges with "fair compensation." To that end, he said that both Mr. Fiske and Ms. Wylde are well qualified to serve on a pay commission he hopes will recommend the first raise for judges since 1999, effective on April 1, 2012. Mr. Fiske, a former Southern District U.S. attorney, has the "wisdom to properly value the work" that judges perform, Judge Lippman said. And no one "better understands the connection between a strong economy and a well-qualified Judiciary" than Ms. Wylde, according to the chief judge. The pair will be among seven unpaid members of the commission (NYLJ, Dec. 1, 2010). Three members, including the chair, will be appointed by Mr. Cuomo, and one each by the Assembly speaker and the Senate majority leader. The Indigent Legal Services Office was created to move toward statewide oversight of the now-fractured legal assistance programs for low-income New Yorkers in criminal cases. Its board is chaired by Judge Lippman. The chief judge said that Mr. Leahy has a "superb record as an administrator and nearly four decades of experience" in the field of public defense. Judge Lippman said Mr. Leahy was recommended to him by Massachusetts Governor Deval Patrick and that state's former chief judge, Margaret Marshall. Judge Lippman also urged the expansion of civil legal services for the poor, calling for the adoption of a $25 million increase he has proposed in the Judiciary's next budget for such representation. He told reporters after his speech that he considers providing civil legal representation to poor people facing the loss of the "necessities of life"—housing and health care—to be akin to the duty that the U.S. Supreme Court recognized for the representation of indigent criminal defendants in its ruling in Gideon v. Wainright, 372 U.S. 335 (1963). "There is a moral and ethical obligation," Judge Lippman said. "I say to you, not to be a biblical scholar, which I'm not, but the Old Testament doesn't talk about rights, it talks about obligations. And this is our obligation." In particular, Judge Lippman said about two-thirds of those facing foreclosure do not have legal representation at state-mandated conferences before banks foreclose on residences. Under his proposed pilot program, legal services attorneys from the Legal Aid Society of New York City and from Hudson Valley Legal Services will be assigned to courthouses in Queens and Orange counties, respectively, to represent homeowners at pre-foreclosure conferences in as many cases as possible. After the conference, those attorneys will either keep the cases or refer them to legal service providers, pro bono attorneys or law school clinics. Judge Lippman said the two legal services providers have agreed to run the pilot program with no additional state funding, but he conceded that an expansion statewide would undoubtedly entail higher funding for legal aid groups. "I believe this approach is a major step toward addressing the foreclosure representation crisis in New York," Judge Lippman said. Joel Stashenko can be contacted at jstashenko@alm.com.

Thursday, February 17, 2011

Corrupt Kids For Cash Judge Faces Jury Decision

Ciavarella jury to return tomorrow morning
The Citizens Voice by Dave Janoski - February 17, 2011

SCRANTON, PA -- The jury in the kids-for-cash trial of former Luzerne County judge Mark A. Ciavarella Jr. has ended deliberations for the day and will return tomorrow morning at 8:30. U. S. District Judge Edwin Kosik announced the jury was leaving for the day at 3:55 p.m. after meeting for nearly 7 1/2 hours. The jury is trying to decide the guilt or innocence of Ciavarella, who is accused of accepting $2.8 million in kickbacks and bribes for placing juvenilies in for-profit detention centers. Ciavarella, his attorneys and several of his family members made small talk with members of the news media throughout the day outside of Kosik's courtroom. Federal prosecutors awaited the verdict in the U. S. Attorney's Office on another floor of the federal courthouse. Ciavarella could face decades in prison if convicted.

*********************Corrupt Kids For Cash Judge Trial Recap:

Monday, Feb. 7:

A six-man and six-woman jury is chosen from eight counties to hear the case of the United States of America v. Mark A. Ciavarella Jr.

Tuesday, Feb. 8:

IRS agent Ben Wylam details tracking payments to Ciavarella and another former judge, Michael T. Conahan. Nicholene DiPasquale of the Administrative Office of Pennsylvania Courts testifies Ciavarella did not report income prosecutors say he received from companies connected to two for-profit juvenile detention centers. Ex-Luzerne County Commissioner Thomas Makowski testifies to the closing of a county-owned juvenile detention center, opening the way for a private, for-profit center. Developer Robert K. Mericle begins his testimony on payments he made to Ciavarella as a reward for helping his company secure contracts to build two for-profit detention centers. Wednesday, Feb. 9: Mericle says he paid his close friends Ciavarella and Conahan $2.1 million in what he considered legal finder's fees for their help in securing construction contracts for the detention centers. He initially lied to federal agents and a grand jury about the payments to protect Ciavarella, he testifies. Robert J. Powell, former co-owner of the detention center, tells the court Ciavarella and Conahan pressed hard for kickbacks. He says he paid $590,000 to the judges disguised as rental payments on a Florida condo in 2004. He says he had another $143,500 in cash delivered to Conahan at Conahan's and Ciavarella's urging in 2006.

Thursday, Feb. 10:

Powell testifies Ciavarella and Conahan schemed to subvert a federal investigation into their finances. FBI agent James Glenn details how Ciavarella spotted his surveillance van outside a meeting he held with Conahan and Powell and repeatedly tried to open the van's locked doors. Patrick Owens, ex-treasurer of Powell's law firm, tells the jury he and another firm employee wrote and cashed more than a dozen checks, each worth less than $10,000 to avoid scrutiny by the U.S. Treasury Department, to amass $143,500 in cash at Powell's request in 2006. Powell testified the cash went to the judges. Former Conahan tipstaff Nick Callen testifies he delivered a sealed envelope and two sealed boxes from Powell to Conahan in 2005-2006. Powell law partner Jill A. Moran testifies she delivered two sealed boxes from Powell to Conahan in 2006.

Friday, Feb. 11:

Moran explains she delivered a FedEx box stuffed with cash to then-president judge Conahan at Powell's request in 2006. Doris Crowe, a state accountant, testifies the county received $6.5 million in federal funds to help pay for detaining juveniles at PA Child Care and other centers in 2002-2005. Paul McGarry, county human resources director, testifies Conahan instructed him to delete funding for a county-owned detention center from the proposed 2003 court budget. That cleared the way for Powell's for-profit center. Attorney Stephen Carpenito testifies he represented a company sued by Mericle before Ciavarella in January 2007. Ciavarella revealed he knew Mericle, but said they were not friends. Senior Deputy Attorney Timothy Keating testifies Conahan took steps to seal the record of a suit filed against two state Department of Public Welfare officials by Powell's PA Child Care LLC in 2004. Conahan did not reveal his friendship or financial ties to Powell, Keating said. Attorney Lawrence Durkin testifies Ciavarella ignored a motion to move a case against Mericle out of Luzerne County even though his client was from New York and the case involved a Lackawanna County property. Ciavarella did not reveal his ties to Mericle. Attorney Jeffrey McCarron testifies Ciavarella became irate when he asked if the judge had a personal relationship with Powell that would make it impossible for Ciavarella to be fair in a trial in which Powell represented the plaintiff. Lisa Davidson, the bookkeeper for Conahan's company, says Conahan instructed her to make false entries in the company's books to hide the fact $610,000 from Mericle went to Ciavarella, Conahan and a friend of Conahan's, Angela Sallemi. Accountant Michael DeCosmo, who prepared tax returns for Beverage Marketing and Pinnacle Group of Jupiter LLC, a company prosecutors say the judges used to launder kickbacks, tells the jury figures he used to prepare what prosecutors say were false returns came from Conahan and/or Davidson. Accountant Barry Spanial prepared personal tax returns for the Conahans and testifies Conahan asked him about the tax consequences of adding $105,000 to his 2003 income, but never reported that money when supplying tax documents to Spanial.

Monday, Feb. 14

Spanial says the Conahans reported $273,119 in taxable income on their 2006 return. An IRS agent later testified they actually had $394,580 in taxable income that year. Accountant Jerome Matlowski prepared the Ciavarellas' tax returns and says they never disclosed hundreds of thousands of dollars in alleged extra income in 2003 and reported more than $650,000 in rental income from a Florida condo in 2005 and 2006. Brian Bernston, a money laundering expert, testifies about various methods used to launder from illegal activity. IRS revenue agent Ray Eppley testifies Ciavarella and Conahan underreported income by $1.45 million and evaded $494,685 in federal taxes in 2003-2006. The defense began by calling Brian Stahl, Ciavarella's son-in-law, who testifies that Powell frequently visited the Ciavarella home in the company of the Conahans. Ciavarella's daughter, Nicole Oravic, testifies she worked part-time for the Powell Law Group in 2003-2005 and Powell was always very complimentary about her dad. Son Marco Ciavarella, testifies about a close, "very friendly" relationship between his dad and Powell. Wylam testifies he could not recall asking Powell in two interviews if Mark A. Ciavarella Jr. was present when Powell passed checks to Conahan. Under cross-examination, Wylam said Powell did tell him that he received instructions on wire transfers from Conahan and Ciavarella. Hazleton restauteur Gina Carrelli testifies she saw Powell pass cash to a state official, whom she did not name. She also testifies Powell claimed to have ownership stake in the Florida condo allegedly used to launder money.

Tuesday, Feb. 15:

Mark A. Ciavarella Jr. testifies he believed the finder's fees from Mericle and the rent payments from Powell were legitimate, but he admitted to filing false tax returns in 2003, 2005 and 2006 that omitted or mischaracterized the Mericle payments. Ciavarella denies extorting Powell and said he was unaware of any cash delivered to Conahan.

Wednesday, Feb. 16:

In closing arguments, Assistant U.S. Attorney Gordon Zubrod implores the jury to convict Ciavarella on all 39 counts, ranging from racketeering to money laundering. Defense attorney Al Flora Jr. concedes Ciavarella has admitted to filing false tax returns, but urged jurors to find Ciavarella not guilty on more serious counts of bribery and extortion.

Blog Archive

See Video of Senator John L. Sampson's 1st Hearing on Court 'Ethics' Corruption

The first hearing, held in Albany on June 8, 2009 hearing is on two videos:


               Video of 1st Hearing on Court 'Ethics' Corruption
               The June 8, 2009 hearing is on two videos:
         
               CLICK HERE TO SEE Part 1
               CLICK HERE TO SEE Part 2