Kids for cash scandal

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An image showing the large domed Luzerne County Courthouse in Wilkes-Barre as seen from across the Susquehanna River
Luzerne County Courthouse in Wilkes-Barre, Pennsylvania

The "kids for cash" scandal unfolded in 2008 over judicial kickbacks at the Luzerne County Court of Common Pleas in Wilkes-Barre, Pennsylvania. Two judges, President Judge Mark Ciavarella and Senior Judge Michael Conahan, were accused of accepting money from Robert Mericle, builder of two private, for-profit juvenile facilities, in return for contracting with the facilities and imposing harsh sentences on juveniles brought before their courts to increase the number of inmates in the detention centers.[1][2]

For example, Ciavarella sentenced children to extended stays in juvenile detention for offenses as minimal as mocking a principal on Myspace, trespassing in a vacant building, and shoplifting DVDs from Wal-mart.[3] Ciavarella and Conahan pled guilty on February 13, 2009, pursuant to a plea agreement, to federal charges of honest services fraud and conspiracy to defraud the United States (failing to report income to the Internal Revenue Service, known as tax evasion) in connection with receiving $2.6 million in payments from managers at PA Child Care in Pittston Township and its sister company Western PA Child Care in Butler County.[4][5] The plea agreement was later voided by a federal judge, who was dissatisfied with the post-plea conduct of the defendants, and the two judges charged subsequently withdrew their guilty pleas, raising the possibility of a criminal trial.[6]

A federal grand jury in Harrisburg, Pennsylvania returned a 48-count indictment[7] against Ciavarella and Conahan including racketeering, fraud, money laundering, extortion, bribery, and federal tax violations on September 9, 2009.[8][9] Conahan entered a revised guilty plea to one count of racketeering conspiracy in July 2010.[10] In a verdict reached at the conclusion of a jury trial, Ciavarella was convicted February 18, 2011 on 12 of the 39 counts he faced.[11][12]

Following the original plea agreement, the Pennsylvania Supreme Court ordered an investigation of the cases handled by the judges and following its outcome overturned several hundred convictions of youths in Luzerne County.[13] The Juvenile Law Center filed a class action lawsuit against the judges and numerous other parties, and the state legislature created a commission to investigate the wide-ranging juvenile justice problems in the county.[14][15] (See: JLC's growing list of related Court Documents[16])

Investigation[edit]

An investigation into improper sentencing in Luzerne County began early in 2007 as a result of requests for assistance from several youths received by the Philadelphia-based Juvenile Law Center. Lawyers from the law center determined that several hundred cases were tried without the defendants receiving proper counsel. In April 2008, the Juvenile Law Center petitioned the Pennsylvania Supreme Court seeking relief for alleged violation of the youths' civil rights. The application of relief was later denied, then reconsidered in January 2009 when charges of corruption against the judges surfaced.[17]

The Federal Bureau of Investigation and the Internal Revenue Service also investigated the two judges while probing practices in Luzerne County, although the exact dates and scope of the investigations by the two federal agencies were not made public.[18] Part of the investigation was revealed to have occurred during disciplinary hearings over the conduct of another former Luzerne County judge, Anne H. Lokuta.[19] Lokuta was brought before the Judicial Conduct Board of Pennsylvania in November 2006 to answer charges of using court workers to do her personal bidding, openly displaying bias against some attorneys arguing before her, and publicly berating staff to cause mental distress.[20]

The board ruled against Lokuta in November 2008 and she was removed from the bench. During the course of the disciplinary hearings, Lokuta accused then Judge Michael Conahan of bullying behavior and charged that he was behind a conspiracy to have her removed.[21] Lokuta aided the federal investigation into the "kids for cash" scheme prior to the determination of the disciplinary board, and a stay order was issued in March 2009 by the state Supreme Court in light of the ongoing corruption investigations, halting Lokuta's removal and the election that was to be held in May to replace her.[22]

Charges and pleas[edit]

A statement from the office of the United States Attorney for the Middle District of Pennsylvania outlined the charges against the two judges on January 26, 2009. The charges outlined in the information[23] described actions between 2000 and 2007 by both judges to assist in the construction and population of private juvenile facilities operated by the two Pennsylvania Child Care companies, acting in an official capacity in favor of the private prisons over the facility operated by Luzerne County.[18]

The U.S. Attorney charged that in 2002 Conahan, who at the time was President Judge of the court, used his authority to remove funding for the county-operated facility. The judges were alleged to have received "millions of dollars" in payments for the completion of a binding agreement between the court and the private facilities, co-owned by attorney Robert Powell, to use their services and the subsequent closing of the county facility.[24] The methods used to conceal the payments involved several parties and transactions which resulted in allegations of tax evasion by the two. Ciavarella and Conahan were also charged with "Ordering juveniles to be sent to these facilities in which the judges had a financial interest even when Juvenile Probation Officers did not recommend detention," according to the statement.[24]

The original, negotiated plea agreement called for both judges to serve up to seven years in prison, pay fines and restitution, and accept responsibility for the crimes.[1] However, on July 30, 2009, Judge Edwin M. Kosik of Federal District Court in nearby Scranton rejected the plea agreement, citing "post-guilty plea conduct and expressions from the defendants" that he ruled did not satisfy the terms of the agreement. Kosik wrote that Conahan and Ciavarella continued to deny their crimes even in the face of overwhelming evidence, and therefore did not merit sentences that were well below federal sentencing guidelines.[25][26] Attorneys for the two judges brought a motion requesting reconsideration of the judge's rejection of the plea agreement.[27] The motion was denied on August 24, 2009, and Ciavarella and Conahan subsequently withdrew their guilty pleas, an action which eventually resulted in a jury trial for Ciavarella and additional charges against the former judges.[6]

On September 9, 2009, a federal grand jury in Harrisburg, Pennsylvania returned a 48-count indictment[7] against Ciavarella and Conahan including racketeering, fraud, money laundering, extortion, bribery, and federal tax violations. Both judges were arraigned on the charges on September 15, 2009.[8][9] Ciavarella and Conahan entered pleas of not guilty to the 48-count indictment and remained free on one million dollar bail despite federal prosecutors' contentions that their bail should be raised since they faced the possibility of substantially more prison time and that there was evidence of their attempts to shield assets.[28]

Robert Powell, an attorney and co-owner of the two juvenile detention facilities at the heart of the scandal, pleaded guilty on July 1, 2009, to failing to report a felony and being an accessory to tax evasion conspiracy, in connection with $770,000 in kickbacks he paid to Ciavarella and Conahan in exchange for facilitating the development of his facilities.[5][29][30] The Pennsylvania Supreme Court temporarily suspended Powell’s law license on September 1, citing his criminal conviction.[31]

Robert Mericle, the prominent real estate developer who built the two juvenile detention facilities, pleaded guilty on September 3, 2009, to failing to disclose a felony, for not revealing to a grand jury that he had paid $2.1 million to Ciavarella and Conahan as a finder's fee. As part of his plea, Mericle agreed to pay $2.15 million to fund local children's health and welfare programs. Mericle faces up to three years in prison and a maximum $250,000 fine but will likely serve one year or even probation pursuant to his plea agreement.[29][32][33]

Sandra Brulo, the former Deputy Director of Forensic Services for the Luzerne County Juvenile Probation Office agreed to plead guilty in March 2009 to federal obstruction of justice. When she became aware that she had been named in the federal civil action, Brulo fabricated a recommendation concerning a juvenile who appeared before the Luzerne County Juvenile Court in September 2007. She backdated the fabricated recommendation and changed her original recommendation of detention to probation.[34]

Criminal verdicts[edit]

On February 18, 2011, following a trial, a federal jury convicted Ciavarella on 12 of the 39 counts he faced including racketeering, a crime in which prosecutors said the former judge used children "as pawns to enrich himself." In convicting Ciavarella of racketeering, the jury agreed with prosecutors that he and another corrupt judge had taken an illegal payment of nearly $1 million from a juvenile detention center's builder and then hidden the money.[11]

The panel of six men and six women also found Ciavarella guilty of "honest services mail fraud" and of being a tax cheat, for failing to list that money and more on his annual public financial-disclosure forms and on four years of tax returns. In addition, they found him guilty of conspiring to launder money. The jurors acquitted Ciavarella of extortion and bribery in connection with $1.9 million that prosecutors said the judges extracted from the builder and owner of two juvenile-detention centers, including allegations that Ciavarella shared in FedEx boxes stuffed with tens of thousands of dollars in cash.

Following Ciavarella's conviction, he and his lawyer appeared on the steps of the courthouse to give an impromptu press conference. The press conference was interrupted by Sandy Fonzo, whose son Edward Kenzakoski committed suicide after Ciavarella gave him a jail sentence, despite Kenzakoski's first-time offender status.[35]

On August 11, 2011, Ciavarella was sentenced to 28 years in federal prison as a result of his conviction.[36] He is currently being held at the Federal Correctional Institution, Pekin, a federal prison in Illinois which holds minimum and medium security inmates. He is scheduled for release in 2035, when he will be 85 years old--at his age, effectively a life sentence.[37] He appealed his conviction to the Third Circuit and it was rejected on July 25, 2013.[38]

On September 23, 2011, Conahan was sentenced to 17-and-a-half years in federal prison as a result of his pleading guilty to one count of racketeering conspiracy.[39] He is currently being held at a minimum security facility at the Federal Correctional Complex, Coleman in Florida. He is scheduled for release in 2026, when he will be 74 years old.[40]

On November 4, 2011, Powell was sentenced to 18 months in federal prison as a result of his pleading guilty to failing to report a felony and being an accessory to tax conspiracy. He was incarcerated at the Federal Prison Camp, Pensacola, a minimum security facility in Florida, and was released from a halfway house on April 16, 2013.[41][42] [43]

Robert Mericle's sentencing in connection with his pleading guilty to failing to report a felony has been delayed pending his testimony in the bribery trial of former Pennsylvania State Senator Raphael Musto, which is scheduled for June.[year needed] Mericle faces up to three years in prison, although he is likely to receive 12 to 18 months under United States Federal Sentencing Guidelines.[44][45]

Victim lawsuits[edit]

Acting under a rarely used power established in 1722 and reserved for extraordinary circumstances, known as "King's Bench jurisdiction",[46] the Pennsylvania Supreme Court appointed a special master on February 11, 2009 to review all juvenile cases handled by Ciavarella.[47] Senior Judge Arthur Grim of the Berks County Court of Common Pleas was appointed special master and returned his findings in an interim report dated March 11, 2009.[48] On March 26, 2009 the Supreme Court approved Grim's recommendations and ruled that Ciavarella had violated the constitutional rights of thousands of juveniles, and hundreds of juvenile convictions were ordered overturned.[13][49]

A class action lawsuit was filed by the Juvenile Law Center on behalf of the juveniles who were adjudicated delinquent by Ciavarella despite not being represented by counsel or advised of their rights. Besides naming Ciavarella and Conahan, the suit seeks damages under the civil portion of the Racketeer Influenced and Corrupt Organizations Act (RICO) against the judges' spouses and business associates, shell companies, prison operators, and Luzerne County.[15][50] Three other federal lawsuits filed on behalf of the victims have been consolidated with the Juvenile Law Center lawsuit into a master class action.[51] An amended master complaint was filed on August 28, 2009.[52]

In June 2010 an injunction was filed on behalf of PA Child Care, Western PA Child Care, and Mid Atlantic Youth Services, the companies that provided treatment programs at the juvenile detention centers,[53] to prevent the ordered destruction of thousands of juvenile records on the grounds the records are needed for the defense's case.[53]

On July 8, 2013, a three-judge panel of the Third Circuit Court of Appeals ruled in the case of Markel International Insurance Company v. Robert J. Powell, (his business partner) Gregory Zappala, et al., that the insurance company had no obligation to defend or indemnify the individuals or corporations involved, leaving the defendants liable for adverse judgments.[54]

Interbranch Commission on Juvenile Justice[edit]

In the aftermath of the federal charges and defendant pleas, the Pennsylvania General Assembly moved to create a commission to investigate the entire set of circumstances surrounding the miscarriage of justice in Luzerne County. Sponsored by Representative Todd Eachus of Butler Township in Luzerne County, House Bill 1648[55] established the Interbranch Commission on Juvenile Justice in July 2009. The commission comprises 11 members, appointed from each branch of government in Pennsylvania, with four members chosen by the judiciary, four by the legislature and three by the governor.[14]

In signing the legislation on August 7, 2009, Governor Ed Rendell castigated Ciavarella and Conahan, saying they "violated the rights of as many as 6000 young people by denying them basic rights to counsel and handing down outrageously excessive sentences. The lives of these young people and their families were changed forever."[14] Scheduled to meet a minimum of once per month, the commission was organized to investigate the actions of and damages caused by the two judges and review the state of the Luzerne County courts left in the wake of their tenures.[56][57] The commission was given power of subpoena and was required to complete its work and report its recommendations and findings to the three branches of state government by May 31, 2010.[58]

Popular culture[edit]

The scandal was featured in Capitalism: A Love Story, the 2009 documentary by Michael Moore.[59] A full-length documentary covering the scandal entitled Kids for Cash was released in February 2014,[60] and has been favorably reviewed.[61][62]

The scandal has also led to several portrayals in fictional works. Both the Law & Order: SVU episode "Crush" and an episode of The Good Wife featured corrupt judges sending children to private detention centers. An episode of Cold Case called "Jurisprudence" is loosely based on this event.[63][64][65]

See also[edit]

References[edit]

  1. ^ a b Urbina, Ian (March 27, 2009). "Despite Red Flags, Judges Ran Kickback Scheme for Years". New York Times. Retrieved 2009-05-02. 
  2. ^ Frank, Thomas (April 1, 2009). "Thomas Frank Says 'Kids for Cash' Incentivizes the Prison Industry". Wall Street Journal. Retrieved 2009-08-25. 
  3. ^ "Pennsylvania rocked by 'jailing kids for cash' scandal". 
  4. ^ Urbina, Ian (February 26, 2009). "70 Youths Sue Former Judges in Detention Kickback Case". New York Times. Retrieved 2009-08-25. 
  5. ^ a b Sisak, Michael (July 1, 2009). "Powell pleads guilty". The Times-Trubine. Retrieved 2009-08-26. 
  6. ^ a b Morgan-Besecker, Terrie (August 25, 2009). "Judges withdraw guilty pleas". Wikes-Barre Times Leader. Retrieved 2009-08-25. [dead link]
  7. ^ a b "Indictment – USA v. Conahan and Ciavarella". September 9, 2009. Retrieved 2009-09-12. [dead link]
  8. ^ a b Morgan-Besecker, Terrie (September 10, 2009). "Ex-judges hit with 48 counts". Times Leader. Retrieved 2009-09-11. 
  9. ^ a b "U.S. Attorney's Office News Release". September 9, 2009. Retrieved 2009-09-10. 
  10. ^ Morgan-Besecker, Terrie (April 25, 2011). "Hearing set for Ciavarella pension". Wilkes-Barre Times Leader. Retrieved 21 May 2011. 
  11. ^ a b "Ex-judge Mark A. Ciavarella Jr. guilty in 'cash for kids' case". The Philadelphia Daily News. Retrieved 2011-02-21. 
  12. ^ "Ciavarella won't fight for $250K pension". Wilkes-Barre Citizens Voice. April 26, 2011. Retrieved 21 May 2011. 
  13. ^ a b "Court Tosses Convictions Of Corrupt Judge". CBSnews.com. March 26, 2009. Retrieved 2009-05-02. 
  14. ^ a b c "Governor Rendell Signs Bill Creating Commission to Probe Juvenile Justice System". Pennsylvania Office of the Governor. August 7, 2009. Retrieved 2009-08-26. [dead link]
  15. ^ a b "Juvenile Law Center Files Federal Class Action Complaint on Behalf of Affected Luzerne County Children and Families". Juvenile Law Center. February 26, 2009. Retrieved 2009-08-26. 
  16. ^ "JLC's growing list of related Court Documents". Web.archive.org. 2010-05-16. Retrieved 2012-11-16. 
  17. ^ "Luzerne County". Juvenile Law Center. April 27, 2009. Archived from the original on 2010-04-12. Retrieved 2009-05-02. 
  18. ^ a b Peter Hall and Leo Strupczewski (January 28, 2009). "Judges to Serve More Than Seven Years in Prison After Pleading Guilty in Kickbacks Probe". The Legal Intelligencer. Retrieved 2009-08-26. 
  19. ^ Leo Strupczewski and Peter Hall (February 9, 2009). "Rumors Intensify About Investigation Into Allegations of Luzerne County Case-Fixing". Pennsylvania Law Weekly. Retrieved 2009-08-27. 
  20. ^ Morgan-Besecker, Terrie (November 5, 2008). "Board: Lokuta violated ethics". Wilkes-Barre Times Leader. Retrieved 2009-08-27. [dead link]
  21. ^ Morgan-Besecker, Terrie (August 8, 2009). "Witnesses back Lokuta claim of conspiracy". Wilkes-Barre Times Leader. Retrieved 2009-08-27. [dead link]
  22. ^ Morgan-Besecker, Terrie (March 26, 2009). "Ruling: Keep Lokuta seat off ballot". Wilkes-Barre Times Leader. Retrieved 2009-08-27. [dead link]
  23. ^ "UNITED STATES OF AMERICA v. MICHAEL T. CONAHAN and MARK A. CIAVARELLA, JR., Defendants". U.S. Department of Justice for the Middle District of Pennsylvania. January 26, 2009. Retrieved 2009-09-12. 
  24. ^ a b "Press Release". U.S. Department of Justice for the Middle District of Pennsylvania. January 26, 2009. Retrieved 2009-08-26. [dead link]
  25. ^ Urbina, Ian (July 31, 2009). "Plea Agreement by 2 Judges Is Rejected In Pennsylvania". New York Times. Retrieved 2009-08-27. 
  26. ^ "Memorandum and Order of Judge Kosik". United States District Court for the Middle District of Pennsylvania. Retrieved 2009-08-25. 
  27. ^ Leo Strupczewski and Hank Grezlak (August 21, 2009). "Former Pa. Judges Ask for Reconsideration of Rejected Pleas". The Legal Intelligencer. Retrieved 2009-08-27. 
  28. ^ Morgan-Besecker, Terrie (September 16, 2009). "Ex-jurists plea, still free Magistrate judge declines to raise bail. Federal prosecutors see Conahan, Ciavarella as flight risks.". Timesleader.com. Retrieved 2009-10-05. 
  29. ^ a b Dale, Maryclaire (August 14, 2009). "Luzerne builder latest to admit guilt in scandal". Associated Press/The Morning Call. Retrieved 2009-08-26. [dead link]
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  31. ^ Lewis, Edward (September 2, 2009). "Pa. court suspends Powell’s law license Action taken as Butler Twp. lawyer awaits sentencing in federal corruption probe.". Timesleader.com. Retrieved 2009-09-06. [dead link]
  32. ^ "United States v. Robert K. Mericle". The United States Attorney's Office, Middle District of Pennsylvania. Retrieved 2009-08-27. 
  33. ^ Morgan-Besecker, Terrie (September 3, 2009). "Mericle pleads guilty". The Times Leader. Retrieved 2009-09-03. [dead link]
  34. ^ "United States v. Sandra Bruno". The United States Attorney's Office, Middle District of Pennsylvania. Retrieved 2009-08-25. 
  35. ^ Mom blames son's suicide on Luzerne County judge in 'kids for cash' case. Associated Press. February 22, 2011
  36. ^ Michael Rubinkam. Pa. judge gets 28 years in 'kids for cash' case[dead link]. The Associated Press
  37. ^ "Federal Bureau of Prisons". Bop.gov. Retrieved 2012-07-08. 
  38. ^ Court Denies Ciavarella Appeal. The Times-Tribune (Scranton). 25 July 2013. Retrieved 1 August 2013.
  39. ^ Staff Report (2011-09-23). "Former Luzerne judge Conahan sentenced to 17.5 years – News". The Times-Tribune. Retrieved 2012-07-08. 
  40. ^ "Federal Bureau of Prisons". Bop.gov. Retrieved 2012-07-08. 
  41. ^ "News – The Times-Tribune". M.thetimes-tribune.com. 2011-12-28. Retrieved 2012-07-08. 
  42. ^ "Federal Bureau of Prisons". Bop.gov. Retrieved 2012-07-08. 
  43. ^ "News – The Citizens Voice". citizensvoice.com. 2013-04-16. Retrieved 2013-04-27. 
  44. ^ Dave Janoski (STAFF WRITER) (2011-12-12). "As he awaits sentencing, Mericle continues community contributions – News". The Times-Tribune. Retrieved 2012-07-08. 
  45. ^ Michael R. Sisak (Staff Writer) (2011-12-30). "Judge frees up Mericle money – News". Standard Speaker. Retrieved 2012-07-08. 
  46. ^ "AOPC Chief Counsel Testifies on "King’s Bench" Authority as an Important Safety Valve". Administrative Office of Pennsylvania Courts. August 3, 1995. Archived from the original on 2011-10-16. Retrieved 2009-08-27. 
  47. ^ Morgan-Besecker, Terrie (February 12, 2009). "Judge picked to review Ciavarella juvenile cases". Wikes-Barre Times Leader. Retrieved 2009-08-27. [dead link]
  48. ^ Grim, Arthur (March 11, 2009). "First InterimReport and Recommendations of the Special Master". Supreme Court of Pennsylvania. Retrieved 2009-08-27. [dead link]
  49. ^ Learn-Andes, Jennifer (March 27, 2009). "Juvenile records to be erased". Wikes-Barre Times Leader. Archived from the original on 2009-04-06. Retrieved 2009-08-27. 
  50. ^ "Juvenile Law Center Adds Luzerne County as a Defendant in Federal Class Action Lawsuit". Juvenile Law Center. April 27, 2009. Retrieved 2009-08-26. 
  51. ^ Sisak, Michael (June 11, 2009). "Attorneys agree to a consolidated lawsuit against Ciavarella, Conahan". The Citizen's Voice. Retrieved 2009-09-06. [dead link]
  52. ^ "Amended Master Complaint". August 27, 2009. Retrieved 2009-09-09. [dead link]
  53. ^ a b "Juvie papers’ destruction blocked". Timesleader.com. June 10, 2010. Retrieved July 2, 2010. 
  54. ^ Opinion of the Court Nos. 12-2016, 2013. Retrieved 1 August 2013
  55. ^ "House Bill No. 1648". The Pennsylvania General Assembly. June 25, 2009. Retrieved 2009-08-26. 
  56. ^ Swift, Robert (August 21, 2009). "Juvenile justice commission's first meeting set for next week". Wilkes-Barre Citizen Voice. Retrieved 2009-08-26. [dead link]
  57. ^ "Democratic leaders name nationally recognized expert to Interbranch Commission on Juvenile Justice". Pennsylvania House Democratic Caucus. August 17, 2009. Retrieved 2009-08-28. 
  58. ^ Swift, Robert (August 7, 2009). "Rendell to sign legislation creating corruption commission". Wikes-Barre Citizen Voice. Retrieved 2009-08-26. [dead link]
  59. ^ Rich Drees (18 February 2011). Judge Featured In Moore’s CAPITALISM: A LOVE STORY Found Guilty Of Racketeering. Film Buff Online. Retrieved 6 February 2014. See also: The 'Kids for Cash' Scandal from 'Capitalism: A Love Story'.
  60. ^ http://www.imdb.com/title/tt2925642/
  61. ^ [1]
  62. ^ [2]
  63. ^ stevelaudig says:. "Ripped from the Headlines: Greed, Corruption, and Hate Crimes in Northeastern Pennsylvania | The Public Record". Pubrecord.org. Retrieved 2012-11-16. 
  64. ^ "Wilkes-Barre, news, sports, obituaries, and classifieds for Luzerne County and Scranton | The Times Leader, Wilkes-Barre, Scranton PA – www.timesleader.com". Archives.timesleader.com. Retrieved 2012-11-16. 
  65. ^ Michael R. Sisak (Staff Writer) (2009-12-17). "County judges provide TV fodder – News". Standard Speaker. Retrieved 2012-11-16. 

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