U.S. v. Conahan and Civarella: Corrupt Receipt of Bribe/Reward for Official Action Concerning...

Case 3:09-cr-00272-EMK Document 1-2 Filed 09/09/09 Page 1 of 78

UNITED STATES DISTRICT COURT FOR THE MIDDLE DISTRICT OF PENNSYLVANIA

UNITED STATES OF AMERICA

v.

MI CHAEL T. CONAHAN and MARK A. CIAVARELLA, JR.,

Defendants.

THE GRAND JURY CHARGES:

I N D I C T M E N T

Count 1

18 u . s . c . 1 9 62 ( c ) {Racketeering )

A. THE PARTIES

FILED HARRRI JRti. PA

SP 9- 2009

1 . At a l l t ime s material to thi s Indic tment, the def endants

MICHAEL T . CONAHAN and MARK A . C IAVARELLA, JR. were j udges of the

Court of Common P leas for Luzerne County, Pennsylvania. Between

approximately January of 20 0 2 and January o f 20 0 7 , MICHAEL T.

CONAHAN served as Pres ident Judge for Luzerne County. Between

approximately 1 9 9 6 and November of 20 0 8, MARK A. C IAVARELLA, JR .

served as Judge o f the Juvenile Court for Luzerne County. In

approximately January of 20 0 7, MARK A. CIAVARELLA, JR. was named

Pre sident Judge f or Luzerne County .

2. As j udge s of the Court of Common Pleas, the de f endants

MICHAEL T. CONAHAN and MARK A. C IAVARELLA, JR. owed a f iduciary

duty to the c i t i z ens of the Commonwealth of Pennsylvania and to

the Judic i ary of the Commonwea l th of Pennsylvania and were

Page 45, Counts 15-24: Corrupt receipt of bribe/reward for official action concerning programs receiving federal funds 18 USC 666

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required to file an annual statement of financial interests with

the Administrative Office of the Pennsylvania Courts, reporting

the source of any income, direct or indirect. The Administrative

Office of the Pennsylvania Courts maintains a number of offices,

including an office in Philadelphia County, Eastern District of

Pennsylvania.

B. THE ENTERPRISE

3. At all times material to this Indictment, the Court of

Common Pleas for Luzerne County, part of the Judicial Branch of

the government of the Commonwealth of Pennsylvania, as

established by Article 5 of the Pennsylvania Constitution and by

the Pennsylvania Judicial Code, constituted an "enterprise" as

defined in Title 18, United States Code, Section 1961(4)

(hereinafter referred to as 11the Enterprise11 ) . The Enterprise

was engaged in, and its activities affected, interstate commerce.

C. THE PURPOSE OF THE DEFENDANTS

4. The defendants MICHAEL T. CONAHAN and MARK A.

CIAVARELLA, JR. abused their positions within the Enterprise to

enrich themselves by improperly taking payments and other things

of value from individuals and organizations doing business with

the enterprise.

D . MEANS AND METHODS OF THE DEFENDANTS

5 . Between approximately June of 20 0 0 and January 1, 2 0 0 7 ,

the defendants MICHAEL T. CONAHAN and MARK A. CIAVARELLA, JR.

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abused the i r pos i t i ons wi thin the enterpri s e and violated the

f iduciary duty they owed to the c i t i zens o f the Commonwealth of

Pennsylvania and to the Judiciary of the Commonwea l th of

Pennsylvania by secre t ly deriving more than $2, 800, 000 in income,

in addit ion to the compensation to which they were lawful ly

ent itled, in exchange for the i r of f icial a c t ions and ant i c ipated

o f f i c ial act i ons . The actions f rom which they derived improper

income inc luded, but were not l imi ted to : entering into

agreements guarantee ing placement of j uveni le o f f enders with PA

Child Care, LLC ( hereinafter referred to as " PA Chi ld Care" ) and

Western PA Child Care, LLC (hereinafter re ferred to as "Western

PA Chi l d Care ) ; taking o f f icial act ion to remove funding f rom the

Luzerne County Court budget for the Luzerne County j uveni le

detention f a c i l i ty, e f f ect ive ly c los ing the county- run youth

detent ion cente r ; fac i l itating the construct ion of j uveni le

detention f ac i l it i e s and an expans ion to one of those fac i l it i e s

by PA Chi ld Care and Western PA Chi ld Care ; dire c t ing that

j uvenile of f enders be lodged at j uveni le detenti on f ac i l i t ies

operated by PA Chi ld Care and Wes tern PA Chi ld Care ; summari ly

grant ing motions to seal the record and for inj unc t ive rel ie f in

a c ivil case related to PA Child Care ; and, through the i r

act ions, as s i s t ing P a Chi ld Care and Western PA Chi ld Care to

secure agreement s with Luz e rne County worth tens of mi ll ions of

dol lars for the placement of j uveni le offenders, inc luding an

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agreement i n late 20 0 4 wort h approximately $58, 0 0 0, 0 0 0.

6 . The def endants employed a number of s chemes in an

attempt to hide the income they received including, but not

l imi ted to, caus ing income in the form of cash, checks and wire

trans fers to pass through intermediaries and c aus ing false

records to be c reated .

7 . In approximately June o f 20 0 0 , the def endant MARK A .

CIAVARELLA, JR. , whose dut i e s then inc luded pres iding over

juveni l e proceedings as a judge of the Court o f Common Pleas for

Luzerne County, had discus s ions with an attorney who had a law

practice in Luzerne County, hereinaf ter referred to as

" PARTICIPANT #1 , " who was interested in cons truct ing a juvenile

detent ion f ac i l i ty in Luzerne County . De f endant MARK A .

CIAVARELLA, JR . introduced PARTICIPANT #1 to a contractor

( hereinaf ter referred to as " PARTICIPANT #2") who was a f riend of

de fendant MARK A . CIAVARELLA, JR. , for the purpose of locating

land for the juveni le f ac i l i ty and for constructing the fac i l i ty.

8 . PARTICIPANT #1 and another person, doing bus iness as PA

Child Care , acquired land in Luzerne County and entered into an

agreement with PARTICIPANT #2 to const ruc t a juveni l e de tention

center to be operated by PA Child Care .

9 . On or about January 29 , 20 0 2 , de f endant MICHAEL T .

CONAHAN, ac t ing in his capac i ty as Pres ident Judge of Luzerne

County, signed a " Plac ement Guarantee Agreement " between PA Chi l d

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Care and the Court of Common Pleas for Luz erne County to house

juvenile o f f enders at the PA Chi ld Care f ac i l i ty. The "Placement

Guarantee Agreement " provided that the Court o f Common Pleas for

Luzerne County would pay PA Chi ld Care the annual "Rental

Ins tal lment " sum of $1 , 314 , 000 and stipulated that "[t]he

obl igation of the Court to make payment of the Rental

Ins tal lment s sha l l be absolute and uncondit ional. "

10. In or about December, 2002, de f endant MICHAEL T .

CONAHAN, act ing in his capaci ty as Pres ident Judge of Luzerne

County, took o f f ic ial act ion to remove funding f rom the Luzerne

County Court budget for the Luzerne County juvenile detent ion

fac i l i ty . The prac t ical e f fe c t of this act ion was to c lose the

Luzerne County youth detention center .

1 1 . In or before January of 2003, de fendant MICHAEL T .

CONAHAN and de f endant MARK A . CIAVARELLA, JR . arranged to receive

a payment in the amount of $9 9 7,600 in connect ion with the roles

they played as judge s in accomp l ishing the cons t ruct ion of the PA

Chi ld Care juveni l e detent ion fac i l ity .

12 . In order to conceal the $9 9 7 ,600 payment to def endants

CONAHAN and CIAVARELLA, JR . , PARTICIPANT #1 and PARTICIPANT #2

s igned a wri tten "Regi stration and Commi s s ion Agreement" prepared

by PARTICIPANT #2 and backdated to February 1 9 , 2002, which

purported to be an agreement f or PARTICIPANT #2 t o pay a broker ' s

fee of $9 9 7,600 to PARTICIPANT #1 . In fact, however, a large

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port ion of the money was paid to defendants MI CHAEL T. CONAHAN

and MARK A. CIAVARELLA , JR.

1 3. MICHAEL T. CONAHAN and MARK A. CIAVARELLA, JR. engaged

in a series of f inanc ial transactions, over t ime, des igned to

conceal the $9 9 7, 6 0 0 payment made to them. On January 21, 20 0 3,

$6 1 0, 0 0 0 was wire t rans ferred by PARTICIPANT #2 to an attorney

trust account of an attorney other than PARTICIPANT #1 . The

remaining $387, 6 0 0 was wire trans f erred by PARTICIPANT #2 to a

bank account under the control of PARTICIPANT #1.

1 4 . Thereaf ter, on January 28, 20 0 3, the $6 1 0 , 0 0 0 in the

attorney t rus t account was wire trans ferred to a bank account of

Beverage Market ing of PA, Inc . , a bus ine s s enti ty control led by

de fendant MICHAEL T. CONAHAN.

- - -

1 5 . I n a series of f inanc ial transact ions thereaf t er, a

portion of the $6 1 0, 0 0 0 payment was passed from de fendant MICHAEL

T . CONAHAN to defendant MARK A. CIAVARELLA, JR. For example, on

or about January 28, 20 0 3, the de f endant MICHAEL T. CONAHAN

directed that $33 0 , 0 0 0 of the $6 1 0 , 0 0 0 be wire t rans f erred to a

bank account control led by the de f endant MARK A. CIAVARELLA, JR. ;

on or about Apr i l 30, 20 0 3, the de fendant MI CHAEL T. CONAHAN

directed that an additional $7 5 ,0 0 0 of the $6 1 0, 0 0 0 be wire

trans ferred to a bank account control led by the def endant MARK A.

CIAVARELLA, JR . ; on or about July 1 5 , 20 0 3, the de f endant MICHAEL

T . CONAHAN directed that an additional $7 5 , 0 0 0 of the $6 1 0, 0 0 0

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wire t rans ferred to a bank account under the control of the

de fendant MARK A . CIAVARELLA , JR. ; on or about Augus t 1 3 , 2 0 0 3 ,

the de fendant MI CHAEL T . CONAHAN direc ted that an addi tional

$ 2 5 ,0 0 0 of the $ 6 10 ,0 0 0 be wire trans ferred to a bank account

under the control of a third party; and , on or about August 2 0 ,

2 0 0 3 , the de f endant MI CHAEL T. CONAHAN dire cted that an

addi t ional $ 1 0 5 ,00 0 o f the $ 6 1 0 ,0 0 0 be trans ferred to a bank

account under the control of the de fendant MI CHAEL T. CONAHAN.

1 6 . T o conceal the payment s to de fendant s MI CHAEL T.

CONAHAN and MARK A. CIAVARELLA , JR. , de f endant MI CHAEL T. CONAHAN

dire c ted that fals e entrie s be made in the books and re cords of

Beverage Marke ting of PA , Inc.

17. To further conceal the $9 9 7 , 6 0 0 payrt1nt -c: MIl1AEL

T. CONAHAN and MARK A . CIAVARELLA , JR., a port ion of the $ 3 8 7 ,6 0 0

wire trans f er made by PARTICI PANT #2 to PART ICI PANT #1 o n January

2 8 , 2 0 0 3 , was paid to the de fendants MI CHAEL T. CONAHAN and MARK

A. CIAVARELLA , JR. in a seri es of f inanc ial trans ac t ions which

occurred over time. One o f those trans act ions oc curred on or

about Augus t 2 9 , 2 0 0 3 , when a check in the amount of $ 3 2 6 ,0 00 ,

drawn on a bank account unde r the control o f PARTICIPANT #1 was

depo sited into a bank account maintained in the name of the wife

of de f endant MI CHAEL T . CONAHAN and under the c ontrol o f the

de fendant MICHAEL T . CONAHAN .

1 8 . Due to the suc c e s s o f the juveni le det ent ion faci l i ty

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operated in Luzerne County , PARTICIPANT #1 and his partner , doing

bus ine s s as Western PA Chi ld Care , constructed a juvenile

detent ion faci l ity in western Pennsylvania . PARTICIPANT #2, the

same contractor who bui l t the f ac i l i ty in Luz erne County , was

employed to cons truct the Wes tern PA Chi ld Care f ac i l i ty. In

July of 2005, upon completion of cons t ruct ion , a $ 1, 000, 000

payment was made to defendant s MICHAEL T . CONAHAN and MARK A .

CIAVARELLA , JR . by PARTICI PANT #1 .

1 9 . I n order t o conceal the payment t o defendants CONAHAN

and CIAVARELLA, JR . , PARTICIPANT #1 and PARTICIPANT #2 s igned a

wri tten "Regi s t ration and Commiss ion Agreement " prepared by

PARTICIPANT #2 which purported to be an agreement for PARTICIPANT

#2 to py a broke r ' s fee of $ 1, 000, 000 to PARTICIPANT #1. In

fac t , however , the money was wire transferred by PARTI CIPANT #2

to a bank account of the Pinnacle Group of Jupite r , LLC , a

bus iness ent i ty owned by the wives of MICHAEL T. CONAHAN and MARK

A . CIAVARELLA, JR .

20. PARTICIPANT #1 and h i s partner , doing bus iness as PA

Chi ld Care , cons truc ted an add i t ion to the juveni l e detent ion

fac i l ity in Luz e rne County . PARTICIPANT #2, the same contractor

who bui l t the fac i l ity , was employed to complete the expansion

project and , in February of 2006, upon complet ion of construction

of the addi t ion , a $ 1 50,000 payment was made to defendant s

MICHAEL T. CONAHAN and MARK A . CIAVARELLA , JR .

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2 1 . In order to conceal the payment to de fendant s CONAHAN

and CIAVARELLA , JR . , PARTICI PANT # 1 and PARTI C I PANT #2 s igned a

wr itten "Regi s t rat ion and Commiss ion Agre ement" prepared by

PARTI CIPANT # 2 whi ch purported to be an agreement f or PARTICIPANT

#2 to pay a broker's f ee of $1 5 0 , 000 to PARTICI PANT #1 . In fact ,

howeve r , the money was wire trans ferred by PARTICIPANT # 2 to a

bank account o f the Pinnacle Group of Jupi ter , LLC , a bus ine s s

entity owned by the wive s o f MI CHAEL T. CONAHAN and MARK A.

CIAVARELLA , JR .

2 2 . In approximate l y February of 2 003 , when cons truct ion of

the PA Child Care juvenile de tention facility was compl et ed ,

de fendant MARK A. CIAVARELLA , JR . , in his capacity as a juveni le

co11:r:_t juge, })eg:an di rect i!lg that youthful o f fE:_!1de rs be sent to

that faci l i ty . Between approximately February of 2 003 and

January 1 , 2 007 , the de fendant s MICHAEL T . CONAHAN and MARK A .

CIAVARELLA , JR . demanded and rece ived f rom PARTICI PANT #1

hundreds o f thous ands of do ll ars in payment s for the i r past and

ant icipated future o f ficial act ions re lating to PA Chi ld Care and

We stern PA Chi l d Care and took s teps to conceal and disgui s e the

nature , location , s ource , owne rship and cont rol o f the money pa id

by PARTI C I PANT # 1 .

2 3 . Some of the payment s we re made by checks drawn on one

or more bank accounts under the control of PARTI CI PANT #1 and

were made payable to the Pinnacle Group of Jupi ter , LLC . The

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payments inc luded, but were not necessarily l imited to, the

fol lowing : $ 1 8,000 paid on or about January 1 3, 2004 ; $ 5 2, 000

paid on or about January 1 3, 2004 ; $ 7 8,000 paid on or about

February 1 5 , 2004 ; $ 7 5 , 000 paid on or about February 15, 2004 ;

$4 7 ,000 paid on or about February 15, 2004 ; $ 7 5 ,000 paid on or

about April 30, 2004 ; and $25 ,000 paid on or about April 30,

2004 .

24 . To conceal the payment s to de fendant MICHAEL T . CONAHAN

and de fendant MARK A . CIAVARELLA, JR . , PARTICIPANT #1 made false

notat ions on the checks and de fendant MICHAEL T . CONAHAN directed

that false entries be made in the books and records of Pinnacle

Group of Jup i t e r, LLC and Beverage Market ing of PA, Inc.

25. In addi t ion some Qf_ the

were made by wire t ransfers made f rom one or more bank accounts

under the control o f PARTICIPANT #1 and were t ransferred to an

account under the control of the P innac le Group of Jupiter, LLC .

The payment s inc luded, but were not necessar i ly l imited to, the

following : $ 120,000 trans ferred on July 12, 2004 ; and $ 100, 000

trans ferred on September 23, 2004 .

26 . Addi t ional payments to the de fendants f rom PARTICIPANT

#1 were cash payments. Those cash payments included, but were

not neces sarily l imited to, the following: $ 4 2,000 paid on or

about Augus t 1 6 , 2006 ; $20,000 paid on or about November 1, 2006 ;

$ 5 0 , 000 paid on or about November 20, 2006 ; $ 31, 5 00 paid on or

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about December 18 , 2 0 06 .

2 7 . In order to conceal the more than $2,8 0 0 , 0 0 0 in

unlawful payments they received , the def endants MICHAEL T .

CONAHAN and MARK A . CIAVARELLA , JR . knowingly and intent ional ly

f i led materially false annual statements of financ ial interests

with the Admini strat ive Office of the Pennsylvania Courts in

which they failed to disc lose the s ource o f these payments and in

which they fai led to disclose their f inanc ial relationship with

PARTICIPANT #1 , PARTICIPANT #2 , PA Child Care and Western PA

Chi ld Care , all of which were material mat ters .

E. THE PATTERN OF RACKETEERING ACTIVITY

2 8 . The pattern of racketeering act ivity , as def ined in

which the de fendant s conducted and partic ipated in the conduct of

the af fairs of the enterpri se , inc luded the following

racke teering ac t s , among others :

a . Act One - W ire Trans fers Made In Connec tion With Cons truction

of PA Chi ld Care Juveni le Detent ion

2 9. Between on or about June of 2 0 0 0 and on or about

January 1 , 2 0 0 4 , the exact dates being unknown , in the Middle

Dis trict of Pennsylvania , and els ewhere , the de fendant s MICHAEL

T. CONAHAN and MARK A . CIAVARELLA , JR . devi sed and intended to

devi s e a material scheme and art i f ice to defraud and deprive the

Judic iary o f the Commonwealth of Pennsylvania and the c i tizens of

11


the Commonwealth of Pennsylvania of the ir rights to the honest services of MICHAEL T. CONAHAN and MARK A CIAVARELLA, JR. ,

performed f ree f rom dec eit , favori t ism, bias, s e l f - enrichment,

sel f - deal ing, concealment, and conf l i c t s of interest.

30. The def endants MICHAEL T. CONAHAN and MARK A.

CIAVARELLA, JR. , together with other persons known and unknown,

committed the fol lowing act s, any one of which alone const itutes

Racketeering Ac t One.

i. RACKETEERING ACT 1 . 1

31 . On or about January 21 , 2003, for the purpose of

execut ing the s cheme and art i f ice to defraud and deprive the

c i t i zens of Luzerne County and the Commonwealth o f Pennsylvania

- e f.--t he :i.-r r-i 9-ht--t-e-1;-he-nene s &- -s -eFVi Ge-s-e-f- -t.ne--GI.-e fe-ndant-S-,- tJ:e- - - - -

defendants M ICHAEL T. CONAHAN and MARK A. CIAVARELLA, JR.

knowingly t ransmi t ted and caused to be transmi tted by means of

wire communicat ion in interstate or foreign commerce a wire

trans fer of $6 10, 000 to an attorney escrow bank account, in

violat ion of T i t le 1 8 , Uni ted States Code, 2, 134 3 and 1 34 6 .

i i . RACKETEERING ACT 1. 2

32 . On or about January 24 , 2003, for the purpose of

executing the s cheme and art i f ice to de fraud and deprive the

c i t i z ens of Luz e rne County and the Commonwea l th o f Pennsylvania

of their right to the hone s t servi ces of the de fendants, the

defendants MICHAEL T. CONAHAN and MARK A. CIAVARELLA, JR .

12


knowingly transmitted and caused to be transm itted by means o f

wire communicat ion in interstate o r foreign c ommerce a wire

transfer of $387 , 600 to an attorney bank account, in violation o f

Tit l e 18, United States Code , 2 , 134 3 and 1 34 6 .

b. Act Two - Made to Conahan and Ciavarel la In

Connec t i on With Construction o f Western PA Chi ld Care Juvenil e Detention

33 . Between on or about January 1, 2004 and on or about

July 1 5 , 2005, the exac t dates be ing unknown, i n the Middle

D i s t rict of Pennsylvania, and e l sewhere, the defendants M ICHAEL

T. CONAHAN and MARK A . CIAVARELLA, JR. dev i s e d and intended to

devise a material s cheme and art i f ice to def raud and deprive the

Judiciary o f the Commonweal th of Pennsylvania and the c i t i z ens of --

- - --

-- ---- ---- --- -----------

-----

-

-

the Commonwealth of Pennsylvania of the ir rights to the honest

services of MICHAEL T. CONAHAN and MARK A CIAVARELLA, JR . ,

performed free f rom dec e it, favori tism, bias, s e l f - enrichment,

sel f-deal ing, concealment and conf l i c t s of intere st.

34 . On or about July 15 , 2005, for the purpose of execut ing

the scheme and art i f ic e to def raud and deprive the c iti z ens of

Luzerne County and the Commonwealth of Pennsylvania of the i r

right t o the hones t servic e s o f the defendants, the de fendants

MICHAEL T . CONAHAN and MARK A . CIAVARELLA , JR . knowingly

transmitted and caused to be transmi t ted by means of wire

communicat ion in inters tate or fore ign commerce a wire t rans fer

of $1, 000, 000 to a bank account o f the Pinnac l e Group of Jupiter,

1 3


LLC , in violat i on o f Titl e 18, Uni ted States Code, 2, 134 3 and

134 6 .

c . Act Three - o f Made to Conahan and Ciavarel la In Connection

With of PA Chi ld Care Juveni l e Detent ion

35 . From on or about January 1, 20 0 5 to on or about

February 3, 20 0 6, the exact dates being unknown, in the Middle

District of Pennsylvania, and e l sewhere, the def e ndants MICHAEL

T . CONAHAN and MARK A. CIAVARELLA , JR. devi sed and intended to

devise a material scheme and art i f ice to de fraud and deprive the

Judic iary o f the Commonwealth of Pennsylvania and the c i t i z ens of

the Commonweal th o f Pennsylvania of their rights to the honest

services of MICHAEL T . CONAHAN and MARK A CIAVARELLA, JR.,

performed f ree f rom dec e i t , favoritism , bias , s e l f - enrichment,

se l f - dealing, concealment , and conf l ic ts of intere st.

36 . On or about February 3 , 20 0 6, for the purpose o f

executing the scheme and art i f ice t o de fraud and deprive the

c i t i z ens of Luz erne County and the Commonwealth o f Pennsylvania

of the i r right to the hone s t services of the de f e ndants , the

defendants MICHAEL T . CONAHAN and MARK A . CIAVARELLA , JR .

knowingly transmitted and c aused to be transmitted by means of

wire communicat ion in interstate or f oreign commerce a wire

trans fer of $ 150,0 0 0 to a bank account of the Pinnacl e Group of

Jupiter, LLC , in violation of Title 18, United S tates Code , 2,

134 3 and 134 6 .

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d . Act Four - Paid to Conahan and Ciavarel la On

3 7 . In furtherance of the of fense , the de fendants MI CHAEL

T. CONAHAN and MARK A . CIAVARELLA , JR. , committed the fol lowing

acts , any one of which alone constitutes Racketeering Act Four .

i . RACKETEERING ACT 4.1 ( Extortion Under Color of Of f icial Right - Checks Totaling $ 7 0 , 000)

3 8 . On o r about January 2 0 , 2 004 , in the Middle District

of Pennsylvania, and e l s ewhere , the de fendants MICHAEL T . CONAHAN

and MARK A . CIAVARELLA , JR . did knowingly , intenti onally and

wi l fully affect, and attempt to af fect , interstate commerce and

the movement of arti c l e s and commodities in commerce by

extortion , as tho se terms are de f ined in Title 18 , United States

_ __ ]_;_ tl].a_t is , th cle_f:Qdapts MII:mEL 'I'. CP:t'f


checks totaling $7 0 ,0 0 0 , which were payab le from a bank account

control l ed by PARTI CI PANT # 1 , as cons iderat i on for violations of

known legal dut ies o f the defendant s as pub l i c servants , in

violat ion o f Ti t l e 1 8 , Pa.C . S . 4 7 0 1 ( a ) ( 3 ) .

e. Act Five - Paid to Conahan and Ciavarella Between 2 0 0 4 and

4 0 . In furthe rance o f the o f f ense , the de fendant s MI CHAEL

T . CONAHAN and MARK A . CIAVARELLA , JR . , committed the following

acts , any one of which al one cons t i tutes Racketee ring Act Five .

i . RACKETEERING ACT 5 . 1 ( Extort i on Under Color of O f f icial Right - Checks Totaling $2 0 0 , 0 0 0 )

4 1 . Between on or about February 15, 2004 and o n or about

February 2 4 , 2 0 0 4 , in the Middle D i s trict of Penns ylvania , and

e l s ewhere , t he de fendants MI CHAEL T . CONAHAN and MARK A .

CIAVARELLA , JR . did knowingl y , intentionally and wilful ly af fect ,

and at tempt to affect , inters tate commerce and the movement of

art icles and commodi ties in commerce by extortion, as those terms

are de f ined in Ti tle 1 8 , United States Code , 195 1 ; that i s , the

de f endant s M I CHAEL T . CONAHAN and MARK A. CIAVARELLA , JR .

obtained property from ano ther , name l y , three checks totaling

$2 0 0 , 0 0 0 , which were payable from a bank account of Vi s ion

Holdings , Inc . contro l led by PARTICI PANT # 1 , not due the

defendant s o r t heir o f f ice , with that other's consent , under

co lor of o f f icial right , in violat i on of Ti t l e 1 8 , Uni t ed States

Code , 1 9 5 1 .

1 6


i i . RACKETEERING ACT 5. 2 ( Bribery Chargeable Under State Law - Checks Total ing $20 0,0 0 0 )

4 2 . Between on or about February 1 5 , 2004 and on or about

February 24 , 20 0 4 , in the Middle D i s t rict of Pennsylvania, and

elsewhere, the def endants MICHAEL T . CONAHAN and MARK A .

CIAVARELLA, JR. did knowingly commit bribery, that i s , the

de fendants sol i c ited, accepted and agreed to accept f rom another,

namely PARTICIPANT #1, monetary bene f its, to wit, three checks

total ing $200,0 0 0, whi ch were payable from a bank account of

Vis ion Holdings, Inc . control led by PARTICIPANT #1, as

cons iderat ion f or violat ions of known legal dut ies of the

defendants as publ ic servants, in viol at ion of T i t l e 18, Pa . C . S .

4 70 1 ( a ) ( 3 ) .

f. Act S ix - Paid to Conahan and Ciavarel la on Or About

4 3 . In furthe rance of the offense, the de fendants MICHAEL

T. CONAHAN and MARK A. CIAVARELLA, JR . , commit ted the fol lowing

acts, any one o f whi ch alone const i tutes Racke teering Act S ix.

i. RACKETEERING ACT 6 . 1 ( Extortion Under Color of O f f icial Right - Checks Total ing $ 100, 0 0 0 )

4 4 . On or about Apr i l 3 0, 20 04, in the Middle D i s trict of

Pennsylvania, and e l sewhere, the defendants MICHAEL T. CONAHAN

and MARK A . CIAVARELLA , JR. did knowingly , intent iona l ly and

wi l fully affect, and a t tempt to a f f ec t , inters tate commerce and

the movement o f art i c l e s and commodities in commerce by

extort ion, as tho s e terms are de fined in T i t l e 18, United States

1 7


Code, 1951 ; that is, the de fendants MICHAEL T. CONAHAN and MARK

A . CIAVARELLA, JR . obt ained property f rom another, namely, two

checks totaling $ 10 0 ,0 0 0, which were payable f rom a bank account

of Vis ion Holdings, Inc . controlled by PARTICIPANT #1, not due

the defendants or the i r of f ice, wi th that other ' s consent, under

color of of f i c ial right, in violat ion of T i t l e 18, United States

Code, 1951 .

i i . RACKETEERING ACT 6. 2 ( Bribery Chargeabl e Under State Law - Checks Total ing $ 1 0 0,0 0 0 )

45 . On or about Apr i l 30, 20 04, in the Middle Di strict of

Pennsylvania, and e l s ewhere , the defendant s MICHAEL T. CONAHAN

and MARK A . CIAVARELLA , JR. did knowingly commit bribery, that

i s, the defendants s o l i c i t ed, accepted and agreed to accept from

another, namely PARTICIPANT #1, monetary bene f its, to wit, two

checks totaling $ 1 0 0 ,0 0 0, which were payable f rom a bank account

of Vis ion Holdings, Inc . controlled by PARTICI PANT #1, as

cons ideration for viol at ions of known legal dut ies of the

defendant s as public s e rvants, in violat i on of Title 18, Pa . C . S.

4 7 0 1 ( a ) ( 3 ) .

g . Ac t S even - Paid to Conahan and Ciavare lla on

4 6. In furtherance o f the o f fense, the de fendants MICHAEL

T. CONAHAN and MARK A . CIAVARELLA, JR. , commi tted the following

acts, any one o f which alone const itut e s Racketeering Act Seven.

i . RACKETEERING ACT 7.1 ( Extort ion Under Co lor of O f f icial Right - Wire Trans fer of $ 120,0 0 0 )

18


4 7 . On or about July 12, 2 0 0 4 , in the Middle District of

Pennsylvania, and elsewhere, the de fendants MICHAEL T . CONAHAN

and MARK A . CIAVARELLA, JR . did knowingly, intent ional ly and

wil ful ly af fect, and attempt to af fect, interstate commerce and

the movement of art icles and commodities in commerce by

extortion, as those terms are defined in T i t l e 1 8, United States

Code, 1 951 ; that is, the de fendants MICHAEL T . CONAHAN and MARK

A . CIAVARELLA, JR . obtained property from another, name ly, a wire

t rans fer of $120, 0 0 0 , which was t rans f erred from a bank account

of Vis ion Holdings, Inc . contro lled by PARTICIPANT #1, not due

the de f endants o r the ir o f f ic e , with that othe r's consent , unde r

color of of f ic ial right, in violation of T i t l e 1 8 , Uni ted States

Code, 1 951 .

i i . RACKETEERING ACT 7 . 2 (Bribery Chargeable Under State . Law - Wire Trans fer of $ 120,0 0 0 )

4 8 . On o r about July 1 2 , 2004 , in the Middle D i s trict of

Pennsylvania, and e l sewhere, the defendant s MICHAEL T . CONAHAN

and MARK A . CIAVARELLA, JR. did knowingly commi t bribery, that

is, the def endants sol i c i ted, accepted and agreed to accept from

another, namely PARTICIPANT #1, monetary bene f it s, to wi t, a wire

trans fer of $120, 0 0 0 , which was trans ferred f rom a bank account

of Vis ion Holdings , Inc . control led by PARTICIPANT #1, as

cons iderat ion for violations of known legal duties o f the

def endants as pub l i c s e rvants, in violat ion of T i t l e 1 8, Pa . C. S .

4 70 1 ( a ) ( 3 ) .

1 9


h. Ac t - Paid to Conahan and C i avare l l a on

4 9. In furtherance of the o f f ense, the de fendants MICHAEL

T . CONAHAN and MARK A . CIAVARELLA, JR . , committed the fol lowing

act s, any one of which alone const itutes Racketeering Act Eight .

i . RACKETEERING ACT 8 . 1 ( Extortion Under Color o f O f f icial Right - Wire Transfer o f $100,000 )

SO. On or about September 23 , 20 0 4 , in the Middle

District of Pennsylvania, and e l sewhere, the de fendants MICHAEL

T . CONAHAN and MARK A . CIAVARELLA, JR . did knowingly,

intent iona l ly and wil fully a f f ect, and attempt to a f f e c t,

int e rs t ate commerce and the movement o f artic l e s and commodit ie s

in commerce by extort ion, as those terms are def ined in Title 18,

Uni ted S tates C9de, J.95l ; that i s, the de fendants MICHAEL T .

CONAHAN and MARK A. CIAVARELLA, JR . obtained property f rom

another, namely, a wire trans f er of $100,000, which was

trans f erred f rom a bank account o f Vis ion Hol dings, Inc .

controlled by PARTICIPANT #1, not due the de fendants or their

o f f ice, with that other ' s consent, under color of o f f i c ial right,

in violation of T i t l e 18, Uni ted States Code, 1951 .

i i . RACKETEERING ACT 8 . 2 ( Bribery Chargeable Under State Law - Wire Trans fer of $ 100 , 000 )

51 . On or about September 23 , 2004 , in the Middle Dis trict

of Pennsylvania, and e l sewhere, the de fendant s MICHAEL T . CONAHAN

and MARK A . CIAVARELLA, JR. did knowingly commit bribery, that

is, the def endants s o l i c i t ed, accepted and agreed to acc ept from

20


another, namely PARTICIPANT #1, monetary bene f its, to wit, a wire

trans f er of $ 10 0,000, which was trans ferred f rom a bank account

of Vis ion Holdings , Inc . control led by PARTICIPANT #1, as

cons ideration for violat ions of known legal duti e s of the

de fendants as pub l i c servants, in violation of T i t l e 18, Pa . C. S .

470 1 ( a ) ( 3 ) .

i . Act Nine - Paid t o Conahan and Ciavare l l a on

52 . In furtherance of the o f f ense, the de fendants MICHAEL

T. CONAHAN and MARK A. CIAVARELLA, JR . , commi tted the fol lowing

acts, any one of whi ch alone cons t i tutes Racketeering Act Nine .

i . RACKETEERING ACT 9 . 1 ( Extortion Under Color of Of f icial Right - Cash Payment of $ 4 2,0 0 0 )

53 . On or about August 1 6 , 20 0 6, in the Middle Dis trict

of Pennsylvania, and e l sewhere, the de fendant s MICHAEL T . CONAHAN

and MARK A. CIAVARELLA, JR. did knowingly, intentiona l ly and

wi l ful ly af fect, and attempt t o a f fect, interstate commerce and

the movement of art i c l e s and commodities in commerce by

extortion, as those terms are def ined in Title 1 8 , United States

Code, 1 951 ; that i s, the de f endant s MICHAEL T . CONAHAN and MARK

A. CIAVARELLA, JR . obtained prope rty from another, name ly, cash

in the amount of $42,0 0 0, whi ch was trans ferred f rom PARTICIPANT

#1, not due the de f endants or the i r o f f i c e, with that other ' s

consent, under color of o f f ic ial right, in violat ion o f T i t le 18,

Uni ted S tates Code, 1 951 .

21


i i . RACKETEERING ACT 9 . 2 (Bribery Chargeable Under State Law - Cas h Payment of $42,000)

54. On or about Augus t 1 6, 2006, in the Middle District of

Pennsylvania , and e l s ewhere, the defendants MICHAEL T. CONAHAN

and'MARK A . CIAVARELLA, JR. did knowingly commit bribery, that

is, the de fendants sol i cited, accepted and agreed to accept from

anothe r , name ly PARTICIPANT #1, monetary bene f it s , to wit, cash

in the amount of $42,000, which was trans f erred by PARTICIPANT

#1, as cons ideration for violations of known l ega l duties of the

def endants as pub l i c servants, in violation o f Ti t l e 18, Pa. C. S .

4701 ( a ) ( 3 ) .

j. Act Ten - Pai d To Conahan And Ciavare l l a on November

55 . I:n furtheranc:e of the offense I the de fendants MICHAEL

T . CONAHAN and MARK A. CIAVARELLA, JR . , commit ted the fol lowing

acts, any one o f which alone constitute s Racketeering Act Ten .

i. RACKETEERING ACT 10 . 1 ( Extortion Under Color of O f f i c ial Right - Cash Payment of $20,000)

56. On or about November 1, 2006, in the Middle District

of Pennsylvania, and e l sewhere, the de fendant s MI CHAEL T . CONAHAN

and MARK A. CIAVARELLA, JR. did knowingly , int ent ional ly and

wil fully af f e c t, and attempt to affect, interstate commerce and

the movement o f arti c l e s and commodit i e s in c ommerce by

extortion, as tho s e terms are def ined in T i t l e 1 8 , Uni ted States

Code, 1 951 ; that i s, the def endants MICHAEL T. CONAHAN and MARK

A. CIAVARELLA, JR . obtained property from anothe r, namely, cash

22


in the amount o f $20, 000 , which was t rans ferred f rom PARTICIPANT

#1, not due the de f endants or their o f fice, with that other ' s

consent, under color o f o f f icial right, in violat ion of Title 18,

United Stat e s Code, 1951 .

i i . RACKETEERING ACT 10. 2 ( Bribery Chargeabl e Under State Law - Cash Payment of $20, 000 )

57 . On or about November 1, 2006, in the Middle District of

Pennsylvania, and e l sewhere, the de fendants MICHAEL T. CONAHAN

and MARK A . CIAVARELLA, JR . did knowingly commit bribery, that

is, the defendants s o l i c i ted, accepted and agreed to accept f rom

another, namely PARTICIPANT #1, monetary bene f i t s , to wit, cash

in the amount of $20, 000, which was t rans f erred by PARTICIPANT

#1, as cons iderat ion for violations o f known legal dut ies of the

de fendants as publ i c serVants, in violat ion of Title 18, Pa . C . S .

4701 ( a} ( 3 ) .

k. Act Eleven - Paid to Conahan and C i avare l l a on November

58. In furtherance of the o f f ense, the defendants MICHAEL

T . CONAHAN and MARK A . CIAVARELLA, JR . , committed the following

ac ts, any one of whi ch alone cons t i tutes Racketeering Act Eleven .

i . RACKETEERING ACT 11 . 1 ( Extort ion Unde r Color of O f f i c ial Right - Cash Payment of $50 , 000 )

59. On or about November 20, 2 0 0 6 , in the Middle D i s trict

of Pennsylvania, and e l s ewhere, the de fendants MI CHAEL T. CONAHAN

and MARK A . CIAVARELLA, JR . did knowingly, intent ional ly and

wi lfully af f e c t, and attempt to af fect, interstate commerce and

23


the movement of art i c l e s and commodi t i e s in comme rce by

extort ion, as those terms are de f ined in Title 1 8 , United S tates

Code, 1 951 ; that is, the def endants MICHAEL T . CONAHAN and MARK

A . CIAVARELLA, JR . obtained property f rom another, name ly, cash

in the amount of $50, 0 0 0, which was trans ferred f rom PARTICIPANT

#1, not due the def endants or the i r off i ce, wi th that other ' s

consent, under color of offi c i a l right, in violat ion o f Title 1 8,

United States Code, 1 951 .

i i . RACKETEERING ACT 1 1 . 2 ( Bribery Chargeabl e Under S tate Law - Cash Payment of $50, 0 0 0 )

60. On or about November 20 , 200 6 , in the Middle District

of Pennsylvania, and e l sewhere, the def endants MICHAEL T . CONAHAN


is, the de fendants sol i c ited , accepted and agreed to acc ept from

another, namely PARTICIPANT #1, monetary bene f its, to wi t, cash

in the amount of $50 , 0 0 0 0, whi ch was t rans ferred by PARTICIPANT

#1, as cons ideration for violat ions of known legal duti e s of the

de fendants as public servants, in violation o f T i t l e 1 8 , Pa . C . S .

4 7 0 1 ( a ) ( 3 ) .

1. Act Twe lve - Paid to Conahan and Ciavare l la on December

6 1. In furtherance of the offense, the de fendants MICHAEL

T . CONAHAN and MARK A . CIAVARELLA, JR . , committed the fol lowing

ac ts, any one o f which alone c ons t i tutes Racketeering Act Twelve .

i . RACKETEERING ACT 12 . 1 ( Extort ion Under Color o f Off i c ial Right - Cas h Payment of $ 3 1 , 50 0 )

24


6 2 . On or about December 18, 20 0 6 , in the Middle District

of Pennsylvania, and e l s ewhere, the defendants MI CHAEL T . CONAHAN

and MARK A . CIAVARELLA, JR . did knowingly , intent iona l ly and

wi l fully af f e c t, and attempt to affect, interstate c ommerce and

the movement of art icles and c ommodities in commerce by

extort ion, as those terms are def ined in T i t l e 1 8, Uni ted States

Code, 1 951 ; that is, the de f endants MICHAEL T . CONAHAN and MARK

A . CIAVARELLA, JR . obtained property f rom another, name ly, cash

in the amount of $3 1,500, which was trans f erred f rom PARTICIPANT

#1, not due the de f endants or the i r o f f ic e, with that other ' s

consent, under color of of f i c ial right, in violat ion of Title 18,

United States Code , 1 951 .

i i . RACKETEERING ACT 12 . 2 ( Bribery Chargeable Under State Law - Cash Payment of $3 1,500 )

6 3 . on or about December 18, 2006, in the Middl e D istrict

of Pennsylvania, and elsewhere, the def endant s MICHAEL T . CONAHAN


i s, the de f endants solicited, acc epted and agreed to accept f rom

another, namely PARTICIPANT #1, monetary bene f it s , to wit, c ash

in the amount of $3 1,500, whi ch was trans ferred by PARTICIPANT

#1, as cons ideration for violat ions of known legal dut ie s of the

defendants as pub l i c servants, in violat ion o f T i t l e 1 8, Pa . C . S .

4 7 0 1 ( a ) ( 3 ) .

6 4 . From in or about December, 200 1 to on o r about the date

25


of this Indic tment, in the Middle Dist rict of Pennsylvania , and

e l s ewhere, the def endant s MICHAEL T. CONAHAN and MARK A.

CIAVARELLA , JR . did knowingly, intentional ly and wil fully

combine , conspire, confederate and agree together with one

another , and toget her with other persons both known and unknown

to the grand j ury , to commit the following of f ense agains t the

United States , namely, to knowingly conduct and attempt to

conduct a f inanc ial t ransact ion af fect ing interstate commerce

which involved the proceeds of a spe c i f ied unlawful act ivity ,

knowing that the t ransac tion was des igned in whole and in part to

conceal and disguise the nature, locat ion , source, ownership and

control of the proceeds of said spec if ied unlawful act ivity and

that while conduct ing and attempting to conduct such f inancial

transact ion knew that the property involved in the f inanc ial

transaction repres ented the proceeds o f some form of unlawful

ac t ivity, in violat ion of Title 18, United S tates Code ,

1956 ( h ) .

Al l in violat ion o f Title 18, United States Code , 2 and

1962 ( c ) .

26


Count 2

18 u.s.c. 1 9 6 2 ( d) ( Racketeering Conspiracy)

THE GRAND JURY FURTHER CHARGES :

6 5 . The al legations contained i n Count 1 o f this

Indictment are hereby re-al leged and incorporated by reference as

i f ful ly set forth herein .

6 6 . From on or about December , 2 0 0 1 , the exact date be ing

unknown , to on or about the date of thi s Indictment , in the

Middle District of Pennsylvania , and elsewhere , the defendants ,

MICHAEL T . CONAHAN and MARK A . CIAVARELLA , JR . ,

together wi th other persons known and unknown to the grand j ury ,

be ing persons employed by and as soc iated with an Enterprise ,

which Enterpri se engaged in , and the ac tivities of which

af fected, inters tate and foreign commerce , did knowingly and

intentiona l ly combine , conspire , confederate and agree to violate

18 U . S. C . 1 9 6 2 ( c) , that i s , to conduc t and part ic ipate ,

directly and indi rectly, in the conduct of the af fairs of the

Enterprise through a pattern o f racketeering ac t ivity , that i s ,

through the commi s s ion o f the racketeering acts spe c i f ied in

Count 1 of thi s Indic tment , among others .

6 7 . As part of the conspiracy , the defendants MICHAEL T .

CONAHAN and MARK A. CIAVARELLA , JR . did agree that they and the ir

coconspirators would commit at least two acts of racketeering

2 7


act ivi ty whi ch amounted to a pattern o f racketeering act ivity in

the conduct of the af fairs of the Enterpri se .

All i n violation of Title 18, Uni ted States Code , 1 9 6 2 ( d ) .

2 8


Counts 3- 6

1 8 U . S. C . 134 3, 134 6 and 2 ) ( Honest Services Wire Fraud )


6 8. The al legat ions contained in Counts 1 and 2 of this

Indictment are hereby re - al leged and incorporated by reference as

if ful ly s e t forth herein .

6 9. From in or about June, 20 0 0, the exac t date being

unknown to the grand j ury, to on or about the date of the f iling

of this Indictment, in the Middle District of Pennsylvania, and

elsewhere, the de fendants,

MICHAEL T . CONAHAN and MARK A. CIAVARELLA, JR. ,

each aiding and abe_t t ing the other and each aided and abetted by _

the other and by other persons known and unknown, devised and

intended to devise a material scheme and artif ice to de fraud the

c itizens of Luz erne County, the citizens of the Commonwealth of

Pennsylvania and the Judiciary of the Commonwealth o f

Pennsylvania and t o deprive those citiz ens and the j udiciary of

their right to the honest services of MICHAEL T . CONAHAN and MARK

A. CIAVARELLA, JR . as j udge s o f the Court of Common P leas for

Luzerne County, performed f ree from deceit, f avorit ism, bias,

s e l f - enrichment, se l f - dealing, concealment, and conf l ict of

interest .

29


THE RIGHT TO HONEST SERVI CES

7 0 . At a l l times material to this Indictment , the

defendants MI CHAEL T . CONAHAN and MARK A . CIAVARELLA , JR . were

elected judges of the Court of Common Pleas for Luzerne County ,

Pennsylvania and as such were pub l i c of f i c i al s . The defendants

MI CHAEL T . CONAHAN and MARK A . CIAVARELLA , JR . owed a fi duc iary

duty to the public and to the Judi c i ary of the Commonwealth of

Pennsylvania not to real ize personal f inanc ial gain through their

of fi ce other than compensation provided by law, to refrain from

conduct that constitutes a conflict of interest or that

consti tutes seeking or accepting improper influenc e , to recuse

themselves from matters in whi ch they have a c onf l i ct of

interes t , and to fil e a truthful and comp lete annual statement of

financ ial interests , reporting the sourc es of a l l income , di rect

or indirect .

7 1 . Part of the f i duc iary duty owed by the defendants aros e

from constitutional law , inc luding , Arti c l e 5 , 1 7 ( b ) and 17 ( c )

of the Pennsylvania Constitution.

7 2. Part of the f i duciary duty owed by the def endants ,

independent of cons titutional or statutory law, arose from the

def endants ' pos itions as judges of the Court of Common P leas ,

inc luding requirements of the Pennsylvania Code of Judi c ial

Conduct and Admini strative Orders of the Penns ylvania Supreme

Court regarding matters related to Judges of the Court of Common

30


Pleas . Among other t hings , the fiduciary duty owed by the

de fendants inc luded the duty aris ing from their positions as

judges to dis c lose material information af fec ting their ability

to engage in impartial decis ion-making.

MEANS AND METHODS OF THE DEFENDANTS

7 3 . I t was a part of the s cheme and artific e to de fraud

that the de fendants agreed together, and with othe rs known and

unknown to the Grand Jury , to engage in the course of conduct

alleged in the "MANER , MEANS AND METHODS OF THE DE FENDANTS1'

sec tion of Count 1 of this Indic tment. Thos e alle gations are

hereby re-a11eged and incorporated by re ference as if ful ly set

forth herein . As further de scribed herein , the de fendant s

_ _

gfrauded the citizens o f :f.t1zerne County , the c:i.tizens of the

Commonwe alth of Pennsylvania and the Judiciary of the

Commonwea l th of Pennsylvania and deprived those citizens and the

Judiciary of their right to the hone s t service s of the de fendants

by: ( 1 ) engaging in undisc losed biased decis ion-making for

pers onal gain; and , ( 2 ) knowingly soliciting , extorting and

accepting bribes as part of a generalized agreement

to improperly exert inf luence on behalf of the bribe payer as

specific opportunitie s aros e to do so.

7 4 . I t was further a part of the scheme and artifice to

de fraud that the de f endants MI CHAEL T. CONAHAN and MARK A .

CIAVARELLA , JR . knowingly and intentiona l l y filed materially

31


false annual statements of f inancial interes t s wi th the

Admini strat ive O f f i c e of the Pennsylvania Courts in which they

failed to disclose the source of income they rece ived and in

which they fai led t o disc lose the i r f inanc ial relat ionship with

PARTICIPANT #1, PARTICIPANT #2, PA Chi ld Care and We stern PA

Chi ld Care, which were material matters .

75 . It was further a part o f the scheme and art i f ice to

de fraud that the def endants MI CHAEL T . CONAHAN and MARK A .

CIAVARELLA, JR . , act ing on behalf of the Court of Common Pleas

for Luzerne County in matters in which they had discret ionary

dec is ion-making authority, knowingly and intent ionally issued

wri tten, oral and wire communi cat i ons whi ch were materially false

to the extent that the def endant s did not di s c lose the i r conflict - - ..

of interest and the ir f inancial relationship with PARTICIPANT #1,

PARTICIPANT #2, PA Child Care and We stern PA Chi ld Care , which

were material mat ters.

76 . I t was further a part of the scheme and art i f ice to

de fraud that the defendant s MICHAEL T . CONAHAN and MARK A.

CIAVARELLA, JR . , ac t ing on behalf of the Court of Common Pleas

for Luzerne County in matters in which they had discretionary

dec i s ion-making aut hority , knowingly and intent ionally i ssued

reports and statements to the Administrat ive O f f ice of the

Pennsylvania Courts which were material ly fal s e to the extent

that the de fendants did not d i s c lose the i r conf l i c t of interest

32


and their financ ial re lationship with PARTI C IPANT #1 PARTICIPANT

#2, PA Child Care and Weste rn PA Child Care, which were material

matters.

7 7 . I t was further a part of the scheme and art i fice to

de f raud that the def endant MICHAEL T. CONAHAN ente red into

agreements guaranteeing placement of j uvenile o f fenders with PA

Child Care and Wes tern PA Child Care and took o f f icial action to

remove funding from the Luz e rne County Court budge t for the

Luz e rne County j uveni le detention faci lity . The practical ef fect

of thi s action was to c lose the Luzerne County youth detention

center . The de fendants MICHAEL T . CONAHAN and MARK A .

CIAVARELLA, JR . , through their actions , facilitated the

construction of j uveni l e qet ent ion fac i l i t ies and an expan._sion to

one of those faci lities by PA Chil d Care and We s tern PA Chi ld

Care and di rec t ed that j uvenile offenders be lodged at j uvenile

det ent ion fac i l it i e s ope rated by PA Child Care and Wes t e rn PA

Child Care . Through their actions , the de fendant s as sis ted Pa

Child Care and Wes tern PA Child Care to secure agreements with

Luz e rne County worth tens o f mil l ions of dol lars for the

placement of j uvenile o f fenders, inc luding an agreement in l ate

2004 worth approximately $58,000,000. I t was further a part of

the scheme and artifice to def raud that, on a number of

occas ions, accused j uvenil e o f f enders were ordered detained by

the de fendant MARK A . CIAVARELLA, JR . even when Juveni l e

33


Probation Officers did no t rec ommend detention and even when

de tention was unreas onable and unwarranted under the

circumstances . The defendant MARK A. CIAVARELLA, JR., and others

ope rating at his behe s t, also exerted pres sure on staff of the

Court of Common P leas to recommend de tention of juvenile

offenders. On some occasions , probation of f icers we re pre s sured

to change re commendat ions of release to rec ommendations of

de tention. In his capacity as Pre sident Judge , the defendant

MICHAEL T. CONAHAN took actions rel ating to proceedings invo lving

juveni le offende rs who were sent to PA Child Care and Wes tern PA

Child Care facili tie s . The f oregoing actions , as we l l as othe r

ac tions , of t he de f endants MI CHAEL T. CONAHAN and MARK A.

CJAVARELI. JR. re lated to matters in which they had

dis c re tionary dec is ion-making authority . The defendant s MICHAEL

T. CONAHAN and MARK A. CIAVARELLA , JR . took the se actions , and

other ac tions , wi thout recus ing themselves f rom mat ters in whi ch

they had a conflict of intere s t and without di sclo sing to parties

invo lved in c ourt proceedings , and to the Adminis trat ive Office

of the Pennsylvania Courts , their conflic t of intere s t and the

financ ial relations hip that exis ted between the defendant s and

PARTICI PANT #1, PARTICI PANT # 2 , PA Child Care and Wes t e rn PA

Child Care , which were mate rial mat ters .

7 8 . It was further a part of the s cheme and artific e to

de f raud that the de fendants MI CHAEL T. CONAHAN and MARK A.

34


CIAVARELLA , JR . violated the ir dut ies o f independence,

impartial ity and integrity in the exercise of the ir dis cretionary

actions on behal f of the Court of Common Pleas for Luzerne County

by failing to recuse themse lve s from acting in matters in which

they had a material conf l i c t of intere s t and in fail ing to

di sclose to parti e s appearing before the court and to the

Admini strat ive O f f ice of the Pennsylvania Courts their conf lict

of interest and the ir f inanc ial relat ionship with PARTICIPANT #1,

PARTICIPANT #2, PA Chi ld Care and We s tern PA Child Care, which

were material matters .

7 9 . I t was further a part of the scheme and art i f ice to

de fraud that the de fendant MARK A . CIAVARELLA, JR . adopted

procedures in_ j uvenile court w:g._ich resulted in j uveniles

appearing without counsel and without creat ion o f a normal court

record . The adopt ion of these procedures was accomp l ished

through the di s cret ionary dec i s ion-making authority of the

de fendant MARK A . CIAVARELLA, JR . The adoption of these

procedures resulted in violation of the cons t i tut ional right to

counsel afforded j uveni le o f fenders and created the potential for

an increased number of j uveni le of fenders to be sent to the

j uveni le detention facilit ies of PA Chi ld Care and Western PA

Chi ld Care . The de fendant MARK A . CIAVARELLA, JR . took these

actions without di s c lo s ing to the part ies before the court and to

the Admini s trative O f f ice o f the Courts his conf l i c t of intere s t

35


and the f inanc ial relat ionship that exi s te d between the de fendant

MARK A . CIAVARELLA, JR. and PARTICIPANT #1 , PARTICIPANT #2 , PA

Chi ld Care and Weste rn PA Child Care , whi ch were material

mat ters.

8 0 . I t was further a part o f the scheme and arti f ice to

de fraud that the def endants MICHAEL T . CONAHAN and MARK A .

CIAVARELLA , JR . otherwise conducted the af fairs of the Court of

Common Pleas , in matters in whi ch they had discret ionary

dec i s ion-making authority, without disc los ing their confl ict of

interest and financ ial relationship with PARTICIPANT #1 ,

PARTICIPANT #2 , PA Chi ld Care and Wes tern PA Chi ld Care, knowing

that these were material matters that should have been disclosed

to part ies appearing be fore the court, to _ the Adminis trative __

Off ice of Courts and to other persons and ent i t i e s .

8 1 . I t was further a part o f the scheme and art i f i c e to

de f raud that the de fendants knowingly sol i c i ted, extorted and

accepted gyig QYQ bribes as part o f a genera l i zed agreement

to improperly exert inf luence on beha l f of PARTICI PANT #1, PA

Chi ld Care and Wes tern PA Child Care as spec i f i c opportunit ies

arose to do so . For instance, as part of the scheme and art i f i c e

t o def raud, the def endant MICHAEL T. CONAHAN summari ly granted a

mot ion to s eal the record and for inj unc t ive rel i e f in a c ivil

cas e related to PA Chi ld Care .

3 6


EXECUTION OF THE SCHEME

8 2 . On or about the date of each count l i sted below, in the

Middle D istrict of Pennsylvania and elsewhere, the de f endants

MICHAEL T . CONAHAN and MARK A . CIAVARELLA , JR . , each aiding and

abet ting the other and each aided and abet ted by the other and by

other persons known and unknown, for the purpose of executing the

above - de scribed material s cheme and art i f i c e to def raud and

deprive the c i t i z ens of Luzerne County, the c i t i z ens of the

Commonwealth o f Pennsylvania and the Judic iary of the

Commonwealth of Pennsylvania of their right to the hones t

serv i c e s o f the de f endants MI CHAEL T . CONAHAN and MARK A .

CIAVARELLA, JR . , t ransmitted and caused to be t ransmitted by

means of wire communication _ in JntE::r:-state commerce, the folJ_qwing

writ ings , s ignals and sounds :

Count

3 July 12, 20 0 4

4 S eptember 23, 20 04

5 July 1 5 , 20 0 5

37

Wire Transm i s s ion

Electronic funds trans fer of $ 120, 0 0 0 trans ferred f rom an account of Vis ion Holdings, Inc . to an account of the Pinnac l e Group o f Jupiter, LLC .

Electronic funds t ransfer of $ 1 0 0, 0 0 0 trans ferred from an account of Vis ion Holdings, Inc .

Electronic funds t rans fer of $ 1, 0 0 0, 0 00 t rans f e rred from an account o f Mer i c le Cons truct ion, Inc . to an account of Pinnacl e Group of Jupiter, LLC .


Count

6

1 34 6 .

February 3, 2006

Wire Transmi s s ion

Electronic funds trans fer of $ 1 5 0, 000 t rans ferred from an account of Meric le Construct ion , Inc. to an account o f Pinnac le Group of Jupiter , LLC.

In vio lation o f Tit le 1 8 , Uni ted States Code , 2, 134 3 and

38


Counts 7 - 10

1 8 U . S . C. 134 1 , 134 6 and 2 ) ( Hone s t Services Mail Fraud )


8 3 . The al legat ions contained in Counts 1 through 6 of this

Indictment are hereby re - al leged and incorporated by reference as

if f ul ly set forth here in .

8 4 . From in or about January, 2001, the exact date be ing

unknown to the grand j ury, to on or about the date of the f i l ing

of this Indictment, in the Middle D i s tric t of Pennsylvania, and

elsewhere, the de fendant ,

MICHAEL T . CONAHAN,

_devised and intended to devise a material scheme and arti f ie to

de fraud the c i t i zens of Luzerne County, the c i t i zens of the

Commonwealth of Pennsylvania and the Judic iary of the

Commonwealth of Pennsylvania and to deprive those c i t i zens and

the Judic i ary o f the i r right to the hone s t services of MICHAEL T .

CONAHAN as a j udge o f the Court of Common Pleas for Luzerne

County, per formed free f rom dec e i t, favori t i sm, bias, se l f -

enrichment, se l f - deal ing, concealment and con f l i c t s of interes t.


85 . On or about the date of each count l i s ted be low, in the

Middle District of Pennsylvania and e l s ewhere, the def endant

MICHAEL T . CONAHAN, for the purpose o f execut ing the above -

39


de scribed material scheme and arti fice to defraud and deprive the

citi zens of Luzerne County , the citizens of the Commonwealth of

Pennsylvania and the Judi c iary of the Commonwealth of

Pennsylvania o f their right to the honest services of the

de fendant MI CHAEL T . CONAHAN , caused to be de l ivered by the

United State s Postal Service and by any private and commercial

inters tate carrier to the Administrat ive O f f ice of the

Pennsylvania Court s in Phi ladelphia , Pennsylvania , and thereafter

caused to be de l ivered by the Uni ted States Postal Service and by

any private and commerc ial interstate carrier to the Judicial

Conduc t Board o f Pennsylvani a i n Harri sburg , Midd l e D i s trict o f

Pennsylvania , the , fol lowing things :

Count Date

7 Apri l , 2 0 04

8 March , 2 0 0 5

9 March , 2 0 0 6

4 0

of _

Material ly fal s e annual statement of f inanc ial interes t s submitted to the Admini strative O f f ice of the Pennsylvania Courts

Materially fal s e annual statement of financ ial intere s t s submitted to the Administrat ive Office of the Pennsylvania Courts

Materi a l ly fal s e annual s tatement of financ ial intere s t s submi t ted to the Admini s trative O f f ice of the Pennsylvania Courts


Count

1 0

1 34 6 .

April, 20 0 7

Materially false annual statement o f f inanc ial interests submitted to the Adminis trat ive Of f ice of the Pennsylvania Courts

In violation of Title 1 8 , United States Code, 2, 134 1 and

4 1


Counts 11-14

1 8 U . S . C . 134 1 , 134 6 and 2) ( Hone s t Servic es Mail Fraud )


8 6 . The allegations contained in Counts 1 through 10 of

this Indic tment are hereby re - all eged and incorporated by

reference as i f fully set forth herein .

87 . From in or about January , 2 0 0 1 , the exa c t date being

unknown t o the grand j ury , to on or about the dat e of the f i l ing

of this Indic tment , in the Middle Dis tric t of Pennsylvania , and

e l s ewhere , the de f endant ,

MARK A . C IAVARELLA , JR. ,

devised and intended to devise a material scheme and artifice to

de fraud the citizens of Luzerne County , the citizens of the

Commonwealth of Pennsylvania and the Judiciary of the

Commonwealth o f Pennsylvania and to deprive those citizens and

the Judiciary of their right t o the hone st servic e s o f MARK A .

CIAVARELLA , JR. , as a judge o f the Court of Common Pleas for

Luzerne County , performed fre e from de ceit , favoritism , bias ,

s e l f-enrichment , s e l f-dealing , concealment and conf lic t s of

interest.


88 . On or about the dat e of each count lis t e d be low, in the

Middle Dis tric t of Pennsylvania and el sewhere , the de f endant MARK

A . CIAVARELLA , JR . , f or the purpose of exe cuting t he above -

4 2


described material scheme and art i f i ce to de f raud and deprive the

c i t i z ens of Luz e rne County, the c i t i z ens o f the Commonwealth of

Pennsylvania and the Judiciary of the Commonwealth of

Pennsylvania of thei r r i ght to the honest s e rvices of the

de fendant MARK A . CIAVARELLA, JR . , caused to be del ivered by the

United States Postal S e rvice and by any private and commerc ial

interstate carrier to the Adminis t rat ive O f f ice of the

Pennsylvania Court s in Phi lade lphia County, Eastern Di strict of

Pennsylvania, and thereafter cause d to be de l ivered by the Uni ted

States Pos tal S ervice and by any private and commercial

interstate carr i e r to the Judi c i al Conduc t Board o f Pennsylvania

in Harrisburg, Middle D i s t rict of Pennsylvania, the fol lowing

tJ:l,ings : Count

1 1 Apr i l , 2 0 0 4

1 2 March, 2 0 0 5

13 April, 2 0 0 6

4 3

Materia l ly fal se annual statement of f inanc ial interes t s submitted to the Admini s t rat ive O f f ice of the Pennsylvania Courts

Materially fal se annual statement of f inanc ial intere s t s submitted to the Admini s trative Of f ice of the Pennsylvania Courts

Materi a l ly fal s e annual statement of f inanc ial intere s t s submitted to the Admini s t rative O f f ice of the Pennsylvania Courts


Count

14

1 34 6 .

March, 200 7

Materially false annual statement of f inancial interests submitted to the Admini s trative O f f ice of the Pennsylvania Courts

In violat ion of T i t le 18, United States Code, 2 , 1 34 1 and

4 4


Counts 1 5 - 24

1 8 u . s . c . 6 6 6 ( a ) ( 1 ) ( B ) ( Corrupt Rec e ipt of Bribe /Reward for O f f i cial Action

Concerning Programs Rece iving Federal Funds )


89 . The allegat i ons contained in Count s 1 through 1 4 of

thi s Indictment are hereby re - al leged and incorporated by

re ference as i f ful ly set forth herein.

9 0. As e lected j udges of the Court of Common Pleas for

Luzerne County the def endant s were agent s of a number of

government entitie s , i nc luding , but not l imi ted to, the

Admini s t rat ive O f f i c e o f the Pennsylvania Court s , a government

agency of the Commonwealth of Pennsylvania that employed the

de f _a_s _ j udgef:) .

9 1 . The Commonwealth of Pennsylvania , Luz e rne County and

the Court of Common Pleas for Luzerne County each received

federal as s i s tance in excess of $10, 0 0 0 dur ing each one - year

period beginning on January 1, 20 02 and extending through

December 31, 20 0 7 .

92. Between on o r about January 1, 20 0 2 and on or about

January 1, 20 0 7, in the Middl e D i s trict of Pennsylvania , and

e l sewhere, the de fendants,

MICHAEL T. CONAHAN and MARK A . CIAVARELLA , JR . ,

each aiding and abet t ing the other and each aided and abetted by

the other and by othe r persons known and unknown , did knowingly,

4 5

PatRectangle

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intent i onal ly and corruptly sol i c it and demand for their own

bene f i t , and did accept , and agree to accept , f rom another

person , mul t iple monetary payment s in amounts of more than

$ 5 , 0 0 0 , intending to be inf luenced and rewarded in connection

with the bus ine s s o f the government entities they represented as

j udges of the Court of Common P l eas for Luz erne County . In

particular , payments were made to and accepted by the defendants

in connection with o f f icial actions taken and intended to taken

by the de fendants to fac i l i tate the planning , c onstruction and

operat ion of j uvenile detent ion fac i l i ties owned , c ons tructed and

opera t e d by PA Chi l d Care and We s t ern PA Chi l d Care.

Each of the following mone tary payment s , which occurred on

or at t:_e_ dates indicated , a sprt_e _


Amount and Type o f Count Date From

Mericle 19 7 - 15 - 20 0 5 Construct ion , Inc . $ 1 , 0 0 0 , 0 0 0 Wire Transfer

Mericle 20 2- 3 - 20 0 6 Construction , Inc . $ 1 5 0 , 0 0 0 Wire Trans fer

21 8- 1 6 - 0 6 Robert Powe l l $ 4 2 , 0 0 0 Cash

22 1 1 - 1 - 0 6 Robert Powel l $ 20,0 0 0 Cash

23 1 1 - 20 - 0 6 Robert Powe ll $ 5 0 , 0 0 0 Cash

24 12- 1 8- 0 6 Robert Powe l l $ 31 , 5 0 0 Cash

In violat ion of T i t le 1 8 , Uni ted States Code , 2 and

6 6 6 ( a ) ( 1 ) ( B ) .

4 7

PatLine

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Count 2 5

1 8 u . s . c . 1 9 5 6 ( h ) ( Money Laundering Consp i racy )


9 3 . The al legat ions contained in Count s 1 through 2 4 of

thi s Indi ctment are hereby re - al leged and incorporated by

ref erence as i f ful ly set forth herein .

9 4 . From on or about January 1, 2 0 0 1 , and cont inuing up to

on or about the date o f thi s Indictment, in the Middle Dis trict

of Pennsylvania and e l sewhere, the def endants,

MI CHAEL T . CONAHAN and MARK A . CIAVARELLA , JR . ,

together wi th others known and unknown to the Grand Jury, did

knowingly, intent i onally and wi lfully combine, onspire,

conf ederate and agree with one another and with other persons

known and unknown to the grand j ury to commi t certain of fens es

agains t the United States as fol lows :

a . Knowing that the property involved in a f inanc ial transact ion repre s ent ed the proceeds o f some form of unlawful act ivi ty, conduc ted and attempted to conduct a f inanc ial trans act ion which in fact i nvolved the proceeds of the spe c i f ied unlawful ac t ivity knowing that the transact ion was des igned in whole and in part to conceal and di sgui se the nature, the location, the source, the ownership and the c ontro l of the proceeds of a spe c i f ied unlawful ac t ivity in v iolat ion of 1 8 u . s . c . 1 9 5 6 ( a ) ( 1 ) ( B ) ( i ) ; and,

b . To knowingly engage and attempt to engage in one or more mone tary transact ion ( s ) in criminally derived property that was o f a value greater than $ 1 0 , 0 0 0 and which was derived f rom spec i f ied unlawful activity, name ly, wire f raud and extort i on , in violation of 1 8

4 8


u . s . c . 1 9 5 7 .

In violat ion of Title 1 8 , United States Code , 1 9 5 6 ( h ) .

4 9


Count 2 6

1 8 U . S . C . 1 9 5 6 ( a ) ( 1 ) ( B ) ( i ) ( Money Laundering )


9 5 . The Grand Jury he reby incorporates by re f erenc e , as

though ful ly set forth here in , each of the allegat ions contained

in Counts 1 through 2 5 of thi s Indictment .

9 6 . On or about January 2 0 , 2 0 0 4 , in the Middle Dist rict of

Pennsylvania , and e l s ewhere , the de f endant s ,


each aiding and abe t t ing the other and each a i ded and abetted by

the other and by other persons known and unknown , did knowingly

and intent ionally conduc t , attempt to conduct and did caus e to be

conduc ted a f inanc ial transac t ion aff ect ing interstate commerce ,

to wit , the deposit i ng of the following two checks :

a . Check number 1 0 1 in the amount of $ 1 8 , 0 0 0 , ident i f i ed on the face o f the check as " Rent Prepay , " and

b . Check number 1 0 0 2 in the amount of $ 5 2 , 0 0 0 , ident i f ied on the face of the check as "Rent /Marine Prepay , "

i s sued to the Pinnac le Group o f Jupiter , LLC , whi ch i nvolved the

proceeds o f a spec i f i ed unlawf ul act ivity , that is , extortion

under color of o f f i c ial right , in violat ion of 1 8 u . s . c . 1 9 5 1 ,

knowing that the transac t i ons we re de s igned in who le and in part

to concea l and disguise the nature , locat ion , sourc e , owne rship

and contro l of the proceeds of said spec i f i ed unl awful ac tivity

5 0


and that whi le conduct ing and attempting to conduct such

financ ial trans actions knew that the property involved in the

financ ial transact i ons , that i s , funds in the amount of $7 0,0 0 0 ,

represented the proceeds of some form of unlawful act ivity .

In violat i on o f Title 1 8 , Uni ted S tates Code,

1 9 5 6 ( a ) ( 1 ) ( B ) ( i ) and 2 .

5 1


Count 2 7

1 8 U . S . C . 1 9 5 6 ( a ) ( 1 ) ( B ) ( i ) ( Money Laundering )


97 . The Grand Jury hereby incorporates by reference , as

though ful ly set forth herein , each of the a l l egat i ons contained

in Counts 1 through 2 6 of this Indictment .

98 . On or about February 24 , 2 0 04 , in the Middle Dis trict

of Pennsylvania and e l s ewhere , the defendants ,


each aiding and abetting the other and each aided and abetted by


conduc t , attempt to conduct and did caus e to be conduc ted a

financ ial transact ion af fect ing interstate commerce , to wit , the

depos i t ing of the following three checks :

1 . Check number 1 6 1 in the amount of $ 7 8 , 0 0 0 , identi f ied on the face o f the che ck as "Res erving Lease , "

2 . Check number 1 6 2 in the amount of $ 7 5 , 0 0 0 , ident i f ied on the face of the check as " Rental Feb -Mar Apri l , " and

3 . Check number 1 6 3 in the amount of $ 4 7 , 0 0 0 , identi f ied on the face of the check as " S l ip Rental / Fee s Jan- Feb-March & Apri l , "

issued to the Pinnac le Group o f Jup i ter , LLC whi c h involved the

proceeds of a spec i f ied unlawful act ivity , that i s , extort ion

under color o f o f f ic ial right , in violation o f 1 8 U . S . C . 1 9 5 1 ,

knowing that the transact ion was des igned in whol e and in part to

5 2


conceal and disguise the nature, l ocat ion , source, ownership and

control of the proceeds of said spec i f ied unlawful act ivity and

that whi le conduct ion and attempting to conduc t such f inanc ial

t ransact ion knew that the property involved in the f i nancial

transaction , that is funds in the amount of $20 0 , 0 0 0 represented

the proceeds of some form of unlawful ac t ivity.

In violat ion o f Title 1 8 , Uni ted States Code,

1 9 56 ( a ) ( 1 ) ( B ) ( i ) and 2 .

53


Count 2 8

1 8 U . S . C . 1 9 5 6 ( a) ( 1 ) ( B ) ( i ) ( Money Laundering)


9 9 . The Grand Jury hereby incorporates by reference , as

though ful ly set f orth herein , each of the a l legat ions contained

in Counts 1 through 2 7 of thi s Indic tment .

1 0 0 . On or about May 3 , 2 0 0 4 , in the Middle District of

Pennsylvania and e l s ewhere , the defendants ,




conduct , attempt to conduct and did cause to be conducted a

financial transac t ion affect ing interstate c ommerce , to wit , the

depositing o f the following two checks :

1 . Check number 1 7 6 in the amount of $ 7 5 , 0 0 0 , ident i f i ed on the face of the check as "Lease Expenses Apri l May June , " and

2 . Check number 1 7 7 in the amount of $ 2 5 , 0 0 0 , identi f ied on the face of the chec k as "Dock Expenses Related Apri l May June , "

is sued to the Pinnacle Group of Jupite r , LLC , which involved the

proceeds of a spe c i f ied unlawful act ivity , that is , extort ion in

violation of 18 U . S . C . 1 9 5 1 , knowing that the transaction was

de s igned in whole and in part to conceal and di sguise the nature ,

location , source , ownership and contro l of the proceeds of said

54


spe c i f ied unlawful act ivity and that whi l e conducting and

attempting to conduct such f inanc ial transaction knew that the

prop erty involved in the f inancial transact ion, that i s, funds in

the amount of $100 , 000 , repre sented the proceeds o f some form of

unlawful act ivity.

In violat ion of Title 1 8 , Uni ted States Code,

1 9 5 6 ( a ) ( 1 ) ( B ) ( i ) and 2 .

5 5


Count 29

18 u . s . c . 1 956 ( a ) ( 1 ) ( B ) ( i ) ( Money Launder ing )


101 . The Grand Jury hereby incorporates by reference, as

though fully set forth herein, each of the al legat ions contained

in Counts 1 through 28 of this Indictment .

102 . On o r about July 12, 2004, in the Middle District of

Pennsylvania and e l s ewhere, the defendants,

MICHAEL T . CONAHAN and MARK A. CIAVARELLA, JR . ,

each aiding and abet ting the other and each aided and abetted by

the other and by other persons known and unknown, did knowingly

conduct, attempt to conduct and did cause to be conducted a

f inancial t ransact ion affecting inters tate commerce, to wit, a

wire trans fer in the amount of $120,000 f rom an account of Vis ion

Holdings, Inc . , to an account of the Pinnacle Group of Jupiter,

LLC , which involved the proceeds o f a spe c i f ied unlawful

activi ty, that i s, honest services wire fraud, in violation of 1 8

U . S . C . 1 3 4 3 and 1 3 4 6, extortion under color of o f f icial right,

in violat ion of 18 U . S . C . 1 951, and bribery, in violat ion of 1 8

Pa . C . S . 4 701 ( a ) ( 3 ) , knowing that the transact i on was des igned

in whole and in part to conceal and disguis e the nature,

locat ion, sourc e, ownership and contro l of the proceeds of said

spec i f ied unlawful activity and that whi le conduc ting and

attempt ing to conduc t such f inancial t ransact ion knew that the

56


property involved in the f inanc ial transact ion, that is, funds in

the amount of $ 120,000, repres ented the proceeds of some form of

unlawful act ivity .

In violation o f Title 18, United States Code,

19 5 6 ( a ) ( 1 ) ( B ) ( i ) and 2 .

5 7


Count 3 0

1 8 u . s . c . 1 9 5 6 (a ) ( 1 ) ( B ) ( i ) ( Money Laundering)


1 0 3 . The Grand Jury hereby incorporates by re ferenc e , as

though fully set forth herein , each of the allegations contained

in Counts 1 through 2 9 of this Indictment .

1 04 . On or about September 23 , 2 0 0 4 , in the Middle District

of Pennsylvani a and e l s ewhere , the defendant s ,




conduc t , attempt to conduct and did caus e to be conducted a

f inanc ial transact ion affecting interstate commerce , to wit , a

wire t rans fer in the amount of $ 1 0 0 , 0 0 0 sent from an account of

Vis ion Holdings , Inc . to an account of the Pinnac le Group of

Jupiter LLC , which involved the proceeds o f a spec i f ied unlawful

activi ty , that i s , honest servi ces wire fraud , in violation of 1 8

U . S . C . 13 4 3 and 1 3 4 6 , extort ion under color of o f f icial right ,

in violation of 1 8 U . S . C . 1 9 5 1 , and bribery, in violation of 1 8

Pa . C . S . 4 7 0 1 ( a) ( 3 ) 1 knowing that the transact ion was de s igned

in whole and in part to conceal and disgui se the nature ,

location, source , ownership and control of the proceeds of said

spec i f ied unl awful activity and that whi le conduct ing and

attempting to conduct such f inanc ial transact ion knew that the

5 8


property involved in the financial transaction , that is , funds in

the amount of $ 10 0 , 0 0 0 , represented the pro ceeds o f some form of

unlawf ul activity.

I n violation of Titl e 18 , United States Code ,

19 56 ( a ) ( 1 ) ( B ) ( i ) and 2 .

5 9


Count s 3 1 - 3 8

1 8 u . s . c . 1 9 5 1 ( Extortion Unde r Color o f Off i c i a l Right )


1 0 5 . The Grand Jury hereby incorporates by re ference , as

though fully s e t forth here in , each o f the a l l egat ions contained

in Counts 1 through 3 0 of this Indic tment .

1 0 6 . On mul t iple occas ions between on or about January 1 ,

2 0 0 2 , and o n o r about January 1 , 2 0 0 7 , i n the Middle D i s t rict o f

Pennsylvania , and e l s ewhere , the de fendant s ,


each aiding and abett ing the other and each aided and abe tted by

the other and by other pers ons known and unknown , did knowing ly ,

intentiona l ly and wi l l fully obs truct , de lay and affec t , and

att emp t to obstruc t , de lay and affe c t , comme rce and the movement

of any art i c le and commodity in commerce by extort ion , as those

terms are de f ined by 1 8 U . S . C . 1 9 5 1 ( b ) ( 2 ) and 1 9 5 1 ( b ) ( 3 ) , that

is : solic i t ing , demanding , and accept ing property , that i s ,

payment s in cas h , check and wire t rans fer from PARTICI PANT #1 ,

with his consent , induced by wrong ful use of fear and under co lor

of o f f icia l right .

Each of the fol lowing payments , which o c curred on o r about

the dates indi cated , cons t i tutes a separate count of thi s

Indic tment :

6 0


Count

3 1

3 2

3 3

34

35

3 6

3 7

3 8

Date

2- 15- 2004 -2 - 24 - 2004

4 - 3 0 - 2004

7 - 12 - 2004

9 - 23 - 2004

8 - 1 6 - 06

1 1 - 1 - 0 6

1 1 - 20 - 06

1 2 - 18 - 06

From

Vis ion Holdings, Inc.

Vision Holdings, Inc .

Vi s ion Holdings, Inc .

Vis ion Holdings , Inc .

Robert Powe l l

Robert Powe ll

Robert Powe l l

Robert Powe l l

Amount and Type of

$200,000 ( total of three checks )

$100,000 ( total of two checks )

$120,000 Wire Trans fer

$100,000 Wire Trans fer

$4 2,000 Cash

$20,000 Cash

$50,000 Cash

$ 3 1,5 00 Cash

In violation of T i tle 18, Uni ted S tates Code, 1 951 and 2 .

6 1


Count 39

18 u. s . c. 37 1 ( Conspiracy to Defraud the United States )


10 7 . The Grand Jury hereby incorporates by reference, as

though ful ly s e t forth herein, each of the a l legat ions contained

in Counts 1 through 38 of this Indictment .

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