Corrupt Judges Plead Guilty to Kickbacks, Tax Fraud

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Scranton is great, but New York is like Scranton on acid. No, on speed. Nah. On steroids.
– Michael Scott, The Office

The sleepy little town in the hills of Pennsylvania just got a hefty dose of publicity – the unwelcome kind. Known primarily as the fictional home Dunder Mifflin, the floundering paper company in NBC’s wildly popular (and one of my favorite shows) The Office, Scranton made national news, again, as the center of a judicial kickback scandal. Real life judges Mark A. Ciavarella Jr. and Michael T. Conahan made an appearance in Scranton’s federal court last week to plead guilty to wire fraud and income tax fraud in a scheme that has shocked the country. The two are accused of taking millions of dollars in financial kickbacks in exchange for sentencing teens to privately run youth detention centers. More than 5,000 teens were sentenced under Ciavarella during the scheme.

Under the plea agreement offered by Ciavarella and Conahan, each with serve 87 months in federal prison, a sentence that many believe isn’t long enough. Each has already been removed from their positions by the Pennsylvania Bar with a resulting loss of pension; they will be required to resign from the Pennsylvania bar.

Under the scheme, Conahan arranged contracts with two privately run detention centers to agree to accept the teens in exchange for kickbacks to the two judges; Ciavarella actually issued the sentencing to the teens. Payments for the contracts were made to a Florida company controlled by the two judges, to avoid suspicion. The source of the money was reportedly concealed as business expenses or rental payments.

The income, though gained illegally, was not reported properly on an income tax return and improper expenses were reportedly claimed for the years 2003 through 2006. According to the indictment (note that the link takes you to a pdf), the tax preparers for the judges were fed “material omissions and misclassifications” and have not been charged in the scandal. The plea agreement, which has not yet been accepted as filed, would not limit the IRS from collections activities in connection with the tax fraud.

The guilty pleas will perhaps mark an end to one of the most disturbing abuses of judicial power to surface in some time. An important part of our judicial system is a belief that the system works. Those who destroyed that belief have wronged more than those involved directly in the scheme: they have shattered the perception of a fair and just legal system. Hopefully, the families and courts of Luzerne County can find some peace with the understanding that those who broke that trust are being punished.

As for Ciavarella and Conahan? The two men, clearly hated (shouts of “Rot in hell!” resonated on the streets as they left the courthouse) remain free on bail until sentencing.

Image: Wikimedia, Creative Commons courtesy of Daniel Case