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FBI County probe

Sources: Forfeited cash eyed

Whether money from confiscated video poker machines made it to treasurer’s office at issue.

By Terrie Morgan-Besecker tmorgan@timesleader.com
Law & Order Reporter

WILKES-BARRE - The latest FBI probe into Luzerne County finances is focusing on whether money forfeited by liquor license holders cited for gambling activities was turned over to the county treasurer’s office, according to two sources familiar with the investigation.

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• Background on federal probe

The sources, who spoke on condition of anonymity, said questions arose after it was discovered the process by which money is forfeited to the court had not been followed in some cases. That negated a checks-and-balance system, raising questions as to whether the money was deposited into county accounts.

Luzerne County District Attorney Jacqueline Musto Carroll confirmed last week that she asked the FBI to investigate the possible theft of county funds.

Musto Carroll said Friday she could not comment on the focus of the investigation. Speaking generally, she said forfeiture of money seized related to gambling, drug offenses or some other criminal activity is handled by the District Attorney’s office.

Gambling cases are investigated by the State Police Bureau of Liquor Control Enforcement, which will either file criminal charges against the licensee or handle the case administratively by filing an action with the Liquor Control Board.

If a case is handled administratively, an administrative law judge with the LCB will hear evidence and issue an enforcement action, such as a fine or license suspension, if the violation is proven. Money seized is subject to forfeiture regardless if criminal charges were filed, said Dave Pedri, an assistant district attorney who handles forfeitures for the office.

The LCE confiscated a total of 76 video poker machines from 33 licensed establishments in Luzerne County from January 2007 until August 2008, according to the LCB and its office of administrative law judge. Information on the amount of money contained in the machines was not immediately available Friday.

Pedri said under the forfeiture process, the LCE will notify the district attorney’s office that it has confiscated gambling proceeds, either from a video poker machine or other illegal activity, such as a football betting pool. The agency will then ask the office to file a forfeiture petition with the court.

The office will draft the petition, then bring it to a judge for a signature. Once signed, the forfeited money is turned over to the district attorney’s office, which holds it in a special forfeiture fund used to purchase equipment for law-enforcement agencies.

The sources said the FBI investigation – which was requested by Musto Carroll – was launched after it was learned that some court orders relating to gambling cases did not go through the district attorney’s office, but instead were presented directly to the court administrator’s office, which took possession of the forfeited funds.

The sources stressed that no one in the district attorney’s office or the LCE is suspected of any wrongdoing or neglect of duty. The focus is on the court administrator’s office to explain why it handled the cases directly, and to provide documentation showing the funds were deposited with the county treasurer.

Deputy Treasurer Dominick DePolo confirmed last week that FBI agents had served a subpoena on the treasurer’s office seeking information relating to financial activity of the court system. DePolo said he could not comment on the nature of the records the FBI is seeking.

Questioned Thursday about how forfeiture money is accounted for, DePolo said it will be difficult to determine whether the money was turned over to the treasurer’s office because court administration had no specific budget code for forfeiture proceeds.

DePolo said that money likely would have been lumped into some other category within court administration, perhaps “other revenue.” The only way to determine if the forfeiture money was turned over would be to go back through individual receipt books to see if a description is included, he said.

Court Administrator William Sharkey remained on a 30-day medical leave on Friday and could not be reached for comment. Deputy Court Administrator Jack Mulroy said he was “not in a position” to comment on the investigation.

Attorney Louis Sciandra, solicitor for the office, said he could not comment because rules of professional conduct prevent him from speaking about a pending investigation.

Terrie Morgan-Besecker, a Times Leader staff writer, may be reached at 570-829-7179.