Millionaire developer: ‘I’m ashamed to be here’

Last updated: April 26. 2014 7:39AM - 20135 Views
By - rdupuis@civitasmedia.com



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More on Mericle, Musto

• Read court documents with this story online, at www.timesleader.com

• Read more about Friday’s sentencing, Page 5A

• Read Raphael Musto’s obituary, Page 6A

• See www.timesleader.com for a photo display of Musto’s career



SCRANTON — Despite his money and influence, his extensive record of philanthropy and his cooperation with federal prosecutors, businessman Robert K. Mericle is headed to prison.


“This false information to the government was nothing but corruption,” U.S. District Judge Edwin Kosik said Friday morning as he handed down a one-year sentence against Mericle, the final major player in the “Kids for Cash” scandal to be sentenced.


He pleaded guilty in 2009 to a federal charge of withholding information on a crime.


Federal prosecutors accused Mericle, 51, of helping then-Luzerne County judges Mark Ciavarella and Michael Conahan conceal the source of more than $2 million in “finder’s fees” paid to them by Mericle and attorney Robert Powell in connection with the construction of two juvenile detention centers built by Mericle’s company.


Paying the fees was not illegal, but at Ciavarella’s request Mericle sent them through a third party — Powell, the former co-owner of the centers. Mericle’s crime was not disclosing this action when questioned by federal authorities.


Mericle had little to say in court on Friday, offering only a brief statement.


“I’m ashamed to be here,” said Mericle.


“I apologize for what I have done. I am here by my own actions, and I take full responsibility,” the Jackson Township resident told Kosik.


But Mericle’s public act of contrition contrasted with the words of defense attorney David Zinn, who at one point described Mericle’s initial dishonesty with investigators as being among initial “bumps” followed by years of cooperating with investigators probing corruption in Luzerne County, from the judicial scandal to other political malfeasance.


“His cooperation was not perfect, but it was close, your honor,” Zinn, of Washington, D.C., told the judge. “He understands that what he did was wrong. He has worked four-and-a-half years to amend that.”


Kosik seemed unconvinced.


“Of course, the bumps you’re talking about are instances in which he was untruthful, would you agree?” the judge replied.


“I don’t mean, by describing it as a bump in the road, to minimize it. My client, Mr. Mericle, kicks himself every day,” said Zinn.


Background


In 2009 federal prosecutors charged Ciavarella and Conahan with participating in a $2.8 million kickback scheme related to the construction of the PA Child Care facility in Pittston Township and the Western PA Child Care Center in Butler County, and the placement of youths in the facilities.


Ciavarella and Conahan were indicted after Kosik rejected plea deals reached with prosecutors that would have sent them to prison for 87 months and noted the sentences were well below the advisory guidelines for the felony charges of wire fraud and conspiracy.


Conahan ultimately pleaded guilty to a charge of racketeering conspiracy and was sentenced to 17 1/2 years in prison.


Powell pleaded guilty to failing to report the illegal activity of Ciavarella and Conahan. He cooperated with federal investigators and wore a concealed recording device in meetings with the former judges. He completed an 18-month sentence in early 2013.


Powell, one of the co-owners of the juvenile detention centers at the heart of the scandal, testified at Ciavarella’s trial that the former judges extorted money from him in exchange for actions they took on the bench related to the centers.


Ciavarella was the only one of the four key players in the scandal to go to trial. He was convicted in 2011 by a federal jury on 12 out of 39 counts and sentenced to 28 years in what has widely been called the “Kids for Cash” scandal, a label he has repeatedly rejected, insisting he never incarcerated children in exchange for money.


His chain of appeals came to an end earlier this year, when the U.S. Supreme Court rejected Ciavarella’s petition to hear an appeal of his conviction and sentence.


Mericle, meanwhile, languished in limbo, as his case was linked to others.


In 2009, it was reported that the charge against him carries a maximum sentence of three years in prison, but that Mericle likely faced no more than four to 10 months behind bars based on federal sentencing guidelines, and that he could be eligible for probation if he continued to cooperate with prosecutors.


In January 2011, federal prosecutors amended the deal, calling instead for 12 to 18 months in prison. That followed Mericle’s implication in other corruption cases, including alleged dealings with former state Sen. Raphael Musto.


Musto’s ill health delayed his trial, which was finally put on hold in January. Then, Kosik signed an order setting a sentencing date for Mericle.


Musto, 85, died Thursday, the day before Mericle’s sentencing.


Statements of support


Mericle walked into court Friday facing the prospect of an eight-to-14-month prison sentence under standard sentencing guidelines.


The U.S. Attorney’s Office sought a reduced sentence of six to eight months, citing Mericle’s cooperation with the government, including his testimony against Ciavarella. The government even said, in previous filings, that it would take no position on whether Mericle should serve his sentence behind bars or under some form of probation.


Mericle’s attorneys wanted even more of a break.


“Let Mr. Mericle continue to work. Let Mr. Mericle continue to help people. That’s what he does,” Zinn argued, telling the judge that Mericle’s record of philanthropy deserved consideration at sentencing for being “extraordinary.” He predicted that putting the businessman behind bars would harm the hundreds of workers and subcontractors who rely on him for employment.


“He is the business, your honor,” Zinn said. “He has the knowledge. He’s a hands-on person. He’s important to the business.”


His attorneys have acknowledged the sentencing guidelines discourage against considering good works to lower a sentence, but the courts allow it in “exceptional” cases such as Mericle who over the past 15 years donated more than $19 million, more than 20 percent of his gross income to non-profit organizations.


In Mericle’s defense, the court on Friday heard Zinn read from a few letters of support written on Mericle’s behalf prior to sentencing — a mere handful of the hundreds that were sent to the court.


Character witnesses


They also heard from several character witnesses who spoke on Mericle’s behalf. As with many of the letters, Mericle’s generosity, family values and civic spirit were praised. Among them:


• Joseph Onzik, a former Swoyersville councilman, spoke of working for Mericle and how the businessman provided support to him during several family crises, as well as providing machinery and materials for Little League projects Onzik was working on.


• Jim Thomas, YMCA executive director in Wilkes-Barre, spoke of a decades-long relationship with Mericle, whom he said provided money and services to the agency when desperately needed.


• Engineer Tom Lawson spoke of working with Mericle during the 2011 Susquehanna River flooding, when Mericle donated his efforts to help prevent a levee break that would have devastated the West Side.


• Penny Mericle, the developer’s sister, who spoke about a “self-made man” whose family lost everything in the 1972 Agnes flood, and whose work ethic and support for family were evident from the time he was 5. “I can assure you, he would help a stranger as well,” she said.


“Rob’s character should be defined not by a moment, but by a lifetime,” she said.


The packed courtroom also heard a few more words from Mericle himself, via Kosik, as the the judge read from a letter Mericle sent to him on Thursday.


In it, the judge said, Mericle wrote that “he believes he should have told some people to go to Hell, and he didn’t.”


And, critically, “he tells us he was not truthful,” Kosik continued.


“I believe Mr. Mericle sits here in court embarrassed,” Kosik said.


“He asks for no consideration by this court, as has been asked for by counsel.”


Nor was any granted.


Kosik granted the government’s request for a reduced offense level and denied Mericle’s motion for an additional reduction. But then he said that an “upward departure” was warranted by Mericle’s actions.


“Mr. Mericle acknowledges, the first sentence in his letter, about the falsehoods to the government and the investigators in this case,” Kosik said.


“That’s his most serious transgression,” Kosik said, calling the untruths “nothing but corruption.”


Prosecution’s arguments


Assistant U.S. Attorney Michael Consiglio took aim at Zinn’s contention that putting Mericle in jail would cause harm to the businessman’s employees and contractors.


“There are collateral consequences to criminal conduct,” Consiglio said. “That is the consequence Mr. Mericle should have thought about before he engaged in such criminal conduct — the lives he was going to impact by such conduct.”


But Consiglio also reiterated that the government intended to stand behind its plea deal, in which, as noted, there was no position on how Mericle should serve any sentence imposed by the judge.


Zinn stressed that even the government’s own documents pointed out that Mericle never engaged in any “quid pro quo,” and never took any cash connected with the youths placed in the center.


“He built a building. He was the lowest bidder for the building. He had no continuing involvement with its operation,” Zinn said.


For Kosik, the main point was that Mericle initially lied to investigators, as the developer admitted, regardless of what he did to cooperate later.


“You can’t characterize Mr. Mericle’s conduct as other than criminal conduct,” Kosik said.


“He knows, and everyone in this room knows what the works of those judges and the contributors to those works have done to the character of Luzerne County,” he said.


Sentence details


In addition to his prison time, Mericle must serve one year post-release supervision, he must pay $250,100 in fines and he must perform 100 hours of community service.


The judge initially said Mericle would have until 2 p.m. May 14 to self-report to whatever facility the Bureau of Prisons chooses for his incarceration. The defendant’s attorneys asked for additional time so that Mericle might put his affairs in order.


According to paperwork signed later Friday by Kosik, Mericle now has until June 2 to report. Kosik also recommended to the bureau that they “designate a facility proximal to the defendant’s family in Dallas, Pennsylvania, as the place of service of this sentence.”


Reactions


In sharp contrast with the noise and speeches given during previous sentencings of people associated with the “Kids for Cash” scandal, Friday’s hearing was marked by relative silence: There were no post-sentence press conferences by Mericle, his attorneys or the prosecution.


Instead, the developer picked up his cellphone and apparently began a conversation with someone, ignoring reporters clamoring for a comment as Mericle descended the Linden Street steps of the courthouse and was hustled into a waiting SUV, which quickly sped away.


Mericle’s attorneys likewise offered no comment, and officials in the U.S. Attorney’s Office said everyone had left after the hearing, and referred any questions to a spokeswoman in Harrisburg.


In a statement released later by the office, U.S. Attorney Peter Smith characterized the sentence as “appropriate in view of the factors considered by the Court.”


The government’s most powerful statement, perhaps, came in the final words offered by prosecutor Consiglio before Kosik handed down the sentence.


“This was a complex scheme,” Consiglio said, taking aim at the defense for trying “to minimize the role” Mericle played in the Ciavarella-Conahan-Powell dealings.


“Mr. Mericle was involved in concealing this scheme in many ways,” he said.


But Consiglio also drew a parallel between those who argued that the Wyoming Valley would have been a much different place without Mericle’s efforts during the 2011 floods.


“This community has had public corruption for a very long time,” Consiglio said, saying public corruption happens because “corrupt public officials have relationships” with people willing to pay them in an effort to exert influence.


“This community will remain the same if there is no punishment for those who pay,” he said.


 
 
 
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