A northeastern Pennsylvania judge accepted kickbacks and extorted money in a $2.8 million scheme to turn the courthouse into a "cash cow" by locking up juvenile offenders in privately run detention facilities, a federal prosecutor said Tuesday as the former judge's trial began.
Lawyers delivered opening statements in the case of one-time Luzerne County Judge Mark Ciavarella, who has denied authorities' allegations of a racketeering plot. His attorney called the government's case "ludicrous" and said that while Ciavarella may have exercised poor judgment, he did not break the law.
In a courtroom scandal known as "kids for cash," the government has charged Ciavarella and another judge, Michael Conahan, with orchestrating a scheme to shut down the county-run detention center and arrange for a private facility to be built and run by cronies. Ciavarella, who presided over juvenile court, is accused of stocking the private jail with young offenders whose crimes were often minor.
Assistant U.S. Attorney Gordon Zubrod told jurors that Ciavarella accepted hundreds of thousands of dollars in kickbacks from Robert Mericle, a locally prominent construction company owner and the builder of the PA Child Care detention center outside Wilkes-Barre. Ciavarella also extorted cash from the center's co-owner, Robert Powell, and threatened to send juvenile delinquents elsewhere if he didn't get the money, Zubrod said.
The judges are accused of laundering the money through a series of shell companies, disguising some of the illicit cash as rental payments on a Florida condominium owned by their wives.
Ciavarella "used his judicial office to enrich himself in direct violation of his duty and oath as judge," Zubrod said, turning "the high office of judge into a cash cow, a money-making machine."
Zubrod said Powell knew he was being extorted, but he felt he had no choice but to pay because the detention center carried a $12 million mortgage and he needed Luzerne County to house its juvenile offenders there.
The judges "had him over a barrel," he said.
An IRS agent on Tuesday described a series of financial transactions in which hundreds of thousands of dollars flowed among bank accounts controlled by Mericle, Powell and the judges. The transactions were so complicated that the government needed a flow chart to help jurors keep track of the money.
The transfers became less complicated with time. Zubrod said Powell began stuffing envelopes with cash - totaling more than $140,000 - and sending them to Conahan's chambers at the courthouse. Conahan, the former president judge, has already pleaded guilty to a single count of racketeering conspiracy and awaits sentencing.
Investigators say Ciavarella routinely sent juvenile offenders to PA Child Care and to a sister facility in western Pennsylvania as part of the arrangement with Powell. The state Supreme Court threw out thousands of juvenile convictions issued by Ciavarella, saying he disregarded the constitutional rights of the defendants.
Defense attorney William Ruzzo denied the government's claims and signaled that Ciavarella will take the stand in his own defense.
"Mark Ciavarella never accepted a bribe or a kickback and he never extorted Mr. Powell," he said.
Ruzzo said Ciavarella had no leverage over Powell, a wealthy attorney and real estate developer. He also noted that Powell, who later recorded his conversations for authorities, failed to obtain any incriminating statements by Ciavarella.
"The guy wore a wire and couldn't get an admission. He couldn't get the smoking gun," Ruzzo said.
The defense also maintained that Ciavarella did not accept a kickback from Mericle, but a finder's fee - a common practice in the real estate industry. Ruzzo said Ciavarella didn't know that judicial ethics rules prohibited him from taking the money. But he said the jury must decide whether Ciavarella's actions were illegal, not unethical.
"There's no question he should have used better judgment on the bench," Ruzzo said.
Mericle, who has pleaded guilty to a lesser charge for his role in the alleged scheme and awaits sentencing, took the stand late Tuesday but testified only a few minutes before court was adjourned.
The alleged scheme dates to the late 1990s, when Ciavarella began pressing for a new detention center because the county-owned facility was dilapidated and beyond repair, with broken pipes and windows and infestations of rodents and insects.
In October 2002, Conahan, the president judge, decided that juvenile offenders would no longer be sent to the county-run center. He also removed funding for the detention center's staff from the court budget - effectively shutting it down.
In the meantime, PA Child Care had offered to lease its proposed new facility to the county for $37 million over 30 years. The three-member Luzerne County Board of Commissioners, which held the purse strings, considered the deal but preferred a less expensive option - a new county-owned detention center that could be built for less than $10 million.
"We thought financially it was the better option for us," former Commissioner Tom Makowski testified Tuesday.
The board borrowed $9.2 million to build a new detention center in Plains Township, outside Wilkes-Barre. But local homeowners sued successfully to block construction. Makowski and a second commissioner decided not to seek re-election and left office in early 2004.
In October of that year - with a new slate of commissioners now running the county - the board struck a 20-year, $58 million agreement with PA Child Care.