United States v. Ciavarella, CRIMINAL NO. 3:09-CR-272

• Decision Date: 08 January 2018
• Docket Number: CRIMINAL NO. 3:09-CR-272
• Parties: UNITED STATES OF AMERICA v. MARK A. CIAVARELLA, JR., Defendant
• Court: U.S. District Court — Middle District of Pennsylvania

UNITED STATES OF AMERICA v. MARK A. CIAVARELLA, JR., Defendant

CRIMINAL NO. 3:09-CR-272

UNITED STATES DISTRICT COURT FOR THE MIDDLE DISTRICT OF PENNSYLVANIA

January 8, 2018

(Chief Judge Conner)

MEMORANDUM

Defendant Mark A. Ciavarella, Jr. ("Ciavarella"), is a former judge of the Court of Common Pleas of Luzerne County, Pennsylvania. In February of 2011, a jury found Ciavarella guilty of racketeering, racketeering conspiracy, honest services mail fraud, money laundering conspiracy, conspiracy to defraud the United States, and subscribing and filing a materially false tax return. (Doc. 216). The court sentenced Ciavarella to 336 months' imprisonment and 3 years of supervised release. (Doc. 272). The court also ordered Ciavarella to pay restitution in the amount of $1,173,791.94 and to forfeit $997,600. (Id.)

Ciavarella now moves to vacate, set aside, and correct his conviction and sentence under 28 U.S.C. § 2255. Ciavarella also moves to supplement his original Section 2255 motion to include a claim pursuant to McDonnell v. United States, 579 U.S. ___, 136 S. Ct. 2355 (2016).

I. Factual Background & Procedural History¹

Ciavarella served as judge on the Luzerne County Court of Common Pleas from 1996 through January of 2009. United States v. Ciavarella, 716 F.3d 705, 713 (3d Cir. 2013). During his tenure, Ciavarella served primarily on the Juvenile Court. Id. Ciavarella was appointed President Judge in January of 2007, succeeding his former colleague and codefendant, Michael T. Conahan ("Conahan"). Id. at 713-14. In late 2008, Ciavarella and Conahan were accused of receiving nearly $3 million in exchange for their respective roles in facilitating construction and ensuring continued operation of two private juvenile detention centers in the Commonwealth of Pennsylvania. Id. at 713. Two other key players?commercial builder Robert Mericle ("Mericle") and local attorney and businessman Robert Powell ("Powell")?were also criminally charged. See id.

Prosecution of Ciavarella and Conahan began with the filing of a felony information on January 26, 2009. United States v. Ciavarella, No. 3:09-CR-28, Doc. 1 (M.D. Pa. Jan. 26, 2009). The information charged one count of honest services wire fraud and one count of conspiracy to defraud the United States against both defendants. Id. Ciavarella and Conahan entered Rule 11(c)(1)(C) plea agreements wherein all parties jointly agreed to a binding sentencing recommendation of 87 months' imprisonment. See id., Docs. 3, 5. The plea agreements contained expresswaivers of several defenses, including the statute of limitations. Id., Doc. 3 at 3; Doc. 5 at 3. Following receipt and review of the defendants' presentence reports, Judge Edwin M. Kosik rejected the Rule 11(c)(1)(C) agreements, observing that the proposed sentences fell "well below" the Guidelines for the offenses charged. United States v. Ciavarella, No. 3:09-CR-28, 2009 WL 6032443, at *2-3 (M.D. Pa. July 31, 2009). Ciavarella and Conahan withdrew their guilty pleas.

On September 9, 2009, a grand jury returned a 48-count indictment against both defendants. (Doc. 1). Albert J. Flora, Jr., Esquire ("Attorney Flora") and William Ruzzo, Esquire ("Attorney Ruzzo") entered appearances on Ciavarella's behalf. (Docs. 10-11). Defendants answered the indictment with a bevy of pretrial motions?44 in all. (Docs. 34-78). Shortly after the motions were filed, Conahan agreed to plead guilty to racketeering conspiracy. (See Doc. 106). Judge Kosik accepted Conahan's guilty plea on July 23, 2010. (Doc. 122).

The grand jury returned a 39-count superseding indictment on September 29, 2010 charging Ciavarella as follows:

8 Count 1: racketeering in violation of the Racketeer Influenced and Corrupt Organizations Act ("RICO"), 18 U.S.C. § 1962(c), between approximately June of 2000 and January 1, 2007;

8 Count 2: racketeering conspiracy in violation of 18 U.S.C. § 1962(d), from on or about December of 2001 to on or about the date of the superseding indictment;

8 Counts 3 through 6: honest services wire fraud in violation of 18 U.S.C. §§ 2, 1343, and 1346, for a scheme executed through wire transmissions on July 12, 2004; September 23, 2004; July 15, 2005; and February 3, 2006, respectively;8 Counts 7 through 10: honest services mail fraud in violation of 18 U.S.C. §§ 2, 1341, and 1346, for a scheme executed through the mailing of materially false annual statements of financial interests to the Administrative Office of the Pennsylvania Courts in April 2004; March 2005; April 2006; and March 2007, respectively;

8 Counts 11 through 20: corrupt receipt of a bribe or reward in exchange for official action in violation of 18 U.S.C. § 666(a)(1)(B) for payments received between February 15 and February 24, 2004; on April 30, 2004; on July 12, 2004; on September 23, 2004; on July 15, 2005; on February 3, 2006; on August 16, 2006; on November 1, 2006; on November 20, 2006; and on December 18, 2006, respectively;

8 Count 21: conspiracy to launder money in violation of 18 U.S.C. § 1956(h), from on or about January 1, 2001 to on or about the date of the superseding indictment;

8 Counts 22 through 26: money laundering in violation of 18 U.S.C. § 1956(a)(1)(B)(i), on or about January 20, 2004; February 24, 2004; May 3, 2004; July 12, 2004; and September 23, 2004;

8 Counts 27 through 34: extortion in violation of the Hobbs Act, 18 U.S.C. § 1951, for payments between February 15 and February 24, 2004; on April 30, 2004; on July 12, 2004; on September 23, 2004; on August 16, 2006; on November 1, 2006; on November 20, 2006; and on December 18, 2006, respectively;

8 Count 35: conspiracy to defraud the United States in violation of 18 U.S.C. § 371, between on or about January 1, 2002 and May 21, 2007; and

8 Counts 36 through 39: subscribing and filing a materially false tax return in violation of 26 U.S.C. § 7206(1), on or about April 15, 2004; April 15, 2005; April 15, 2006; and April 15, 2007, respectively.

(Doc. 134). Count 1 alleged 13 separate acts of racketeering activity in support of the substantive RICO charge. (Id. at 12-28). The superseding indictment also included forfeiture allegations. (Id. at 71-74).

Ciavarella renewed his earlier pretrial motions, (see Doc. 148), and filed several additional motions to dismiss. Of particular relevance herein, Ciavarella sought to dismiss Counts 3 through 5, 7 through 9, 11 through 14, 22 through 25, and 27 through 30 on statute of limitations grounds, and all honest services-related counts based upon the Supreme Court's then-recent decision in Skilling v. United States, 561 U.S. 358 (2010). (See Docs. 149, 151). Judge Kosik denied Ciavarella's motions in a memorandum and order (Doc. 164) dated December 15, 2010. Notably, therein, Judge Kosik found that Ciavarella waived the limitations defense in his earlier plea agreement. (Id. at 2). Judge Kosik also determined that the government's allegata survived scrutiny under Skilling. (Id. at 1-2).

Ciavarella's trial commenced with jury selection on February 7, 2011. Evidence at trial established that Ciavarella introduced two local businessmen, Powell and Mericle, with the goal of constructing a private juvenile detention center in Luzerne County to replace a dilapidated county-run facility. See Ciavarella, 716 F.3d at 714. Powell and a business associate created Pennsylvania Child Care, LLC ("PACC") to develop the center and hired Mericle's construction company to build it. Id. As part of a successful effort to thwart the county's plan to build and operate its own facility, Ciavarella and Conahan executed a placement agreement between the county and PACC, guaranteeing placement of the county's juvenile offenders at PACC at a contract price of $1.314 million per year. Id. At the end of Januaryof 2003, as construction neared completion, Mericle transferred a referral fee of $997,600 in three separate payments to Ciavarella and Conahan in a series of wire transfers between various conduits. Id. In January of 2004, the defendants and their wives formed Pinnacle Group of Jupiter, LLC ("Pinnacle"), a corporation they used for channeling funds associated with PACC. Id.

The jury heard evidence that Ciavarella, in his capacity as judge on the Juvenile Court, "leveraged" his position "to place juvenile offenders with PACC" to ensure the facility's continued success. Id. at 715. According to trial testimony, the judges believed they were entitled to join in that success. See id. The judges directed Powell to transfer their perceived "share" of the profits to Pinnacle. Id. From January through September of 2004, Powell made payments to the judges totaling $590,000. Id. He disguised the payments by labeling them as "rent" for an uninhabitable condominium purchased by Pinnacle in Jupiter, Florida. Id.

When Mericle and Powell decided to build a second juvenile detention center, Western PA Child Care ("WPACC"), and to expand PACC, Ciavarella and Conahan received additional referral fees: $1 million in July of 2005 for WPACC's construction and $150,000 in February of 2006 for expansion of PACC. Id. at 714. Powell distributed additional proceeds to the judges totaling $143,500 from August through December of 2006 by delivering "boxes filled with cash" to Conahan and his judicial assistant. Id. at 715. Ciavarella admitted at trial that he falsified tax returns to conceal this income from the Internal Revenue Service and failed to report financial interests in PACC and WPACC to the Administrative Office of the Pennsylvania Courts. (See 2/15/11 Trial Tr. 58:18-59:19, 69:7-72:2); see alsoCiavarella, 716 F.3d at 714-15. He denied that any payments were bribes, kickbacks, or the product of extortion, and denied knowledge of the rent payments and the deliveries of cash. (See, e.g., 2/8/11 Trial Tr. 27:16-28:8, 31:25-45:21; 2/15/11 Trial Tr. 25:18-26:13, 67:17-19; 2/16/11 Trial Tr. 52:2-25).

After seven days of evidence and two and a half days of deliberation, the jury convicted Ciavarella on 12 of 39 counts:...