Actual Asher Complaint

8/9/2019 Actual Asher Complaint

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( JJW:jbc

PORUNITEO STATES OISTRICT COURT

THE MIDDLE DISTRICT OF PENNSYLVA.IUA

,NITEO STATES OF AMERICA ,,o. CRIMINAL,,. BUDD DWYERROBERT B. ASHER v"'" , \110:,I N 0 leT M EN T

MAY 13 '986...r:oNALO\ BERRY,CLERKIn t roduc t ion

- ~ The P["t!viously C h ~ r 9 e d Corporate and Ind iv idua l Defendan ts .

1. At a l l t i l l les r e levan t to the Indic tment , JOHN R.TORQUATO, JR w a s . r e s id en t or Callt'Ol:"nb. ["Baiding a t 214 ColtonSt r e e t , NeWpOl:t Besch, c a l i f o r n b 92663.

2. At .11 t11lles re l evan t to th e Indlct l l lent . JUDY ELLIS was Br e s id en t o f c a l i f o r n i a res id ing a t 214 COlton Stt::eet, NewportBeach, Cul fo . : : n ! . 93662.

3. At a l l t h l e s re lev l In t , WILl.IAM T. SI'lITH was an attoE:ney,l icensed to prac t i ce law in the Connonwelllith o f Pennsylvania , wi thof f ices a t 2931 N. Front St ree t . Harrhburg . Pennsylvania 17110.

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4. At a l l t imes re levant lILAN R. STONEMAN was an at torney ,l icensed to prac t i ce law in the St" ' te of Ca l i fo rn i a , with of f i c e sat 542 East Mam. Avenue, orange, California 92667.

5. At a l l t h l e s re levant to th i s indic tnlent , DAVID 1 .HERBERT "",s the S ta t e Direc tor o f the Bureau o f SOcia l se c u r i t yfor Public &PIployeee toc the COlD/IIonwealth o f Pennsylvania underthe Pennsylvania DepartJaent o f Labor a n Indus t ry with of f i c e s inthe Labor and Indus t ry Suildin


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10. On Apri l 13. 19B4 CCMPUTBR TECHNOLOGY ASSOCIATES, INC.(eTA, Inc .) t i l ed Art ic les of Incorporat ion with the C o ~ o n w e e l t h o f Penneylveni" declar ing it.a principal place o t business to be2931 N. Pront S t r e e t , RlIrr l l lbuc9. Pennsy lvan ia 11110.

11. The Art i c l e s of Incorporation to r CTA, Inc. declaredWILLIAM T. SMITH of 2931 N. pront Stree t , Harrisburg. Penn.ylvan!a17110 to be p r i n c i p a l s t o ck h o l d e r .

12. Th e A r t i c l e s ot Incorpora t ion for eTA., Inc . dec la red thePres ident to be JUDY ELLIS, 214 COlton St ree t , Nevpot't. Beach,Cal i fo rn ia 92663. and the Secre ta ry to be Jan ice IUncald , LaPill , C a l i f o r n i a 90623.

The Business of PICA Recovery.13. Under th e Federa l SOcial Secur i ty Ac t workez:-s elllployed by

ata te and loca l governlllenta c .n be covered by Federa l Old-A.ge andSurvivors D is a b i l i t y and Supplenlental Income B e n e f i t . (Soc ia lsecur i ty) by a c o n t r a c t u a l a g r e e ~ e n t ente red in to between thes ta te and federa l govern .an t . The Cb_onweal th o f Pennsylvaniaentered in to such a con t rac tua l agreelllent with the I"eder"lGovernment on August 20, 1952.

14. Under the agreelllent descr ibed above, elllployees o f s ta teand loc" l governments in Pennsylvania c"n becOllle e l i9 ib le forSocial s e c ur i t y be ne U ts i f they pay a tax i de n t i c a l to the t"x

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i_posed on pr iva te sec tor employees under the Federal InsuranceCOntribution ACt, 26 U.S.C. S 3 1 0 1 , ! ! ~ . ( re fe r red to hereaneras the FICA t a x I . 'Itle l l l Iount o t the PICA tax ia llIatched by theemploying s t a t e and/or p o l i t i c a l subdivis ion . In the ca. o felllployees o f Pennsylvania SChool D i a t d c t s , h a l f o f the tax 18paid by the e .p loyee an d the o ther ha l f Is paid j o in t ly by theIItate and elllployil'l9 ac:hool d i s t r i c t .

IS. In th e Sta te o f Penneylvllnia the above-descr ibed pr09l:8.covering col lec t ion o f the FICA tax from publ ic eIIployeee il ll ldndnlstered by II s t a t e o f H c i a l known 88 the Sta te Direc tor o fthe Bureau o f Soc ia l Secur i ty fo r Public Employees.

16. Under qu ide l in s e t up by the SOcia l Secur i tyAdrainistr l l t ion (S o c i a l Secur i ty Ruling 7 9 -3 1 ) . the FICA tall doe .not have to be paid on payments made to employees o f st", te andloca l govet"nments PJt"suant to a spec i f ic plan pt"ovi(ling tot"payaents because o f s ickness (as opposed to a cont inuat ion o fwages in sp i t e o f s ickness ) . I f the st" , te ot" loca l govet"nlllentsmistakenly lllade p a ~ e n t B o f l'IeA t axes fot" such pt!t"iods a c t e d i tcan be claimed fo t such payaenta agains t rutut"e PICA taxes with at esu l t ing t"efurd o f overpaid l'ICA taxes to tl\e involved elllployees.This ptocedure i s known as a PICA reCQvet"y.

11. The pt"ocedure followed in obtaining a c red i t to r a I"IC"recovety t"equires the s ta te or loca l governments to submit the i r

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, proof o f a qllal ifylng s ick ~ ph,n and proof o f the amount of~ I C A tax overpaid to the State Direetor ot Socia l Securi ty forPublic l!aployees who can au thor i ze an i amedia te c r ed i t fo r il l PICAOVlltpll)'lllent. The clait l . i ' then forwarded to th e Soc1,,1 SecuE"ityM.ini8 t l :a t ion toe eventual review and approval or r e j ec t i on .

18. The defeno:'ant corporat ions and t he i r of f i ce r s lindemployees i den t i f i ed 1n the pcecedin') paragraphs (paragraphs 1through 12) were in the business o f prepar ing and subnl i t t ing PICArecoveries on behal f o f . t a te and local g o v e r n ~ e n t B . Thi . serv iceWllS pecfor.ed pUI:8Uant to con t r ac t en t i t l i ng the "_ (aMan tcorpor l l l t lons to II fee based upon the l l lI lount o f the PICA recoveryobtained

The Relevant Pennaylvanil l Public Offic ia ls .19. At a l l t i_eB re levant to the i n d i c ~ e n t , R. BUDD DWYER

waB the elected Treasurer of the COftnonvealtb o f Pennsylvania.20. At a l l th les relevant to the indietrllent, ROBERT B. o\SHBR

vas Chairman ot the RepUblican State C Q ~ i t t e e of Pennsylvania.21. At a ll t i .. e8 relevant to the indictlllent, LeRoy Zi_erRlan

vae the elected AttOrney General of the COmlllQnvealth ofPennsylvania.

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22. At a l l t imes re levant to the indictment, Patrick T.Boyle served sa P re s s Secre t a ry to the Attorney Genera l o fthe Commonwealth of Pennsylvania.

23. At a l l t imes re levant to the i n d i c t . e n t , WILLIAM T.SHlTH was th e Republ ican County Chairman, o r Co-Chai rman, o fDauphin County .

24. At a l l t imes re levant to the ind ic tment , MARK E.PHENICIE was 8 Spec ia l Ass i s t an t t o the S t a t e Treasure r andT reasu re r o f th e Republ ican S ta t e Cogmi t t ee .

25. At all t i mes r e l ev an t to the i nd ic tment , Sen a to rEuqene F. Scanlon was an e l ec t ed S t a t e Sen a t o r and SenateMinori ty Whip o f t h e Senate o f th e Commonwealth o fPennsy lvan ia .

26. At a l l t im e ' re levant to the ind ic tmen t , David 1.Herbert was the Sta te Director of SOCial secur i ty fo rPubl i c Employee .

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'['HE GRANO JURY CR.J.R.GES:COUNT I - CONSPIRACY

1. The Grand Jury realle


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viola t ion of the laws ot the s ta te in which c o _ i t te d L e . theCo-fOnwe.uth o f Pennsylvania 18 1'.5. Ann. 54701 (Intel :"stateTranspor ta t ion in Aid ot Racketeel: ing).

3. It va8 pal:"t o f sa id eonspio:sey and scheme or a r t i f i c e todefraud and use the tac 11 i t lea o f i n t e r s t a t e C'OM/Ilecce to prollote,llIanage, es t ab l i sh , carry Ol'l and fac i l i t a te bribery t ha t :

(5) The previously indicted co-conspirators wouldlocate and i den t i t y e lec ted publ ic o f f i c i a l s who oooidbe InstrUlllentlll and inflUf!nt ia l in the .warding o f ..cont l :act to recove ... PIC'" t ax e s and would d e t e r . i n e i f SlIteSo fU c ta l s could be corrupt ly inf luenced;

(b l The previous ly indic ted co-consp i ra to rswould then a t t empt to obta in FICA recovery c o n t r a c t . trOllthe COIIIIllOnwealth o f Pennsylyania on " no-bi(l b a a i . bycol :rupt ly buying the inf luence of cer ta in publ ic Off ic ia l s ;

(c) The nMed defendants , who were themselvespubl ic o f f i c i a l s , would join the conapiracy , and fur theri t , by lI9reeing to be corrupt ly inf luenced in theawarding o f FICA recovery cont rac ts on a no-bid bas i s

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by payment of larg6 8 ~ of cBsh and/or l a ~ e ca.palgncon t r ibu t ions ,

(d l The prev ious ly i n d i c t ed co - co n s p i r a to r s wouldIIttelllpt to c or rup t ly inf luence lIIelllbers o f the[ .egis l_ t ...re o f the COlIlIIIonwealth o f Pennsylvania to passl e g i s l a t i o n which would p lace j ...r1 e d i c t l o n oyer PICArecovery on beha l f o f school e n t i t l e s in the Off ice o fS ta te Treasure r fo r the purpose o f c e n t r a l i z ing the"ward of a FICA recovery contrac t 11"1 an off ice whiCh thedefendants bel ieved they could (XlrJ:uptly inf luence l

eel The nMled defendants and preYiQusly ind ic tedco- conspi ra tor s would continue to ac t in 8 oorruptfashion during the course o f per toming such con t r ac t .with the publ i c o f f i c i a l defendan t s render ing d ec i s io n s ,opin ions , recommendations, votes and othe r eze rc i ses o fdl l lc re t ion t h a t wel:s favorable to the XE'l'. Ltd. d / b / aCTA, Ltd. and CTA, InC.1

(f) The n _ e d defendant publ ic o f f i c i a l s would becor rup t ly inf luenced by va r ious lIeans and lllethoo9inc luding, but not l i . i t e d to , the fo l lo l l ing:


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(1) o f f e r s o f la rge po l i t i c a l ca-palgncon t r ibu t ions and donat ions to va r ious pol i t i c " , lcommit tees , p a r t i e s and e l ec t ed o f f i c i a l s running tot"publ ic o f f i c e ;

(2) o f f e r s of o f cash payments , atock, patdt l :avel and athel : t h ings o f value to such of f i c i " ' l s ;

19l The named defendant publ ic of f i c i a lS wouldaccept the Offer s ee t for th llIbove in paragraph 3( f ) .subsec t ions ( I ) and (2) , and thereby al low the_se lvea tobe cor rup t ly inf luenced in t he i r o f f i c i a l conduct inJUllttee8 dea l ing with 8aid FICA I:ec:overy c on t r a c t s ;

(h I The named de f e nda n t pub l i c o f f i c i a l s would 91: ...n t ,",nd cause to be gran ted , l uc r a t i ve PICA recoverycontracts without COMpetitive bidding. notwithstandingthe fac t t ha t o the r s Wel:8 wil l ing to pel: forllsubstant ia l ly ident ical FICA recovery work at a muchlower c os t ;

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