Luzerne County Courthouse in Wilkes-Barre, Pennsylvania

The “Kids for cash” scandal unfolded in 2008 over judicial kickbacks at the Luzerne County Court of Common Pleas in Wilkes-Barre, Pennsylvania. Two judges, President Judge Mark Ciavarella and Senior Judge Michael Conahan, were accused of accepting money from the co-owner and builder of two private, for-profit juvenile facilities, in return for contracting with the facilities and imposing harsh sentences on juveniles brought before their courts in order to ensure that the detention centers would be utilized. Ciavarella and Conahan pleaded guilty on February 13, 2009, pursuant to a plea agreement, to federal charges of honest services fraud and conspiracy to defraud the United States (failing to report income to the Internal Revenue Service, known as tax evasion) in connection with receiving $2.6 million in payments from managers at PA Child Care in Pittston Township and its sister company Western PA Child Care in Butler County. The plea agreement was later voided by a federal judge, who was dissatisfied with the post-plea conduct of the defendants, and the two judges charged subsequently withdrew their guilty pleas, raising the possibility of a criminal trial.

A federal grand jury in Harrisburg, Pennsylvania returned a 48 count indictment against Ciavarella and Conahan including racketeering, fraud, money laundering, extortion, bribery and federal tax violations on September 9, 2009. Conahan entered a revised guilty plea to one count of racketeering conspiracy in July 2010 In a verdict reached at the conclusion of a jury trial, Ciavarella was convicted February 18, 2011 on 12 of the 39 counts he faced.Following the original plea agreement, the Pennsylvania Supreme Court ordered an investigation of the cases handled by the judges and following its outcome overturned several hundred convictions of youths in Luzerne County The Juvenile Law Center filed a class action lawsuit against the judges and numerous other parties, and the state legislature created a commission to investigate the wide-ranging juvenile justice problems in the county. (See: JLC’s growing list of related Court Documents)

 Investigation

An investigation into improper sentencing in Luzerne County began early in 2007 as a result of requests for assistance from several youths received by the Philadelphia-based Juvenile Law Center. Lawyers from the law center determined that several hundred cases were tried without the defendants receiving proper counsel. In April 2008, the Juvenile Law Center petitioned the Pennsylvania Supreme Court seeking relief for alleged violation of the youths’ civil rights. The application of relief was later denied, then reconsidered in January 2009 when charges of corruption against the judges surfaced.

The Federal Bureau of Investigation and the Internal Revenue Service also investigated the two judges while probing practices in Luzerne County, although the exact dates and scope of the investigations by the two federal agencies were not made public. Part of the investigation was revealed to have occurred during disciplinary hearings over the conduct of another former Luzerne County judge, Anne H. Lokuta. Lokuta was brought before the Judicial Conduct Board of Pennsylvania in November 2006 to answer charges of using court workers to do her personal bidding, openly displaying bias against some attorneys arguing before her, and publicly berating staff to cause mental distress. The board ruled against Lokuta in November 2008 and she was removed from the bench. During the course of the disciplinary hearings, Lokuta accused then Judge Michael Conahan of bullying behavior and charged that he was behind a conspiracy to have her removed. Lokuta aided the federal investigation into the “kids for cash” scheme prior to the determination of the disciplinary board, and a stay order was issued in March 2009 by the state Supreme Court in light of the ongoing corruption investigations, halting Lokuta’s removal and the election that was to be held in May to replace her.

 Charges and pleas

A statement from the office of the United States Attorney for the Middle District of Pennsylvania outlined the charges against the two judges on January 26, 2009. The charges outlined in the information described actions between 2000 and 2007 by both judges to assist in the construction and population of private juvenile facilities operated by the two Pennsylvania Child Care companies, acting in an official capacity in favor of the private prisons over the facility operated by Luzerne County. The U.S. Attorney charged that in 2002 Conahan, who at the time was President Judge of the court, used his authority to remove funding for the county-operated facility. The judges were alleged to have received “millions of dollars” in payments for the completion of a binding agreement between the court and the private facilities, co-owed by attorney Robert Powell, to use their services and the subsequent closing of the county facility,  The methods used to conceal the payments involved several parties and transactions which resulted in alleged tax evasion by the two. Ciavarella and Conahan were also charged with “Ordering juveniles to be sent to these facilities in which the judges had a financial interest even when Juvenile Probation Officers did not recommend detention”, according to the statement.

The plea agreement called for both judges to serve up to seven years in prison, pay fines and restitution, and accept responsibility for the crimes. However, on July 30, 2009, Judge Edwin M. Kosik of Federal District Court in Scranton, Pennsylvania rejected the plea agreement, citing “post-guilty plea conduct and expressions from the defendants” that he ruled did not satisfy the terms of the agreement. Attorneys for the two judges brought a motion requesting reconsideration of the judge’s rejection of the plea agreement. The motion was denied on August 24, and Ciavarella and Conahan subsequently withdrew their guilty pleas, an action which could result in a jury trial and possible additional charges against the former judges. On September 9, a federal grand jury in Harrisburg, Pennsylvania returned a 48 count indictment against Ciavarella and Conahan including racketeering, fraud, money laundering, extortion, bribery, and federal tax violations. Both judges were arraigned on the charges on September 15, 2009. Ciavarella and Conahan entered pleas of not guilty to the 48 count indictment and remained free on one million dollar bail despite federal prosecutors contentions that their bail should be raised since they now faced the possibility of substantial more prison time and that there was evidence of their attempts to shield assets.

Robert Powell, an attorney, and co-owner of the two juvenile detention facilities at the heart of the scandal, pleaded guilty on July 1 to failing to report a felony and being an accessory to tax evasion conspiracy, in connection with $770,000 in kickbacks he paid to Ciavarella and Conahan in exchange for facilitating the development of his facilities The Pennsylvania Supreme Court temporarily suspended Powell’s law license on September 1, citing his criminal conviction.Robert Mericle, the prominent real estate developer who built the two juvenile detention facilities, pleaded guilty on September 3, to failing to disclose a felony, for not revealing to a grand jury that he had paid $2.1 million to Ciavarella and Conahan as a finder’s fee. As part of his plea, Mericle has agreed to pay $2.15 million to fund local children’s health and welfare programs. Mericle faces up to three years in prison and a maximum $250,000 fine but will likely serve one year or even probation pursuant to his plea agreement.

Sandra Brulo, the former Deputy Director of Forensic Services for the Luzerne County Juvenile Probation Office agreed to plead guilty in March to federal obstruction of justice. When she became aware that she had been named in the federal civil action, Brulo fabricated a recommendation concerning a juvenile who appeared before the Luzerne County Juvenile Court in September of 2007. She backdated the fabricated recommendation and changed her original recommendation of detention to probation

Criminal verdicts

On February 18, 2011, following a trial, a federal jury convicted Ciavarella on 12 of the 39 counts he faced including racketeering, a crime in which prosecutors said the former judge used children “as pawns to enrich himself.” In convicting Ciavarella of racketeering, the jury agreed with prosecutors that he and another corrupt judge had taken an illegal payment of nearly $1 million from a juvenile detention center’s builder and then hidden the money. The panel of six men and six women also found Ciavarella guilty of “honest services mail fraud” and of being a tax cheat, for failing to list that money and more on his annual public financial-disclosure forms and on four years of tax returns. In addition, they found him guilty of conspiring to launder money. The jurors acquitted Ciavarella of extortion and bribery in connection with $1.9 million that prosecutors said the judges extracted from the builder and owner of two juvenile-detention centers, including allegations that Ciavarella shared in FedEx boxes stuffed with tens of thousands of dollars in cash.

Following Ciavarella’s conviction, he and his lawyer appeared on the steps of the courthouse to give an impromptu press conference. The press conference was interrupted by Sandy Fonzo, whose son Edward Kenzakoski committed suicide after Ciavarella gave him a jail sentence, despite Kenzakoski’s first-time offender status.

In August 2011, Ciavarella was sentenced to 28 years in federal prison for his involvement in the Kids for Cash scandal.

 Victim lawsuits

Acting under a rarely used power established in 1722 and reserved for extraordinary circumstances, known as “King’s Bench jurisdiction“,

the Pennsylvania Supreme Court appointed a special master on February 11, 2009 to review all juvenile cases handled by Ciavarella. Senior Judge Arthur Grim of the Berks County Court of Common Pleas was appointed special master and returned his findings in an interim report dated March 11. On March 26 the Supreme Court approved Grim’s recommendations and ruled that Ciavarella had violated the constitutional rights of thousands of juveniles, and hundreds of juvenile convictions were ordered overturnedA class action lawsuit was filed by the Juvenile Law Center on behalf of the juveniles who were adjudicated delinquent by Ciavarella despite not being represented by counsel or advised of their rights. Besides naming Ciavarella and Conahan, the suit seeks damages under the civil portion of the Racketeer Influenced and Corrupt Organizations Act (RICO) against the judges’ spouses and business associates, shell companies, prison operators, and Luzerne County. Three other federal lawsuits filed on behalf of the victims have been consolidated with the Juvenile Law Center lawsuit into a master class action. An amended master complaint was filed on August 28, 2009.In June 2010 an injunction was filed on behalf of PA Child Care, Western PA Child Care, and Mid Atlantic Youth Services, the company that provided treatment programs at the juvenile detention centers,to prevent the ordered destruction of thousands of juveniles records on the grounds the records are needed for the defenses case.^[ Interbranch Commission on Juvenile Justice

In the aftermath of the federal charges and defendant pleas, the Pennsylvania General Assembly moved to create a commission to investigate the entire set of circumstances surrounding the miscarriage of justice in Luzerne County. Sponsored by Representative Todd Eachus of Butler Township in Luzerne County, House Bill 1648 established the Interbranch Commission on Juvenile Justice in July 2009. The commission comprises 11 members, appointed from each branch of government in Pennsylvania, with four members chosen by the judiciary, four by the legislature and three by the governor. In signing the legislation on August 7, 2009, Governor Ed Rendell castigated Ciavarella and Conahan, saying they “violated the rights of as many as 6000 young people by denying them basic rights to counsel and handing down outrageously excessive sentences. The lives of these young people and their families were changed forever.”Scheduled to meet a minimum of once per month, the commission was organized to investigate the actions of and damages caused by the two judges and review the state of the Luzerne County courts left in the wake of their tenures. The commission was given power of subpoena and was required to complete its work and report its recommendations and findings to the three branches of state government by May 31, 2010.