Federal prosecutors have reached a second plea agreement with a former Luzerne County judge who admitted in December to fixing the appointment of a neutral arbitrator for a UM/UIM case in exchange for use of a New Jersey beach house.
Michael T. Toole now faces one count of corrupt receipt of a reward for official actions instead of an honest services fraud charge, according to documents filed in the U.S. District Court for the Middle District of Pennsylvania. U.S. Attorney Peter J. Smith said in a press release that the change was made in response to a U.S. Supreme Court ruling on the constitutionality of the federal “honest services” fraud statute.
The news comes one week after prosecutors filed a superseding indictment against Toole’s former judicial colleague, Mark A. Ciavarella Jr., for the same reason.
In both cases, the former judges seem to have benefited from the U.S. Supreme Court’s decision in Skilling v. United States and two related cases to limit honest services fraud charges to cover only bribes and kickbacks. The law was previously used by federal prosecutors to file charges for a wide range of illicit activities.
For Toole, his penalty exposure was reduced from a maximum of 23 years in prison and $350,000 in fines to 13 years in prison and $350,000 in fines.
For Ciavarella, who has pleaded not guilty to accepting more than $2.8 million from the builder and former co-owner of two private juvenile detention facilities in exchange for sending juveniles there, there was a reduction in criminal counts — from 48 to 39.
Though Toole’s new plea agreement was filed with a superseding criminal information, aspects of the original agreement and information, both of which were filed in December, still appear to hold.
The former judge was not released from his guilty plea regarding tax fraud, which was mentioned early in the latest plea agreement.
That crime arose from Toole’s acceptance of approximately $30,000 in cash in October 2006 for referring a case to an unnamed attorney, according to Smith. Toole failed to report that money on his tax return.
Sources have identified that attorney as Robert J. Powell, who also served as a co-owner of the juvenile detention facilities at the core of Ciavarella’s charges.
Toole’s latest plea agreement still calls for him to cooperate with federal investigators by “providing all information known to the defendant regarding any criminal activity.”
That information may not be used against Toole during sentencing, according to the plea agreement.
Frank W. Nocito, one of Toole’s attorneys, did not return a call seeking comment.
While federal investigators did not specifically identify the unnamed attorney who provided Toole with use of the New Jersey beach house, sources and a review of court records identified that person as Harry V. Cardoni, the former managing member of Cardoni & Associates in Kingston, Pa.
Court records show that Cardoni filed a petition to appoint a neutral arbitrator in a March 2006 case, Gazenski v. Erie Insurance Exchange , that was handled by Toole. Records also show that Gazenski was the only UM/UIM neutral arbitrator appointment the judge handled in March 2006.
Cardoni is listed as having a property in Long Beach Township, N.J. The property is located within a block of the beach and tax records from Ocean County, N.J., where Long Beach Township is located, show Cardoni’s property is valued at $1,672,000.
One of the ways Toole was alleged to have ruled improperly in Cardoni’s favor was in the manner in which Toole oversaw the appointment of a neutral arbitrator in a UM/UIM case the attorney was handling in March 2006.
According to both the original and superseding informations, Toole, “through the use of an intermediary, secretly asked Participant 1″ to tell him who the attorney wanted him to appoint as a neutral arbitrator in the case. Toole appointed the person “Participant 1″ requested, the information said.
The neutral arbitrator in Gazenski was Bruce Phillips of Wetzel Caverly Shea Phillips & Rodgers in Wilkes-Barre, according to court records.
Neither Phillips nor Cardoni have ever been charged with any wrongdoing.
Toole later issued an order in November 2007 requiring the arbitrators to rule on the case, the information said. They did, according to the superseding indictment. The award was about $1 million. •