Federal prosecutors have charged the Lackawanna County guardian ad litem with two counts of tax evasion and two counts of filing a false federal income-tax report.
A 13-page indictment filed in the U.S. District Court for the Middle District of Pennsylvania on Tuesday accused attorney Danielle Ross of reporting only the income she was making from a $38,000 contract with the county, alleging that she attempted to "defeat a large part of" the tax she owed in 2009 and 2010 when she reported her income on joint tax returns with her husband those years. The charging document alleges that the extra money came from Ross’ privately billing litigants on top of her salary, a practice that her contract allowed her to do.
According to the court papers, Ross had been working for the county as an independent contractor, for which the county provided her standard 1099 forms. Prosecutors have now alleged Ross knew how much she was billing private parties but that the county, which did not require her to report those numbers, did not.
According to the indictment, Ross "failed to report any income Ross received through checks and cash from private paying parties."
The Legal has previously reported that federal investigators have subpoenaed records from the Lackawanna County Family Court regarding the GAL program. Several sources have told The Legal that investigators are looking into how, and how much, Ross billed litigants.
The guardian program also was the subject of a 112-page report from the Administrative Office of Pennsylvania Courts. The AOPC suggested wide-ranging recommendations for reform, including reassessment of the entire GAL program along with better data collection and record-keeping.
It was unclear Tuesday whether Ross has been suspended following the federal charges. Ross did not return a call to her office or an email seeking comment.
Lackawanna County Court of Common Pleas Judge Patricia Corbett, who oversees the family court and was in charge of implementing the AOPC report, was not available for comment.
It was unclear from the indictment the extent to which Ross has been accused of lying on her tax returns, other than its alleging that she knew her taxable income was "substantially in excess of" the $50,985 she reported to the Internal Revenue Service for 2009 and the $27,076 she reported in 2010.
"In summary, from the beginning of her contracts with Lackawanna County through 2010, Ross willfully reported on her annual federal income-tax returns that her only income was what Lackawanna County and her former employer had paid her as indicated on 1099 forms and fraudulently and falsely did not report income, and willfully attempted to evade additional tax due and owing on income that she had received from private paying parties," said the indictment, signed by U.S. Attorney Peter J. Smith.
According to a court order dated January 24, 2008, Ross was initially set to receive $18,000 per year to serve as guardian ad litem. But five months later, on June 17, 2008, Ross received a revamped, $38,000 contract from the county that was signed by Lackawanna County Court Administrator Ronald Mackay. That contract said Ross may be "entitled to bill the county and private pay parties of the cases" and declared her the "sole" guardian ad litem.
In July 2009, the Lackawanna County Court of Common Pleas renewed Ross’ contract, again declaring her the county’s sole guardian and allowing her to privately bill above her salary at a rate of $50 per hour.
In its report on the program, the AOPC said it found "no evidence" Ross had been billing hundreds of thousands of dollars to litigants and that she "rarely" sent parties bills beyond a $300 retainer fee to each party that automatically comes with a guardian appointment.
However, Mike Stefanov, a litigant whose custody case drew a Ross appointment, has claimed in a federal lawsuit Ross billed his case more than $10,000 and that, at times, he accused her of double-billing him, as well.
Following the AOPC report, the county again renewed the contract last November, this time making it a $3,166-per-month contract, which is potentially worth about the same amount she was making from the county in 2009 and 2010 — $38,000 per year.
As the previous contract did, the new one authorized Ross to bill private parties — as well as the court in cases where private parties are unable to pay — at a rate of $50 per hour in addition to her monthly salary.
But unlike the previous contract, Ross’ new agreement expressly forbade her from engaging in private practice in Lackawanna County.