Published July 27, 2009

The two former Luzerne County judges who have pleaded guilty to federal fraud charges effectively controlled the county for years and ruled through fear and intimidation, overseeing widespread corruption, including rampant case-fixing and payoffs.

That is the picture that has been painted through hundreds of interviews with dozens of sources and extensive research of court records and prior news accounts conducted by The Legal.

While the federal government’s case against former Judges Mark A. Ciavarella Jr. and Michael T. Conahan centers on their roles in taking money from attorney Robert Powell, the co-owner, and Robert Mericle, the builder, of a juvenile detention facility and the judges’ alleged abuse of the rights of juveniles sentenced to the facility, sources close to the investigation and inside Luzerne County say the scam some in the media have labeled "kids for cash" was just the tip of the iceberg and only the most blatant example of the corruption overseen by the two judges.

Luzerne County Commissioner Stephen A. Urban said that "when it came to people, budgets and personnel" he always thought Conahan and Ciavarella "got whatever they wanted, unjustly."

"They never had to justify anything," he said.

"I think some people felt like the courts controlled the county," Urban said. "I felt that way sometimes, too. I think people were afraid to challenge them."

The two judges ran the courthouse like a mafia family, according to several sources. And while The Legal has previously reported Conahan’s ties to admitted felons, including reputed mob boss William "Billy" D’Elia, multiple sources have said that Conahan’s links to organized crime go back decades. Sources have linked Conahan and his father to Joseph Scalleat and Michael "Hoppy" Carsia.

According to a former member of the now-defunct Pennsylvania Crime Commission, Scalleat and Carsia ran the mob in Hazleton, where the Conahans hailed from, for years. Both Scalleat and Carsia are mentioned in several of the commission’s reports.

James Kanavy, the former special agent-in-charge of the commission’s Northeast Region, said Scalleat was the "political guy" and set the big-picture, while Carsia ran day-to-day operations on the street. Scalleat, he said, was a member of the Philadelphia crime family, while Carsia was a member of the Bufalino crime family.

Although the two judges were seen as a team, nearly every source identified Conahan as the ultimate leader and mastermind of the corruption. Sources have been consistent in describing Conahan as having two distinct sides. One is warm, friendly, charming and hard-working and a gentlemen to lawyers appearing before him. The other side was constantly scheming, always looking to make money or to leverage favors, as well as vindictive, hell-bent on punishing those who challenged him and always keeping score.

Tom Pendergast, who said he has known Conahan since the first grade, said Conahan was "always on the make." He also said Conahan, with his business and political ties, was running the county long before he became president judge.

"He thought he could do what he could do and nobody could touch him," he said.

Pendergast said he once worked as a police officer in Hazleton and recounted hanging out in Conahan’s chambers frequently. Pendergast said he and Conahan started drifting apart in the 1980s and that he eventually moved out of the state.

Pendergast said that Conahan sometimes set up no-show jobs for him, although he never got paid because he felt uncomfortable with the situation.

"I knew there were strings attached to that," Pendergast said. "I wouldn’t want to be in his debt."

He said Conahan once told him he had a driver job for him. Pendergast said the job entailed him taking an envelope every day from a factory in Hazleton to a man waiting for him in Paterson, N.J., and that he had to meet the man at noon. Pendergast said the set-up made him nervous, so he was deliberately late. After that, he was never asked to take the envelope again.

Pendergast said that he was once involved in a car accident and the case wound up in front of Conahan. He said a pedestrian’s testimony supported his case, and Conahan ruled in his favor. However, Pendergast said that after the case was over, Conahan came up to him and said: "Look, I just did this for you." Pendergast said he told Conahan he didn’t need his help and that he didn’t want Conahan to think he owed him.

"That’s just the way he was," Pendergast said.

Over time Pendergast said he began distancing himself from Conahan because he was troubled by the people the judge was associating with. When asked if he believed those people had ties to criminal matters and/or organized crime, Pendergast replied, "That was the impression I got."

Multiple sources have said that federal investigators should look at every aspect of court business the two judges touched. Several sources have alleged the two judges didn’t get involved in anything that wouldn’t help them make money or allow them to trade favors.

Conahan’s attorney, Philip Gelso, said he had no comment for this story. Ciavarella’s attorney, Al Flora, declined to comment, citing the former judge’s pending sentencing.

The Legal has previously reported that federal investigators are looking at allegations of case-fixing in Luzerne County, particularly UM/UIM arbitration cases, as well as criminal case-fixing. Admitted felon Robert Kulick testified during a special hearing in early July that he and D’Elia met regularly with Conahan to fix cases. At that same hearing, a county security guard, Patty Benzi, testified that she ran envelopes from D’Elia and Kulick to Conahan, though she also testified that she had no knowledge of the contents of the envelopes. Sources have told The Legal that Benzi was not alone in running envelopes from D’Elia to Conahan. An investigation by The Legal has shown that parties with ties to the two judges often won favorable rulings when challenging their tax assessments, particularly the builder of juvenile detention facility PA Child Care, Mericle. In addition, as The Legal first reported in March, multiple sources have said the federal government is investigating whether Luzerne County Common Pleas Court Judge Michael Toole allegedly took a payment from Powell.

While the government has described in court papers how the judges allegedly shook down Powell in exchange for using PA Child Care, multiple sources have said Powell was hardly alone in paying.

While some have scoffed at the idea of Powell being the victim of a judicial shakedown, other lawyers not associated with Powell have said his case "shows the kind of pressure lawyers in that county were under to play ball," said one attorney who has battled unsuccessfully against some politically connected parties in Luzerne County.

When asked if it was reasonable to believe that his client was the only lawyer who was shaken down by the judges, Powell’s lawyer, Mark Sheppard of Montgomery McCracken Walker & Rhoads, declined to comment.

The case-fixing was done in conjunction at times with payoffs from lawyers, sources have said. The payoffs took the form of either cash payments or sometimes campaign contributions. Both Conahan and Ciavarella raised more than $280,000 for their retention campaigns, campaign contribution reports show, and, according to a Wilkes-Barre Times Leader article, at least $120,000 came to each of the judges from lawyers and law firms. Campaign finance reports show that Conahan and Ciavarella each spent more than half of the money in their coffers to pay off debts from their initial runs for the bench in 1993 and 1995, respectively. Judicial experts and election lawyers have described the amounts as unnecessary given the nature of retention campaigns and the size of the county.

When it came to cash payments, several sources have identified Conahan’s cousin, former court administrator William T. Sharkey Sr., as the one who would collect on behalf of the judges. Sources close to the investigation and those in Luzerne County have described Sharkey as "the bagman, the emissary, the messenger." Sharkey has pleaded guilty to embezzling more than $70,000 in court funds and is facing a maximum of 10 years in prison.

According to several sources, attorneys who were in on the case-fixing would approach Sharkey and seek his help in getting their cases in front of Conahan.

One rumor related to The Legal was that when an attorney got a big verdict or settlement, Sharkey would soon come to collect. For example, if an attorney secured $2 million in a case, the rumor went, Sharkey would demand $20,000.

"When he showed up at your door, you knew what he was there for," said another northeast Pennsylvania lawyer who had run afoul of the judges.

Sharkey’s attorney, Bruce Miller, could not be reached for comment at press time.

The number of lawyers who paid the judges is unknown. However, multiple sources have told The Legal they believe the payoffs were widespread and considered necessary by some lawyers in order to practice successfully in the county. Courthouse sources have expressed with confidence that at least a dozen lawyers have come under the scrutiny of federal investigators. Also, multiple sources have independently identified several attorneys by name as those who were allegedly involved in the scheme.

Pendergast said payoffs have been common knowledge in the county for some time and that the sentiment was always "that’s just Luzerne County."

"It’s been that way for years," he said. "These guys [Ciavarella and Conahan] just took it to a different level."

And though some sources have said the court’s payoff and case-fixing scheme was sometimes subtle in nature, West Chester, Pa., based attorney Samuel C. Stretton, who once served as a solicitor for former county controller Stephen L. Flood, said the county had become such a venue for corruption that talk of payoffs and case-fixing was also done in the open.

Flood, according to Stretton, attended a party after his election to the controller’s office in 2001 with other political types. Conahan was there, Stretton said Flood had told him, and so was at least one prominent attorney from the area.

At one point, Conahan saw the attorney, Stretton said, relaying Flood’s story.

"Conahan turned to the lawyer and said, ‘Hey … how about that $10,000 you owe me for the settlement last week,’" Stretton said Flood told him.

"That’s what got him suspicious about these guys," Stretton said. "He walked out and, after that, they became adversaries."

Another source said Flood related the same story.

Four years later, in 2005, while Flood was running a re-election campaign, he and Stretton were sitting together when the phone rang.

Flood answered.

A prominent attorney from a major firm was on the other line.

"Conahan just called and said if we give one penny to your campaign, we’ll never win another case in the county again," Stretton recalled the attorney telling Flood.

Flood lost his bid for re-election and was running for commissioner in 2007 when he suffered a stroke. He is now unable to talk. "We had heard from other people that it was going on," Stretton said. "That was the first direct proof we had."

Stretton, it should be noted, is not without his own experiences in Luzerne County.

He has represented and worked with Flood, former prothonotary Carolee Medico Olenginski and former Luzerne County Judge Ann H. Lokuta. Stretton said he sent both Flood and Lokuta to federal investigators. Lokuta and Olenginski have said they were singled out for retribution by the judges because they stood up to them.

"We knew what was going on," Stretton said. "We tried to stop it."

Around 2001, Stretton said, he and Olenginski began filing actions against the commissioners and raising concerns about the judges.

When Stretton didn’t show for a hearing he had before the judge, Ciavarella responded by holding Stretton in contempt of court and ordering him to be taken to jail. Stretton fought the ruling and was instead released on bail, pending appeal. Ciavarella was subsequently overturned, Stretton said.

A former client told Stretton he could speak with Ciavarella to have the issue resolved.

He told Stretton: "That’s the way we do things here. We work things out."

Stretton told the client not to do so, but he did anyway.

When the former client came back, he told Stretton he couldn’t "work it out." The client, Stretton recalled, used the word "unfixable" to describe his situation.

Stretton would not name his ex-client, citing attorney-client privilege.

Reporter Zack Needles contributed to this report.