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Feds Up Amount They Say Fumo Defrauded -- $3.5M

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Aug 18, 2008 9:00 pm US/Eastern

Feds Up Amount They Say Fumo Defrauded -- $3.5M

PHILADELPHIA (AP) ―

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State Sen. Vincent Fumo and associates defrauded the Senate, a museum and nonprofit group of about $3.5 million, far more than the initial estimate, prosecutors said Monday in preparation for his trial next month.

Fumo defrauded the Senate of nearly $2 million, while he and others defrauded a museum and nonprofit group of $1.5 million more, federal prosecutors said in court documents filed Monday.

The total is far higher than $2 million estimate prosecutors used in the 2007 federal indictment against Fumo. The amount would prove relevant if the senator is convicted and ordered to pay restitution.

The 65-year-old Fumo, a millionaire banker and lawyer, is leaving the Senate after 30 years to focus on his corruption trial. Jury selection is set to start on Sept. 8, and the trial is expected to last three months or more.

The trial memorandum filed Monday by the U.S. attorney's office charges that Fumo spent "enormous" sums of public money on political campaigns, personal expenses and friends.

"In using Senate funds and the large staff he was provided, Fumo observed no distinction whatsoever between public and private tasks," Assistant U.S. Attorney John Pease wrote.

Fumo also rewarded friends and staff for their "blind loyalty" with excessive Senate salaries, prosecutors said.

The memo charges that:

Fumo's future son-in-law, Christian Marrone, spent much of his first 18 months on the Senate staff as the "project manager" overseeing renovations at Fumo's 33-room mansion near the Philadelphia Museum of Art; Fumo gave political strategist Howard Cain an $80,000-a-year
Senate contract although he did little state work; Fumo gave several friends "ghost" jobs on the Senate payroll, including a five-year, $30,000-a-year job for Mitchell Rubin "in return for no work at all."

Rubin is now the state's turnpike commissioner and married to Fumo co-defendant Ruth Arnao, who ran the South Philadelphia nonprofit, the Citizens Alliance for Better Neighborhoods. A turnpike commission spokesman did not immediately return a call Monday seeking comment from Rubin.

According to the trial memo, Fumo obtained $17 million from Peco Energy for Citizens Alliance to settle claims he had brought against the utility in both his Senate and individual capacity.

Cain is cooperating after pleading guilty plea this year to failing to pay $411,000 in taxes on $1.6 million in income from 1997 to 2006.

Marrone, in an e-mail, noted that he is not charged in the case.

A lawyer, he now works for the U.S. Department of Defense.

Fumo's defense lawyer, Dennis Cogan, did not immediately return a message left Monday by The Associated Press.

Co-defendant Leonard Luchko of Collingdale pleaded guilty this month to 29 obstruction-related counts for destroying e-mail evidence, while fellow computer technician Mark Eister of Camp Hill is scheduled for a plea hearing on Tuesday. Each worked for the state Senate, making more than $60,000 a year.