Saturday, March 14, 2009

FBI Probe Expands To Lackawanna County

According to the Legal Intelligencer the FBI probe appears to take on new proportions in the scope of its probe. Yesterday's Citizens Voice article shined a little light on the subject.

Federal investigators have subpoenaed at least one insurance company to testify about uninsured/underinsured motorist arbitrations in Luzerne and Lackawanna counties in Pennsylvania before a grand jury, The Legal Intelligencer has learned, indicating for the first time that the corruption probe has expanded geographically.

According to the Citizens' Voice article, Toole presided over two cases in 2005 -- including one that resulted in a $2 million settlement for the plaintiffs -- handled by John Nardone, even though he listed the Law Office of John Nardone as a source of income on financial disclosure forms for 2004 and 2005.

In speaking with several white-collar lawyers, it appears that if the Citizens' Voice article is accurate, the U.S. Attorney's Office for the Middle District of Pennsylvania may wind up investigating Toole for possible honest services fraud. There is no evidence that Nardone did anything wrong.

When asked, in light of the article, if federal investigators might pursue that angle, one white-collar attorney replied: "Absolutely. It appears to be a problem if he didn't disclose to counsel the financial relationship. It's not enough to disclose on the form. I think they [U.S. Attorney's Office] absolutely will be investigating it. They almost have to. They probably will interview opposing counsel."

Nardone did not return a call seeking comment. Neither did Toole. A call to an attorney rumored to be representing Toole was not returned. A call to Martin C. Carlson, the U.S. Attorney for the Middle District of Pennsylvania, was not returned.

While what is publicly known about the ongoing corruption probe in Luzerne County has been focused on the courthouse there, a subpoena obtained by The Legal Intelligencer is the first indication that federal officials are broadening their investigation to include neighboring Lackawanna County.

The subpoena requires officials from Harleysville Insurance to contact Assistant U.S. Attorney William S. Houser to "discuss compliance" and appear before a federal grand jury in Scranton, Pa., with a bevy of documents on March 24.

Read the particulars of the subpoena by clicking here.

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