Feds: Fumo embezzled over $3 million - Philadelphia News

PHILADELPHIA (AP) - August 18, 2008

A government trial memo filed Monday puts the fraud total at about $3.5 million, far higher than estimates in the 2007 federal indictment.

The amount would prove relevant if /*Vince Fumo*/ 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 fight the corruption charges. His trial is set for Sept. 8.

The memo says Fumo spent "enormous" sums of public money on political campaigns, personal expenses and friends - and made no distinction between public and private tasks.

Last week, computer technician /*Leonard Luchko*/ pleaded guilty to conspiring with Fumo to destroy e-mails and other evidence during an FBI extortion probe that eventually led to the lawmaker's indictment.

But Fumo - by having virtually all his pre-2005 e-mails destroyed - thwarted the FBI's investigation into millions in donations he sought from PECO Energy and Verizon for the nonprofit, prosecutors said.

"The conspiracy ... thwart(ed) the investigators' ability to determine whether federal crimes were committed in connection with those matters," prosecutors said in Luchko's plea memorandum.

Luchko pleaded guilty to all 29 conspiracy and obstruction-related counts he faced and will testify against Fumo and two remaining co-defendants. In exchange, prosecutors will ask a judge to sentence the 52-year-old to no more than two years in prison.

Through his plea, Luchko admits he was acting on the boss's orders when he destroyed years of e-mails on computers at Fumo's Senate offices and homes, and on his BlackBerry - in addition to those at a South Philadelphia nonprofit the senator allegedly controlled.

"He got no benefit, other than holding on to his job," Assistant U.S. Attorney John Pease said.

Luchko, a high school graduate who lives in suburban Collingdale, earned more than $60,000 in the state job.

The FBI was investigating whether Fumo tried to extort donations for the South Philadelphia nonprofit, Citizens Alliance for Better Neighborhoods.

Federal prosecutors charge that the millionaire senator misused the coffers of the state Senate, Citizens Alliance and the Independence Seaport Museum, on whose board he served, to fund political expenses and his lavish lifestyle. They say he also misappropriated their staffs to perform myriad tasks, from using a museum yacht for his vacation to using a retired state trooper to spy on his ex-wife.

The indictment also charges Fumo with obsessively ordering Luchko and others to destroy e-mails as the FBI investigation heated up.

"Boss is driving us ALL nuts with this FBI madness," Luchko wrote in a 2004 e-mail recovered by authorities.

A year earlier, Luchko had voiced frustration - but also his devotion - in an e-mail in which he discussed his round-the-clock responsibility for the senator.

"I would like to see their reaction when they are told to support the Senator his family, girlfriends and business associates along with the staff their friends and their kids 24 hours a day. ... PS I love my job and wouldn't trade it for any job in the Senate!" Luchko wrote.

The 65-year-old Fumo, an heir to a family bank fortune and a trained lawyer, beat two federal indictments early in his political career. He controlled 90 Senate jobs before he resigned as the ranking Democrat on the chamber's Appropriations Committee.

After 30 years in office, he decided not to run again in order to focus on the trial, which is expected to last several months. He is charged in 139 of the indictment's 141 counts.

He has also battled health problems in recent months, including a March heart attack and an apparent dizzy spell in June that caused him to collapse on the Senate floor.

Fumo's lawyer, Dennis Cogan, declined comment Monday on Luchko's plea, as did his Senate spokesman, Gary Tuma.

Neither Luchko nor his lawyer, James Schwartzman, commented as they left the courthouse.

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