Pennsylvania State Senator, Aides Indicted on Fraud and Tax Charges

According to the indictment, which supersedes an indictment of two Fumo aides returned on June 27, 2006, Senator Fumo defrauded the Senate of the Commonwealth of Pennsylvania by repeatedly and pervasively using Senate employees and contractors to serve his personal and political needs, causing a loss to the Senate substantially in excess of $1 million.

The indictment also alleges that Senator Fumo defrauded a nonprofit, tax-exempt organization, Citizens Alliance for Better Neighborhoods, which he and his aides established to improve neighborhoods in the City and County of Philadelphia. The indictment charges that Fumo, along with defendant Ruth Arnao, the executive director of Citizens Alliance from 1999 to 2005, persistently used funds and employees of Citizens Alliance for their personal and political benefit. This fraud on Citizens Alliance caused a loss substantially in excess of $1 million.

Senator Fumo is also charged with defrauding the Independence Seaport Museum by using yachts and other property of the museum solely for his personal benefit. Senator Fumo sat on the board of directors for the Museum. The indictment alleges that this fraud caused a loss to the museum of more than $100,000. Additionally, according to the indictment, Senator Fumo, aided by Arnao and two Senate computer aides, Leonard P. Luchko and Mark C. Eister, engaged in extensive obstruction of justice, by endeavoring to destroy e- mails and other electronic evidence on Senate and Citizens Alliance computers once they learned of this federal investigation.

"In addition to using Senate employees for personal benefit, Senator Fumo is charged with abusing his authority to hire Senate contractors," said U.S. Attorney Meehan. "For example, he allegedly hired with Senate funds a private investigator, a former police officer, to follow his ex-wife and girlfriends on dates, and to dig up dirt on political rivals."

The specific charges in indictment are as follows:

Vincent J. Fumo, 63, of Philadelphia, is charged with two counts of conspiracy to commit mail and wire fraud; one count of conspiracy to defraud the United States; one count of conspiracy to obstruct justice; 60 counts of mail fraud; 41 counts of wire fraud; 32 counts of obstruction of justice; and two counts of aiding and assisting the filing of a false tax return.

Ruth Arnao is charged with one count of conspiracy to commit mail and wire fraud; one count of conspiracy to defraud the United States; one count of conspiracy to obstruct justice; 25 counts of mail fraud; eight counts of wire fraud; seven counts of obstruction of justice; and two counts of filing a false tax return.

Leonard P. Luchko is charged with one count of conspiracy to obstruct justice and 28 counts of obstruction of justice.

Mark C. Eister is charged with one count of conspiracy to obstruct justice and four counts of obstruction of justice.

This case was investigated by the FBI and the Internal Revenue Service, Criminal Investigation Division. It has been assigned for prosecution to Assistant U.S. Attorneys John J. Pease and Robert A. Zauzmer.