Citizen's Bank withdrawing from Norristown

Citizen's Bank will not renew its lease in Norristown, which is up in February. The massive building on Lafayette Street next to the transportation center can't be more than 15 years old. This is indeed a blow for The county seat. The Scoop has heard the Montgomery County Economic Development Corporation is in a panic to find a new tenant.

Cop gone bad

The Scoop has heard the arrest of a Conshohocken police officer is imminent. Seems one of the borough men in blue has been taking quarters from the local parking meters without permission, and subsidizing quite the lifestyle while doing so. Said cop gone bad could be behind bars soon.

Foot in the door

Let's take a moment to add up the score. Montco commish Jim Matthews told a local reporter that he had been meeting with cohort and colleague commish Joe Hoeffel for the past two years outside the public eye. So, if the fine for violating the Sunshine law is $100 that cranks up the tab from a possible $800 fine based on the reporter saying they'd been meeting for the past two months to possibly more than $5,000 if you calculate a $100 for each offense. Still chump change to these guys so what's the real reason the county district attorney is investigating? The Scoop has it on good authority that it is to get her proverbial foot in the door to drill a little deeper into pay to play allegations against Matthews.

Matthews job in jeopardy?

One day after a story ran in the local paper quoting Montgomery County Commissioners' Chairman Jim Matthews that county jobs were in jeopardy it looks as if Matthews cushy patronage position in the Corbett administration may be in jeopardy. The Scoop would really like to know what Gov. Elect Corbett was thinking offering Matthews a job in the first place.

Montco budget blues

Let's see, the county is going to come up short, but no one wants to raise taxes, except of course Jim Matthews, who is the poster child for lame ducks everywhere, leaving his partner Joe Hoeffel, nearly as lame as Jim, and Bruce Castor, to either take a scapel to the budget or risk their chance at re-election. The Scoop doesn't think Hoeffel has the proverbial snow ball's chance of hanging on to his seat, and if Castor doesn't find just the right running mate the Dems will take over the county legitimately in the next election, especially if state Rep. Mike Gerber decides he's had enough of Harrisburg. A lot going on as we wind down 2010. What do you know that The Scoop doesn't?

Matthews goes begging

The Scoop heard Montgomery County Commissioner's Chairman Jim Matthews drove all the way across Pennsylvania on Election Day to stand by Gov. Elect Tom Corbett, and, more accurately, to beg for a job in Corbett's new administration. The only possible way Corbett gives him a job is to get him out of Montco. Our win, the state's loss.

The jury is grand after all

An earlier post had the grand jury investigation into the life and times of Montgomery County Commissioner Jim Matthews moved into the big city. That just might not be the case, according to a source. We'll have to play wait and see on this one. One source sent us into the city, another is bringing us back out to the burbs. Either way, The Scoop is just glad to know there is still an investigation.

To tax or not to tax

What's a Dem to do? Montgomery County Commissioner Jim Matthews is calling for a tax increase, but his partner in politics, Joe Hoeffel has been oddly quiet on the issue. Here's the deal. Joe has a snow ball's chance in hell of getting re-elected to begin with, but if he starts backing Jim's call for a tax increase he can kiss the snow ball goodbye. So, what do you say, Joe?

County playing fast and loose with your tax dollars

The county borrowed money to pay for the expansion on the prison. So what happened to the money? Seems the county treasurer doesn't know, but our county commissioners aren't sweating it. Of course, they never do seem to worry about your money. We're talking about $25 million that was allegedly set aside for the prison. Oh well, they'll just have to raise taxes to take care of that bill, too.

Dems to dump Hoeffel?

The Scoop has it from a good source that Hoeffel won't be their man when endorsement time rolls around. Now, where does that leave the county Dems? They could bring back Ruth Damsker, but what if she somehow defeats Stewart Greenleaf? Your right, that's not gonna happen. So, who can they put up, Frank Custer? What about Matt Bradford? The Scoop is at a loss, here. Who do you think?

The jury is out

The Scoop has it on good authority that the Montgomery County grand jury will not be looking into the alleged illegal dealings of Montgomery County Commissioner Jim Matthews. Seems it's just too much of a political hot potato so the district attorney, Risa Ferman, has asked the feds to step in. Either way, The Scoop will be shocked if Matthews isn't hauled into a courtroom near you some day soon.

Read 'em and weep, feds hand down indictments against Skippack Township Supervisor and his former business partner

This just in from The Scoop


IN THE UNITED STATES DISTRICT COURT
FOR THE EASTERN DISTRICT OF PENNSYLVANIA
UNITED STATES OF AMERICA
v.
DAVID F. KANE
MARK G. MARINO
JAMIE E. E. BAUGHER
:
:
:
:
:
:
:
:
CRIMINAL NO. 10-182
DATE FILED: September 14, 2010
VIOLATIONS:
18 U.S.C. § 371 (conspiracy – 1 count)
26 U.S.C. § 7206(1) (filing a false income
tax return - 8 counts)
26 U.S.C. § 7201 (tax evasion - 3 counts)
18 U.S.C. § 1014 (false statement to
obtain a loan – 1 count)
18 U.S.C. § 1344 (bank fraud - 1 count)
18 U.S.C. § 2 (aiding and abetting)
Notice of forfeiture
S E C O N D S U P E R S E D I N G I N D I C T M E N T
COUNT ONE
At all times relevant to this second superseding indictment:
1. Defendant DAVID F. KANE owned and operated a real estate
development business in Montgomery County, Pennsylvania, called Kane Core, Inc. (“KCI”).
Also, between approximately January 2006 and May 2008, defendant KANE was employed as
the elected Chairman of the Limerick Township Board of Supervisors, which was the legislative
body that governed Limerick Township, Pennsylvania. As a member of the Board of
Supervisors, defendant KANE voted on various matters, including increases in township taxes
and fees and approval for the development of real estate. Prior to establishing KCI, defendant
KANE owned and operated Kane Construction. Except for a federal tax return filed for 2004,
between at least 1999 and the date of this superseding indictment, defendant KANE did not file a
timely personal federal income tax return or pay federal income taxes due.
2. Defendant MARK G. MARINO was defendant DAVID F. KANE’s
business partner in KCI and an elected member of the Skippack Township Board of Supervisors.
Defendant MARINO also owned and operated other various businesses, including a landscaping
business and Marino Holdings, Inc.
3. Defendant JAMIE E.E. BAUGHER was employed by defendants DAVID
F. KANE and MARK G. MARINO at KCI. His duties at KCI included finding real estate for
development and property owners needing assistance in obtaining approval for development. At
the direction of defendant DAVID F. KANE, defendant BAUGHER established Jascu LLC for
the purpose of receiving funds from KCI and evading federal taxes on payments to him from
KCI.
4. John D. Kane, charged elsewhere, was defendant DAVID F. KANE’s
brother and assisted defendant KANE in concealing defendant KANE’S assets from the Internal
Revenue Service (“IRS”). Among other things, Kane agreed to title KCI and defendant KANE’s
residences in his name to prevent the IRS from seizing them in payment of past-due federal
taxes, interest, and penalties owed by defendant KANE.
5. Gregory M. Kane, charged elsewhere, was defendant DAVID F. KANE’s
father. He was employed by defendants KANE and MARK G. MARINO at KCI. His duties at
KCI included locating real estate for development and property owners needing assistance in
obtaining approval for development. At the direction of defendant KANE, Gregory M. Kane
established Sunrise Enterprises LLC for the purpose of receiving funds from KCI and evading
federal taxes on payments to him from KCI.
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THE CONSPIRACY
6. From at least in or about 2002 and continuing through on or about the date
of this second superseding indictment, in the Eastern District of Pennsylvania and elsewhere,
defendants
DAVID F. KANE,
MARK G. MARINO,
and
JAMIE E.E. BAUGHER
conspired and agreed, with each other, and with John D. Kane and Gregory M. Kane, and others
known and unknown to the grand jury, to defraud the United States by willfully impeding,
impairing, obstructing, and defeating the lawful governmental functions of the IRS in the
ascertainment, computation, assessment, and collection of revenue, that is, federal income taxes.
MANNER AND MEANS
It was part of the conspiracy that:
7. Defendant DAVID F. KANE did not timely file tax returns or pay federal
taxes, interest, and penalties owed by him.
8. Although defendants DAVID F. KANE and MARK G. MARINO owned
and operated KCI, they falsely stated that KCI was owned by John D. Kane and arranged that
KCI be titled in John D. Kane’s name.
9. Defendant DAVID F. KANE also titled his residence in John D. Kane’s
name.
10. Defendants DAVID F. KANE and MARK G. MARINO falsely stated that
KCI employees were “independent contractors” and not subject to federal employment taxes.
11. At the direction of defendant DAVID F. KANE, defendant JAMIE E.E.
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BAUGHER, Gregory M. Kane, and S.H., a person known to the grand jury, set up corporations
to use to receive income from KCI so that they could conceal this income from the IRS.
Defendant KANE also set up Celtic Development LLC, Minister Creek LLC, and other
corporations for the same purpose.
12. Defendant DAVID F. KANE and John D. Kane made false statements to
various title agencies and lenders to conceal defendant KANE’s assets from the IRS.
13. Defendants DAVID F. KANE and MARK G. MARINO paid their
personal expenses directly out of corporate funds and did not report these payments to the IRS.
These included payments for housekeepers, a strip club, sports tickets, and vacations.
14. Defendants DAVID F. KANE and MARK G. MARINO diverted proceeds
from KCI real estate transactions to personal bank accounts they controlled and then failed to
report their earnings to the IRS.
OVERT ACTS
In furtherance of the conspiracy, defendants DAVID F. KANE, MARK G.
MARINO, and JAMIE E.E. BAUGHER, and John D. Kane and Gregory M. Kane, and others
known and unknown to the grand jury, committed the following overt acts, among others, in the
Eastern District of Pennsylvania and elsewhere:
1. In or about 2002, defendant DAVID F. KANE purchased a residence on
Bragg Road in Schwencksville, Pennsylvania, and falsely titled it in the name of John D. Kane.
Defendant KANE and John D. Kane agreed that defendant KANE would pay the mortgage on
the property by funneling payments to John D. Kane who would then write a check to the
mortgage company. John D. Kane failed to report the payments from defendant KANE on his
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tax returns, but took deductions for mortgage interest on those same returns.
2. In or about November 2002, defendant DAVID F. KANE and John D.
Kane arranged for John D. Kane’s long-time tax preparer to incorporate KCI in the name of John
D. Kane because defendant KANE had not timely filed tax returns or paid federal taxes and
feared the IRS would seize KCI or its assets.
3. On or about November 25, 2002, defendant DAVID F. KANE and John
D. Kane caused KCI to be incorporated in Pennsylvania.
4. On or about August 18, 2004, at the direction of defendant DAVID F.
KANE, Gregory M. Kane caused Sunrise Enterprises LLC to be incorporated in Pennsylvania.
5. On or about August 18, 2004, defendant DAVID F. KANE caused Celtic
Development LLC to be incorporated in Pennsylvania.
6. On or about May 25, 2005, defendant JAMIE E.E. BAUGHER received a
check in the amount of $24,000 representing earnings from his work at KCI which he did not
report on his 2005 federal tax return.
7. On or about May 26, 2005, Gregory M. Kane received a check in the
amount of $100,000 made out to Sunrise Enterprises LLC representing earnings from his work at
KCI which he did not report to the IRS.
8. On or about November 23, 2005, Gregory M. Kane received a check in
the amount of $36,960 representing earnings from his work at KCI which he did not report to the
IRS.
9. On or about May 2005, defendant DAVID F. KANE filed a false federal
income tax return for the year 2004 which falsely stated that his adjusted gross income was
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$82,295 and failed to report more than $231,000 in additional income.
10. On or about April 17, 2006, defendant JAMIE E.E. BAUGHER caused a
$42,189 check representing earnings from his work at KCI to be made out to Jascu LLC which
he did not report on his 2006 tax return.
11. On or about April 17, 2006, and November 3, 2006, Gregory M. Kane
received checks in the amount of $152,264 and $19,227 representing earnings from his work at
KCI which were made out to Sunrise Enterprises LLC and which he did not report to the IRS.
12. On or about May 16, 2006, defendant DAVID F. KANE caused Hiett
Development, LLC to be incorporated in Pennsylvania.
13. In or about late-May 2006, defendant DAVID F. KANE substantially
stopped using his long-time personal bank account at Harleysville National Bank. This was after
the IRS had levied this account on or about May 17, 2006 and seized approximately $8,000.
14. On or about July 6, 2006, defendant DAVID F. KANE opened a bank
account in the name of Celtic Development LLC at Commerce Bank, the same day that the IRS
filed at least one lien against him.
15. On numerous dates between on or about January 23, 2005, and on or about
August 22, 2006, defendant DAVID F. KANE caused a total of approximately $118,302 in
proceeds of KCI real estate transactions to be transferred from the KCI bank account to his
personal bank account at Harleysville National Bank, and failed to report the income from these
proceeds to the IRS.
16. On or about November 30, 2006, defendant DAVID F. KANE caused
approximately $59,059 in proceeds from a KCI real estate transaction to be deposited to his
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Celtic Development account at Commerce Bank and then failed to report the income from those
proceeds to the IRS.
17. On March 28, 2007, defendant JAMIE E.E. BAUGHER caused a
$112,000 check representing earnings from his work at KCI to be made out to Jamie Baugher
which he did not report to the IRS.
18. On March 28, 2007, Gregory M. Kane caused a $150,000 check
representing earnings from his work at KCI to be made out to Sunrise Enterprises LLC which he
did not report to the IRS.
19. On or about March 28, 2007, defendants DAVID F. KANE and MARK G.
MARINO caused a title agency responsible for distributing the proceeds of a KCI real estate
transaction to make payments towards defendant KANE’s personal expenses directly out of the
settlement proceeds. These payments expenses included $78,900 to pay off a line of credit
defendant KANE used for personal expenses, $50,000 which was deposited with another
management company which defendant KANE later directed to be used to pay personal
expenses, and an $18,000 payment to defendant KANE’s ex-wife as part of their divorce
settlement. Defendants KANE and MARINO also caused proceeds of the KCI real estate
transactions to be deposited to personal bank accounts they controlled and then failed to report
their entire earnings to the IRS. These included deposits of $258,151 and $190,000 into
defendant MARINO’s Marino Holdings account and $71,100 into defendant KANE’s Celtic
Development account.
20. On or about December 17, 2007, defendants DAVID F. KANE and
MARK G. MARINO caused a title agency responsible for distributing the proceeds of a KCI real
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estate transaction to make payments towards their personal expenses directly out of the
settlement proceeds. These payments included a $19,000 down payment for a boat owned by
defendants KANE and MARINO, a $25,000 payment to defendant KANE’s ex-wife as part of
their divorce settlement, $38,881 which was later deposited with the management company and
used to pay defendant KANE’s personal expenses, and $75,000 to pay off a line of credit
defendant KANE used for personal expenses. Defendants KANE and MARINO also caused
proceeds of the KCI real estate transactions to be deposited to personal bank accounts they
controlled and then failed to report their entire earnings to the IRS. These included deposits of
$152,460 into defendant MARINO’s Marino Holdings account, $10,580 into defendant
MARINO’s Marino Landscape and Design account, and $9,000 into defendant KANE’s Celtic
Development account.
21. On or about July 25, 2008, at the direction of defendant DAVID F.
KANE, John D. Kane falsely told a title agent who was conducting the closing of defendant
KANE’s residence on Bragg Road that defendant KANE had no interest in the residence. As a
result of this false statement by defendant KANE and John D. Kane, the title agent issued a
check for approximately $150,000 representing the proceeds of the sale of defendant KANE’s
residence to John D. Kane even though these funds should have been paid to the IRS.
22. In or about October 2009, John D. Kane falsely told D.A.M., a witness
before the federal grand jury investigating the coconspirators’ conduct, that he was the owner of
defendant DAVID F. KANE’s residence on Bragg Road.
All in violation of Title 18, United States Code, Section 371.
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COUNT TWO
THE GRAND JURY FURTHER CHARGES THAT:
On or about June 9, 2005, in the Eastern District of Pennsylvania, defendant
DAVID F. KANE
willfully made and subscribed a United States income tax return, Form 1040, for the calendar
year 2004, which was verified by a written declaration that it was made under the penalty of
perjury and filed with the Director, Internal Revenue Service Center, which defendant KANE
did not believe to be true and correct as to every material matter, in that the return reported
adjusted gross income of $82,295, when in fact, as KANE knew, he had received additional
taxable income of approximately $370,638.
In violation of Title 26, United States Code, Section 7206(1).
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COUNT THREE
THE GRAND JURY FURTHER CHARGES THAT:
On or about September 17, 2004, in the Eastern District of Pennsylvania,
defendant
MARK G. MARINO
willfully made and subscribed a United States income tax return, Form 1040, for the calendar
year 2003, which was verified by a written declaration that it was made under the penalty of
perjury and filed with the Director, Internal Revenue Service Center, which defendant MARINO
did not believe to be true and correct as to every material matter, in that the return reported
adjusted gross income of -$14,644, when in fact, as MARINO knew, he had received additional
taxable income of approximately $56,386.
In violation of Title 26, United States Code, Section 7206(1).
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COUNT FOUR
THE GRAND JURY FURTHER CHARGES THAT:
On or about August 16, 2005, in the Eastern District of Pennsylvania, defendant
MARK G. MARINO
willfully made and subscribed a United States income tax return, Form 1040, for the calendar
year 2004, which was verified by a written declaration that it was made under the penalty of
perjury and filed with the Director, Internal Revenue Service Center, which defendant MARINO
did not believe to be true and correct as to every material matter, in that the return reported
adjusted gross income of $50,841, when in fact, as MARINO knew, he had received additional
taxable income of approximately $129,981.
In violation of Title 26, United States Code, Section 7206(1).
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COUNT FIVE
THE GRAND JURY FURTHER CHARGES THAT:
On or about October 15, 2006, in the Eastern District of Pennsylvania, defendant
MARK G. MARINO
willfully made and subscribed a United States income tax return, Form 1040, for the calendar
year 2005, which was verified by a written declaration that it was made under the penalty of
perjury and filed with the Director, Internal Revenue Service Center, which defendant MARINO
did not believe to be true and correct as to every material matter, in that the return reported
adjusted gross income of $256,826, when in fact, as MARINO knew, he had received additional
taxable income of approximately $83,531.
In violation of Title 26, United States Code, Section 7206(1).
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COUNT SIX
THE GRAND JURY FURTHER CHARGES THAT:
On or about March 10, 2008, in the Eastern District of Pennsylvania, defendant
MARK G. MARINO
willfully made and subscribed a United States income tax return, Form 1040, for the calendar
year 2006, which was verified by a written declaration that it was made under the penalty of
perjury and filed with the Director, Internal Revenue Service Center, which defendant MARINO
did not believe to be true and correct as to every material matter, in that the return reported
adjusted gross income of $191,025, when in fact, as MARINO knew, he had received additional
taxable income of approximately $6,024.
In violation of Title 26, United States Code, Section 7206(1).
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COUNT SEVEN
THE GRAND JURY FURTHER CHARGES THAT:
On or about November 26, 2008, in the Eastern District of Pennsylvania,
defendant
MARK G. MARINO
willfully made and subscribed a United States income tax return, Form 1040, for the calendar
year 2007, which was verified by a written declaration that it was made under the penalty of
perjury and filed with the Director, Internal Revenue Service Center, which defendant MARINO
did not believe to be true and correct as to every material matter, in that the return reported
adjusted gross income of $261,079, when in fact, as MARINO knew, he had received additional
taxable income of approximately $277,151.
In violation of Title 26, United States Code, Section 7206(1).
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COUNT EIGHT
THE GRAND JURY FURTHER CHARGES THAT:
On or about June 28, 2006, in the Eastern District of Pennsylvania, defendant
JAMIE E.E. BAUGHER
willfully made and subscribed a United States income tax return, Form 1040, for the calendar
year 2005, which was verified by a written declaration that it was made under the penalty of
perjury and filed with the Director, Internal Revenue Service Center, which defendant
BAUGHER did not believe to be true and correct as to every material matter, in that the return
reported adjusted gross income of $27,666, when in fact, as BAUGHER knew, he had received
additional taxable income which included, but was not limited to, $24,000 from his employer.
In violation of Title 26, United States Code, Section 7206(1)
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COUNT NINE
THE GRAND JURY FURTHER CHARGES THAT:
On or about September 20, 2007, in the Eastern District of Pennsylvania,
defendant
JAMIE E.E. BAUGHER
willfully made and subscribed a United States income tax return, Form 1040, for the calendar
year 2006, which was verified by a written declaration that it was made under the penalty of
perjury and filed with the Director, Internal Revenue Service Center, which defendant
BAUGHER did not believe to be true and correct as to every material matter, in that the return
reported adjusted gross income of $19,886, when in fact, as BAUGHER knew, he had received
additional taxable income which included, but was not limited to, $42,189 from his employer.
In violation of Title 26, United States Code, Section 7206(1)
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COUNT TEN
THE GRAND JURY FURTHER CHARGES THAT:
1. Paragraphs 1 through 5 of Count One are incorporated here.
2. Between in or about at least 1999 and the date of this second superseding
indictment, in the Eastern District of Pennsylvania, and elsewhere, defendant
DAVID F. KANE
willfully engaged in a continuing attempt to evade and defeat a large part of the tax due and
owing by him and his spouse to the United States of America for the calendar years 1999
through 2003, including taxes, penalties, and interest due under an IRS assessment in the amount
of $601, 310 made against defendant KANE on or about July 6, 2006, through various means.
3. As part of this attempt to evade federal income taxes, defendant DAVID
F. KANE did the following:
(a) he failed to file timely federal income tax returns since at least 1999;
(b) he filed a false and untimely 2004 federal income tax return which failed
to report more than $230,000 in income;
(c) he fraudulently titled his residences and KCI in the name of his brother,
John D. Kane;
(d) he established an escrow account at a title agency into which he deposited
income from real estate closings and directed the title agency to pay his personal expenses;
(e) he established Celtic Development, LLC, opened a bank account in that
name, and directed title companies to pay his earnings to Celtic Development LLC, after which
he failed to report the earnings as income;
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(f) he caused the wire transfer of his KCI earnings to his personal bank
account and failed to report the earnings; and
(g) he failed to report as income thousands of dollars in personal expenses
paid from corporate funds.
In violation of Title 26, United States Code, Section 7201.
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COUNT ELEVEN
THE GRAND JURY FURTHER CHARGES THAT:
1. Paragraphs 1 through 5 of Count One are incorporated here.
2. During 2007, in the Eastern District of Pennsylvania, and elsewhere,
defendant
JAMIE E.E. BAUGHER
willfully engaged in an attempt to evade and defeat a large part of the tax due and owing by him
and his spouse to the United States of America for the calendar year 2007, through various
means.
3. As part of this attempt to evade federal income taxes, defendant JAMIE
E.E. BAUGHER did the following:
(a) he established Jascu LLC for the purpose of receiving commission checks
he earned from the proceeds of KCI real estate sales;
(b) he deposited to his Jascu LLC account a $112,000 commission check
made payable to him from the proceeds of the sale of KCI real estate, and
(c) he failed to file a 2007 federal income tax return and thus failed to report
to the IRS his receipt of the $112,000 commission check from the sale of KCI real estate.
In violation of Title 26, United States Code, Section 7201.
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COUNT TWELVE
THE GRAND JURY FURTHER CHARGES THAT:
1. Paragraphs 1 through 5 of Count One are incorporated here.
2. During 2007, in the Eastern District of Pennsylvania, and elsewhere,
defendant
MARK G. MARINO
willfully engaged in a continuing attempt to evade and defeat a large part of the tax due and
owing by him to the United States of America for the calendar year 2007, through various
means.
3. As part of this attempt to evade federal income taxes, defendant MARK
G. MARINO did the following:
(a) he caused approximately $258,151 in proceeds from a KCI real estate sale
to be falsely identified as “loan repayment’ and paid to him;
(b) he caused approximately $19,000 in proceeds in proceeds from a KCI real
estate sale to be diverted to purchase a boat that he owned with David F. Kane; and
(c) he caused other proceeds from KCI real estate sales during 2007 to be
deposited to his Marino Holdings and Marino Landscape and Design accounts, then failed to
report his entire income during 2007 to the IRS.
In violation of Title 26, United States Code, Section 7201.
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COUNT THIRTEEN
THE GRAND JURY FURTHER CHARGES THAT:
At all times material to this second superseding indictment:
1. Harleysville National Bank (“HNB”) was a financial institution located in
Harleysville, Pennsylvania, the deposits of which were insured by the Federal Deposit Insurance
Corporation.
2. On or about July 18, 2005, in the Eastern District of Pennsylvania, and
elsewhere, defendants
DAVID F. KANE
knowingly made and caused to be made to HNB a false statement for the purpose of influencing
the actions of HNB upon a loan, that is a $750,000 business loan for his business, KCI, in that
defendant KANE caused to be submitted to HNB a false loan application in which defendant
KANE falsely claimed that he had no “unpaid income taxes” when, in fact, he was aware that he
had not filed income tax returns or paid federal income taxes during 1999 through 2003 and that
he owed significant unpaid taxes to the IRS.
In violation of Title 18, United States Code, Section 1014.
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COUNT FOURTEEN
THE GRAND JURY FURTHER CHARGES THAT:
At all times material to this second superseding indictment:
1. Paragraphs 1 through 5 of Count One and paragraph 1 of Count Twelve
are incorporated here.
2. Between in or about 2002 and April 2008, in the Eastern District of
Pennsylvania, and elsewhere, defendant
DAVID F. KANE
knowingly executed, and attempted to execute, and aided and abetted the execution and
attempted execution of a scheme to defraud HNB, and to obtain monies owned by and under the
care, custody, and control of that bank by means of false and fraudulent pretenses,
representations, and promises.
THE SCHEME
3. Between approximately 2002 and 2005, defendant DAVID F. KANE and
Mark G. Marino applied for more than $2.5 million in loans from HNB to use to operate KCI
and to purchase real estate for development.
4. Because defendant DAVID F. KANE had poor credit and did not want to
provide financial information to HNB for fear that the IRS or others may obtain it and use it to
seek payment of amounts owed to the IRS and other creditors, defendant KANE enlisted John D.
Kane to assist him in submitting false loan applications to HNB. Specifically, defendant KANE
and John D. Kane falsely claimed to HNB that John D. Kane was the “majority owner” of and
acted as a “consultant” to KCI when, in fact, John D. Kane did not own KCI, had no role in its
22
operation, and defendant KANE and Mark G. Marino were the true owners. By using John D.
Kane as a straw owner of KCI, defendant KANE concealed his true financial condition from
HNB, including the fact that he had hundreds of thousands of dollars in unpaid debts, including
taxes, interest, and penalties due to the IRS.
5. Defendant DAVID F. KANE also submitted a false loan application and
financial statement to HNB which did not disclose all of his debts, including his debt owed to the
IRS.
6. As a result of the scheme to defraud, including the false statements
described above, defendant DAVID F. KANE obtained more than $2.5 million in fraudulent
loans from HNB.
In violation of Title 18, United States Code, Sections 1344 and 2.
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NOTICE OF FORFEITURE
THE UNITED STATES ATTORNEY FURTHER CHARGES THAT:
1. As a result of the violations of Title 18, United States Code, Sections 1014
and 1344 set forth in this second superseding indictment, defendant
DAVID F. KANE
shall forfeit to the United States of America any property constituting, or derived from, proceeds
obtained directly or indirectly from the commission of such offenses, including at least $2.5
million.
2. If any of the property described above, as a result of any actor omission of
the defendant:
a. cannot be located upon the exercise of due diligence;
b. has been transferred to, sold to, or deposited with a third party;
c. has been placed beyond the jurisdiction of this Court;
d. has been substantially diminished in value; or
e. has been commingled with other property which cannot be divided
without difficulty;
it is the intention of the United States, pursuant to 21 U.S.C. § 853(p), to seek forfeiture of any
other property of the defendant up to the value of the property subject to forfeiture.
24
All pursuant to Title 18, United States Code, Section 981(a)(1)(C), 28 U.S.C.
§ 2461, and United States Code, Section 853.
A TRUE BILL:
FOREPERSON
__________________________
ZANE DAVID MEMEGER
United States Attorney
25

The emperor has new clothes

Hang around the Montgomery County courthouse long enough and you'll see just about everything.
Like today, for instance.
Commissioner Jim Matthews drives up in a shiny new Lincoln.
The Scoop is pretty sure if that's a step up for the emperor.
So, the question becomes, will it show up on his campaign finance report?

Too quiet in Montco

No one is going in and out of the grand jury courtroom. How is that possible? We have a county commissioner who as said he spends campaign money any way he likes because it's his money, and we have it on good authority that the grand jury is looking into his shenanigans, and yet there isn't any action? The Scoop knows there's something there, but whether the DA is willing to pursue is another issue entirely. She just pushed the Mastronardo case off to the feds, and we know there's a history there with the former DA, so it isn't much of a stretch to think she would push the Matthews case along as well.

Unethical, maybe. Criminal, apparently not.

The Scoop has it on good authority that criminal charges will not be filed against Lower Providence Supervisors Colleen Eckman and running mate Don Thomas. Both are embroiled in a civil suit against the JP Mascaro company over campaign literature distributed by the duo stating that Mascaro employees had contributed heavily to their opponents, Jim Dougherty and Craig Dininny. Apparently the district attorney's office has decided there isn't enough there for criminal charges.

Summer not so sizzling

Since when do we put everything on hold just because the thermometer goes over 90 degrees for a few weeks?
The Scoop has it on good authority that the grand jury is meeting, but only about once in the past month.
Something's also going to have to give pretty soon with the commissioners. We're guessing Bruce Castor is going to have to name a running mate fairly soon, that is, unless he just simply isn't concerned with either Jim Matthews or Joe Hoeffel, and considering how many times they've each shot themselves in the foot, he might not have to be. But seriously, summer is no reason to not sizzle. What do you say?
Residents need to understand that summer is the time when crafty politicians like to slide things through. How else can you explain a county that's crying poor mouth having an extra $3 million to give to Audubon Society?

Townships doing the two-step

The proposal to merge townships across the state sure has a lot of local officials dancing. It's no wonder they're running scared. Think about all the duplication of services we receive within a 10-mile radius, or even a 20-mile radius. The Scoop thinks it's long overdue. How about we start a petition to force the legislation through? Sign up here and we'll personally see it delivered.

We the undersigned believe local townships within a 20-mile radius should be merged, thus eliminating the need for multiple managers, police chiefs and department heads across the board.

The Joe Hoeffel Bop

The Scoop has it on fairly good authority that Joe Hoeffel will not be the endorsed democratic candidate for county commissioner next year. While that makes perfectly good sense considering he aligned himself with Republican Jim Matthews in a last minute power grab, we're left scratching our scoops as to who they'll actually put up against Bruce Castor.

Is the DRPA "Lawless"?

While you might not think the goings on at the Delaware River Port Authority have much to do with Montgomery County, here's the real scoop. That E-Z Pass transponder port authority public safety chief Mike Joyce gave to one of his daughters to use was John Lawless's transponder. That's right the same John Lawless who once held the 150th Dist. legislative seat before being gerrymandered out back on '01. If you haven't heard his name in a while that's because he was offered a cushy job at the authority shortly after losing the election.

Is the jury really 'grand'?

Word on the street is the newly convened grand jury in Montgomery County has its hands full. There are a lot of comings and goings on Wednesdays at the courthouse. The possibility of illegal goings on with our very own county commissioner James Matthews and all the possible angles involving 770 Sandy St. in Norristown should keep a full battery of lawyers busy for quite a while.

Who's the boss?

That should really be in the past tense, but it was too good of a title to pass up.

Who was the boss is the question when it comes to Norristown's bungling of the inspection process for the condominium complex, which ultimately lead to more than a half dozen homeowners being kicked to the curb along with more than a dozen renters. The renters can simply rent somewhere else, but what about the homeowners? They're paying a mortgage on a property they can't live in, or rent out. So, I'll ask again? Who was the boss? Word out of Norristown is Jayne Musoyne was in charge of the planning department and also the building department at the time because Lynn Bixler had been fired. When will Norristown officials hold someone accountable?

Score one for accuracy

Seems The Scoop has an article of validation on the Jill Govberg scoop. Check out this story in The Times Herald, which really doesn't cover Lower Merion, but hey, looks like they were on it anyway.


http://bit.ly/aSM2w3

What's more American than a good old fashioned law suit?

See previous post for the scoop, but it's true, a law suit was filed against Montco commissioner hopefull Jill Govberg. Seems Govberg has in her possession the Lower Merion Republican Committee donor and e-mail lists and they want them back. Happy Fourth of July to one and all!

Who will GOP put up to run for county commish?

We're thinking it simply can't be Jill Govberg, even though we heard she was going to be Bruce Castor's running mate. That is, if the county republican committee is going to follow through with a suit against Govberg, forcing her to give up the party e-mail list and list of contributors. But then again, that leaves Matthews....and we're thinking he probably couldn't get elected dog catcher. What do you think? Ponder it while you're enjoying your July 4 weekend. The Scoop will be back on the trail next week.

Candid Camera

Did you like the West Conshy post from yesterday? If you did you're going to love today's. Seems a council member approached a member of the municipal authority, where we told you all of the money was being embezzled, and told them to resign. We'll the municipal authority member didn't like the idea at all and let the council member know it in no uncertain terms. The council member became a little concerned for his safety and decided he needed surveillance cameras installed on his house, which is fine, except The Scoop is hearing that residents of West Conshy are footing the bill. Now that's just wrong.

Something doesn't smell right

West Conshohocken's municipal authority secretary will be arrested July 1 for embezzling funds. Word has it Linda Palermo was also embezzling funds from Lower Gwynedd as well. What is it with sewer authority secretaries? The Conshohocken sewer authority secretary was arrested last year for embezzling. Must be something in the water.

Montco public works not really working?

So, how does this sound for a dream job? You go into work, hang out for a couple of hours and then head out to Frank's Pub (now Tony G's) for a two, three, maybe four hour lunch. I wonder if there any openings in Montco's public works department, because that's apparently how the director spends his day. Wait a minute, that couldn't be right, could it?

Stadium plan coming to fruition

Norristown Area High School students will be getting a new stadium after all. Seems the original opposing voice, state Rep. Mike Vereb, has been working behind the scenes to broker a deal for a scaled down version of the plan, which calls for a new track and football field at the high school.

Intern trouble in Montco?

Word has it county Commissioner Joe Hoeffel hired his secretary's daughter as an intern for county solicitor Barry Miller and then had to fire her. Anyone?

Montco DA going after former boss

Montgomery County District Attorney Risa Ferman will ask her old boss and current county Commissioner Bruce Castor to step down from the Mastronardo gambling ring case. Castor, who was once Ferman's boss, probably should, considering his current position.

More on hijinx in West Conshy

This is getting good. Seems a council member now knows about the missing money and is fearing for his safety. So what does he do? He has a video camera installed outside his house....at taxpayer expense!

Is there a new sheriff in town?

Not yet, but word on the street is that Whitemarsh police Chief Eileen Behr is the front runner to replace Montgomery County Sheriff John Durante, who passed away earlier this year.

Hijinx in West Conshy

That's right, West Conshy, I know, who knew there was anything going on there? Here's the inside scoop. There's a woman on the municipal sewer authority in West Conshohocken. Apparently she's buying new cars, new everything, and it's not on her part-time salary. The Scoop has it on very good authority she's been embezzling money from West Conshy and one of the Gwynedds, we're not sure which just yet. You really need to start telling all of your friends about The Scoop. We're new, but we're wired.

Will the Dems need a new chair?

Montgomery County Democratic Party Chairman Marcel Groen has apsirations. Groen wants to become the new head of the state Democratic Party, so, if, and that's a giant if, he moves up the food chain who is ready to take his place. Did someone say Frank Custer?

Bad idea, good idea

First it was a bad idea to rotate the commissioner's seat in Montgomery County and now it's a good idea, according to Commissioner Joe Hoeffel. In a 1993 newspaper article Hoeffel refuses the gavel from Jon Fox, but now he wants to hand it off to Commissioner Bruce Castor? What's the scoop, Joe?

The Real Deal

Bookmark this page. You'll be glad you did.
This is where you're going to find the real scoop on what's going on in Montgomery County, Pa.
Who's zoomin' who?
Well, we know we're not hearing everything we should be hearing about Jim Matthews and a certain grand jury that's been empaneled at the courthouse.
Of course, it could be because they have their hands full with the debacle at 770 Sandy Street in Norristown.
The Scoop is here to tell you the story the papers can't tell you.
So, what's on your mind? What do you want to know?
Let's get this party started.