21 Aug 2014
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Grand Jury: Partners Bilked Bethlehem Township

Township wanted to buy street lights to cut energy costs, instead it had $832,000 stolen, according to grand jury investigation.

Grand Jury: Partners Bilked Bethlehem Township

 

Bethlehem Township taxpayers were bilked out of more than $800,000 by a pair of Lackawanna County businessmen who had been hired to broker a deal with PPL Corp. to buy the township’s street lights, according to Northampton County grand jury, which charged the men on Monday, according to published reports.

Patrick McLaine, 65, and Robert J. Kearns, 45, the principals in Municipal Energy Managers Inc., were both charged with theft, misapplication of entrusted funds and conspiracy as a result of the grand jury probe, according to this story in The Express-Times.

The township hired MEM in July 2007 with an expectation that it would own its own lights within 18 months and then have lower electricity bills, according to Northampton County District Attorney John Morganelli. The township made an initial payment of $832,000 to MEM.

Instead, bank records revealed that MEM had issued 366 checks to McLaine and Kearns totaling more than $600,000. Morganelli said that the money was used to pay personal expenses, including a trip to Disney World.

Township officials had little to say about the indictment. Speaking at the commissioners meeting on Monday night, Solicitor Leo DeVito thanked Morganelli and the grand jury for “the hard work in the investigation.”

DeVito said that this issue has been the subject of civil litigation since 2010 when Bethlehem Township sued MEM. DeVito said the township also has a lawsuit against its former financial consultant, Concord Public Finance, which, according to Morganelli, recommended MEM to township officials.

“We offer no further comment on the matter at this time” because of the pending litigation, DeVito said.

The men were not yet in custody on Monday, but were scheduled to be arraigned today before District Judge Joseph Barner.

According to wfmz.com, McLaine last year admitted in federal court that he offered hundreds of thousands of dollars in bribes to a Lackawanna County commissioner on trial for corruption.

The commissioner was sentenced to 11 years in prison last week, while McLaine was given immunity for his testimony, the television station reported.

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