Allentown, Pennsylvania's former controller indicted on fraud charge

Reuters News
Posted: Jan 13, 2016 7:31 PM

By David DeKok

HARRISBURG, Pa. (Reuters) - The former controller of Allentown, Pennsylvania, was indicted on Wednesday on charges of conspiracy to commit fraud, joining a growing number of officials caught up in an alleged scheme to obtain campaign donations in exchange for city contracts.

Mary Ellen Koval, 64, a Democrat who was elected controller in 2011 and served until her resignation on Jan. 5, is expected to enter a plea on Thursday in U.S. District Court in Allentown, according to local news reports that quoted her lawyer.

She could receive up to 20 years in prison if convicted on the charge of conspiracy to commit "honest services" fraud.

"She is a very strong, very old-school, classy lady who is, despite what has happened, doing the right thing by the city and the people in the city,” her lawyer, Eric Dowdle, told the Morning Call newspaper.

Koval has an unlisted number and could not be reached for comment.

Gary Strathearn, a former city finance director, pleaded guilty on Monday to a charge of conspiracy to commit mail and wire fraud as part of the same suspected scheme. Dale Wiles, a former assistant city solicitor, pleaded guilty in December to withholding documents from the FBI.

Koval, who was also chairman of the Allentown Parking Authority, is accused of conspiring with a leading city official identified in the charging documents as “Public Official #3” to obtain campaign funds for that unnamed official in exchange for city contracts. 

“Public Official #3 ... made clear to certain vendors ... that providing campaign contributions ... was a necessary condition for receiving certain favorable treatment from the City of Allentown,” according to the charging documents.

The unidentified official “agreed to take official action which would be favorable to three donors who had contributed campaign funds to Public Official #3,” the documents said.

Allentown Mayor Ed Pawlowski has not been named in any of the indictments. The Democrat announced plans in 2015 to challenge Republican U.S. Senator Pat Toomey but ended his campaign after the announcement of the FBI investigation.

(Editing by Frank McGurty and Peter Cooney)