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Prison Kickback Scheme Claims Advance to Trial

SCRANTON, Pa. (CN) - A boy and his mother can pursue claims of a multimillion kickback conspiracy between a former Luzerne County judge and the juvenile detention center he favored at sentencing, a federal judge ruled.

James Gillette claims that he was denied his right to counsel and due process at juvenile proceedings in 2004, and that he was wrongfully imprisoned for until 2008 because of a conspiracy to violate his civil rights and federal anti-racketeering law.

U.S. District Judge A. Richard Caputo refused last week to dismiss claims against two defendants among several judges, officials and detention centers named in the suit.

As judges for Luzerne County, Mark Ciavarella and Michael Conahan allegedly collected about $2.6 million for assigning juvenile delinquents to facilities managed by PA Child Care, a detention center with which they conspired. The judges and facilities "took steps to conceal these payments, including making multiple financial transactions via wire transfer, entering false entries in books and records, creating false notations on checks, and creating fraudulent agreements," according to Caputo's summary of the Gillette complaint.

Both judges pleaded guilty to the kickback scheme in 2009, as hundreds of alleged victims filed class actions.

Building off the success of the PACC facility, the company's officers built a second detention center called Western PA Child Care (WPACC).

"Mr. Ciavarella ordered the detention of juveniles even when juvenile probation officers did not recommend detention and put pressure on court staff to recommend detention," the summary continues. "He used his administrative powers to adopt procedures for a 'specialty court' that allowed for more juveniles to be sent to the PACC and WPACC facilities. He did not disclose his financial interest in the facilities to juvenile offenders or their families."

Since judicial immunity shields Ciavarella's courtroom conduct, however, he does not have to face claims regarding his delinquency determinations and the sentences he imposed, Caputo ruled.

But Ciavarella's other alleged actions, "such as coercing probation officers to change their recommendations," are fair game.

Caputo also rejected attempts by the WPACC to dismiss Gillette's constitutional claims, which it apparently mischaracterized as claims for "malicious prosecution or false imprisonment."

"These are merely frameworks imposed by WPACC," Caputo wrote, saying that Gillette need not show a lack of probable cause.

"Further, Mr. Gillette would satisfy any requirement of a favorable determination, as the Pennsylvania Supreme Court vacated all juvenile adjudications entered by Ciavarella between January 1, 2003 and May 31, 2008," the 16-page decision states.

Gillette has also tied the alleged civil rights violations to a company policy, put into action by an official named Robert Powell. And he has sufficiently alleged a conspiracy with the claim that Powell, "acting on behalf of WPACC, made an agreement with the judges that he would pay them for their assistance in facilitating the construction and use of juvenile detention centers in Luzerne County," Caputo wrote.

Gillette's RICO claims against the center survived as well since the theory he is using, respondeat superior, "will require factual development," the judge found.

The statue of limitations does not bar these claims because Gillette and his mother "adequately established fraudulent concealment."

Allegedly forged documents were part of an effort to hide the conspiracy, thus tolling the four-year window.

Though Gillette's mother, Erica Michaliga, had accused Ciavarella of being "in bed with" someone or receiving money from someone as early as 2004, Caputo rejected claims that she missed an opportunity to investigate possible corruption. "Ms. Michaliga's comments, however, are more properly characterized as the emotional outburst of a frustrated parent than the legitimate of official corruption," Caputo wrote.

"Because plaintiffs did not know the concealed facts supporting their cause of action, nor could they reasonably have been expected to know those facts, the statute of limitations on their claim was tolled until criminal charges were brought against the individual defendants in early 2009," he added.

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