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Musto denies any wrongdoing

<b>First Posted:</b> 11/23/2010

Terrie Morgan-Besecker

SCRANTON - A federal grand jury has indicted state Sen. Raphael Musto for allegedly accepting more than $38,000 in kickbacks from a company and an individual in exchange for helping them obtain grants and funding.

United States Attorney for the Middle District of Pennsylvania Peter Smith discusses the matter of Sen. Musto's indictment during an afternoon press conference in Scranton.

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The indictment, issued this afternoon, charges Musto, 81, of Pittston, with honest services wire fraud, corrupt receipt of a reward for official action and making false statements to a federal agent.

According to the indictment:

In 2006 a company, which is not identified, contracted to do renovations to a property that was then owned by Musto. The cost of the repairs was $47,900.

In order to give the appearance that he had paid in full for the services, Musto issued a check for the total amount to the company. However, representatives of the firm then paid Musto $25,000 in cash.

In 2007 the same company did an additional $10,000 worth of repairs to the property, for which it did not bill Musto. In addition, from 2005 to 2008 the company gave Musto annual holiday gifts, which he failed to report on his statements of financial interest.

Prior to and subsequent to receiving these things of value, Musto utilized his position as a state senator to advocate and advance projects that were beneficial to the company. For example, in 2006 Musto sought grants for the firm for the construction of a multi-million dollar commercial development in Lackawanna and Luzerne counties.

Although the company is not identified, a subpoena served at the Pittston Township municipal offices in April produced two building permits and a building plan for a commercial property at 65 Bryden St. formerly owned by the senator.

The permits, both issued in 2006, showed that Mericle Construction was hired to do nearly $40,000 worth of remodeling and roof work on the property. Musto's statements of financial interest show that he was receiving rental income from the property at the time the permits were issued.

That same property was sold later that year for $1 to one of Musto's sons, Ray Jr., property records show. Musto Jr. operates a physical therapy practice out of the building.
Mericle Commercial Real Estate owns CentrePointe, an industrial park in Pittston and Jenkins townships. Robert Mericle owns the real estate business.
Mericle also contributed a total of $29,600 in seven campaign contributions to Musto's campaign committee between 2006 and 2009. Twice he made $10,000 contributions - on April 17, 2008 and on May 27, 2009.
Mericle pleaded guilty last year to charges related to the racketeering cases of former Luzerne County judges Michael Conahan and Mark Ciavarella.
In a separate incident, the indictment further alleges Musto accepted $3,000 in cash from a person who served on an area municipal authority as a reward for the senator&amp;rsquo;s influence in helping the authority obtain grants and loans. The indictment does not identify the person.
The U.S. Attorney&amp;rsquo;s office has scheduled a press conference for 2 p.m. today at which it is expected to provide further details.
For further updates check back with www.timesleader.com.
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Posted 12:09 p.m.

SCRANTON - A federal grand jury has just issued a six-count indictment against state Sen. Raphael Musto.
For further updates check back with www.timesleader.com.

Grand jury indicts Sen. Raphael Musto for allegedly accepting kickbacks