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*** UPDATED x1 *** Debt collection company owner indicted for attempts to “corruptly influence and obtain business from” Dorothy Brown, others

Friday, Mar 15, 2019

* US Attorney’s Office, Northern District of Illinois…

The owner of a debt collection company spent tens of thousands of dollars in an effort to corruptly influence and obtain business from court clerks in Florida and Illinois, including the Cook County Circuit Court Clerk, according to a federal indictment returned in Chicago.

DONALD DONAGHER, JR., 67, of Mechanicsburg, Pa., and Palm Beach Gardens, Fla., was the owner and Chief Executive Officer of Harrisburg, Pa.-based PENN CREDIT CORPORATION. From 2009 to 2016, Donagher and Penn Credit provided money and services to benefit the court clerks and related individuals and entities, corruptly seeking favorable treatment in the awarding of the courts’ debt collection work, the indictment states. The efforts included payments to certain clerks’ campaign committees, donations to charities supported by certain clerks, financial sponsorship of events hosted by certain clerks, and free or discounted “robocalls” made by Penn Credit on behalf of certain clerks’ campaigns, according to the indictment.

The indictment was returned Thursday in U.S. District Court in Chicago. It charges Donagher and Penn Credit with one count of conspiracy to commit federal program bribery, and five counts of federal program bribery. Arraignment in federal court in Chicago has not yet been scheduled.

The indictment was announced by John R. Lausch, Jr., United States Attorney for the Northern District of Illinois; Jeffrey S. Sallet, Special Agent-in-Charge of the Chicago office of the Federal Bureau of Investigation; Gabriel L. Grchan, Special Agent-in-Charge of the Internal Revenue Service Criminal Investigation Division in Chicago; and Patrick M. Blanchard, Cook County Inspector General. The government is represented by Assistant U.S. Attorneys Heather K. McShain and Ankur Srivastava.

According to the charges, Donagher in June 2011 caused Penn Credit to pay $5,000 to a scholarship fund named for the Cook County Circuit Court Clerk. Later that summer, Penn Credit began collecting debt for the Clerk’s Office, the indictment states. On Aug. 19, 2011 – less than three weeks after Penn Credit began its work for Cook County – Donagher sent an email to Penn Credit employees and an Illinois lobbyist, advising that Donagher had promised the Cook County Clerk “10k of ‘early’ money,” the indictment states. The following month, Donagher caused a $10,000 contribution to be made in his name “towards the fundraising efforts of Contributions to Friends of [the Cook County Circuit Court Clerk],” the indictment states. The indictment further states that, several months later, Penn Credit made hundreds of thousands of phone calls on behalf of the Cook County Circuit Court Clerk without invoicing or receiving payment from the Clerk’s campaign.

The public is reminded that an indictment is not evidence of guilt. The defendants are presumed innocent and entitled to a fair trial at which the government has the burden of proving guilt beyond a reasonable doubt.

The conspiracy charge is punishable by up to five years in prison, while the maximum sentence for federal program bribery is ten years. If convicted, the Court must impose a reasonable sentence under federal statutes and the advisory U.S. Sentencing Guidelines.

The indictment is here.

*** UPDATE *** Press release…

STATEMENT BY PENN CREDIT AND DON DONAGHER
DENYING ALL CHARGES IN FEDERAL INDICTMENT

CHICAGO, IL (March 15, 2019): The allegations against Don Donagher and Penn Credit are false and the Department of Justice should not have brought this case. Mr. Donagher and Penn Credit acted legally and in good faith, and we will prove that in court.

The indictment presents a novel and meritless theory based on conduct that allegedly occurred long ago. First, the government has charged Mr. Donagher with bribery related offenses, but it has not charged any public official or even claim that a public official was a supposed co-conspirator. Second, unlike the long line of corruption cases that have been prosecuted in Chicago, this case has none of the standard hallmarks of bribery and corruption. There are no allegations of secret cash payments. There are no allegations of concealed payments to shell companies. There are no allegations of lavish gifts or free vacations. In fact, there are no allegations that Mr. Donagher did anything to personally enrich any public official. Simply put, none of the usual indicia of corrupt activity are present in this case. Instead, the Department of Justice is attempting to criminalize entirely lawful, publicly-disclosed campaign contributions and laudatory donations to various charities, a scholarship fund and the partial sponsoring of a Women’s History Month event.

Moreover, Penn Credit never sought and never received any improper benefit from any public official. Indeed, the contracts Penn Credit received from Cook County and other government entities were awarded to it purely on the merits.

For example, regarding the Cook County contract, a county-wide committee, which included members of the State’s Attorney’s Office, objectively rated the proposals submitted by Penn Credit and its competitors, and that county-wide committee rated Penn Credit to be the most qualified company for the contract. And that superior rating was borne out by Penn Credit’s documented performance on behalf of Cook County — Penn Credit significantly increased collections and revenue for the county and dramatically outperformed its competitors by every objective measure. Thus, Penn Credit consistently received “excellent” marks for its debt collection work, not just for the Clerk’s Office, but for its superior services to all County Departments under the contract.

Mr. Donagher has a well-earned reputation for philanthropy and generosity, having donated millions of dollars to a wide variety of charitable causes around the country. The company has an unblemished record as a corporate citizen and leading employer in its community.

Theodore T. Poulos, counsel to Don Donagher and Penn Credit, said, “Donating to political campaigns and charities hoping to engender good will is not a crime. That happens every day in this country.”

Mr. Donagher and Penn Credit will enter pleas of not guilty and will vigorously defend themselves against these unsupported charges. We look forward to our day in court.

- Posted by Rich Miller        

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