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Justice News

Department of Justice
U.S. Attorney’s Office
Eastern District of Pennsylvania

Thursday, April 21, 2016

Political Consultant and Former Easton City Councilman Admits To Bribing Allentown And Reading Officials

PHILADELPHIA – Michael Fleck, 40, formerly of Allentown, PA, pleaded guilty today to one count of conspiracy to commit extortion and bribery offenses and one count of tax evasion, announced United States Attorney Zane David Memeger.  Fleck is a former member of Easton’s City Council. U.S. District Court Judge Juan R. Sanchez scheduled a sentencing hearing for July 25, 2016. 

According to court documents, Fleck was a principal and co-owner of an Allentown-based consulting company that a) conducted fundraising and other campaign-related services for certain elected officials in Pennsylvania (“the political clients”)  and b) lobbied these same political clients on behalf of individuals and companies who sought contracts and other favorable treatment from local governments (“the business clients”).  Public Official #1 of Reading and Public Official #3 and Mary Ellen Koval of Allentown were each elected officials in their respective cities as well as political clients of Fleck’s.  Public Official #1 and Koval sought re-election to the offices that they held, while Public Official #3 aspired to win higher office through statewide election.  Each of these three elected officials attempted to leverage their respective public offices – which gave them actual and perceived authority over the awarding of municipal contracts – for items of value, including campaign contributions.

Ramzi Haddad, charged separately, and the parties identified as Donor #1, Donor #2, Donor #3, Donor #4, Law Firm #4, Donor #5, and “the Partnership” all sought city contracts and/or other favorable treatment from local governments in the Eastern District of Pennsylvania, including Allentown and/or Reading.  Public Official #1, Public Official #3, and Koval each exploited their official positions in order to obtain thousands of dollars’ worth of campaign contributions from one or more of these individuals and organizations.  According to court documents, in each of instances, a public official and/or a donor reached or attempted to reach an explicit exchange of campaign contributions and official action.  Fleck admitted that as part of his “consulting” services, he helped facilitate such quid pro quo solicitations, offers, and agreements and obtained tens of thousands of dollars of campaign contributions through the use of extortion, bribery, and/or fraud.

In Allentown, for example, once the Partnership began making large campaign contributions for Public Official #3, Fleck helped manipulate a purportedly fair and confidential contract award process to the Partnership’s advantage.  Once Public Official #3 communicated his wishes to them, Fleck and Finance Director Gary Strathearn, with the help of Assistant City Solicitor Dale Wiles, both charged separately, sabotaged the award process to ensure that the Partnership prevailed over its competitors.  Similarly, City Controller Mary Ellen Koval agreed to help Public Official #3 and Fleck by attempting to steer Allentown city contracts to certain of Public Official #3’s donors, including Donor #1.  In Reading, Fleck, Reading public official Eron Lloyd, and others helped Public Official #1 obtain campaign contributions from companies that relied heavily on government contracts, such as the companies represented by Donor #2 and Donor #3, as consideration for Public Official #1’s efforts to steer Reading city contracts to them.

Public Official #1 and Public Official # 3 allegedly limited their direct interactions with certain donors.  When donors and officials in Allentown and Reading raised concerns about having to interact with Fleck and/or his employees in connection with official city business, Public Official #1 and Public Official #3 rebuffed their concerns and insisted that they interact with Fleck and/or his employees.

To conceal and continue the conspiracy, Public Official #1, Eron Lloyd, Public Official #3, Mary Ellen Koval, Garret Strathearn, Dale Wiles, and Fleck employed counter-surveillance maneuvers and obstructed justice by, among other things, making false statements to FBI agents conducting a federal criminal investigation.  For example, on March 11, 2015, Fleck falsely stated to FBI agents that he had not told anyone that the agents had confronted him earlier that day when, in fact, as Fleck well knew, he had disclosed the encounter to several others with the intention of warning Public Official #3 about the FBI’s investigation into a bribery, kickback, and extortion scheme.

Fleck also filed false and fraudulent joint U.S. individual income tax returns for tax years 2011, 2012, and 2013, in which he concealed income from his consulting company of approximately $130,897.41, overstated certain deductions, and failed to remit approximately $43,467 in payroll taxes, causing a tax loss of approximately $77,738.

Fleck faces a maximum possible sentence of 10 years in prison, a possible fine, supervised release, and a $200 assessment.  Koval, Strathearn, Wiles, Haddad and Lloyd have pleaded guilty and are awaiting sentencing.  (Wiles: June 6, 2016; Lloyd: June 7, 2016; Koval: July 26, 2016; Strathearn: July 27, 2016; Haddad: July 28, 2016.)

This case is being investigated by the Federal Bureau of Investigation-Allentown Resident Agency, the Internal Revenue Service Criminal Investigations, and the Pennsylvania State Police.  It is being prosecuted by Assistant United States Attorneys Joe Khan and Anthony Wzorek.

Public Corruption
Updated April 21, 2016