Former Wilkes-Barre Towing Contractor Charged With Mail Fraud And Filing A False Income Tax Return

SCRANTON – The United States Attorney’s Office for the Middle District of Pennsylvania announced today that Leo Glodzik, age 45, of Wilkes-Barre has been charged in a Criminal Information filed today in the United States District Court in Scranton with Mail Fraud, Being a Felon in Possession of a Firearm, and Subscribing to a False Federal Income Tax Return.

According to United States Attorney Peter Smith, the charges, in part, arose as a result of a towing contract Glodzik’s firm, LAG Transport, Inc. (LAG), had with the City of Wilkes-Barre for the exclusive rights to tow all vehicles as requested by the City, and/or the Wilkes-Barre Police Department, and/or the city’s agents. The contract began in January 2005 and was ended in June 2013, after disclosures of complaints from residents related to LAG’s towing practices.

According to the charges in the Criminal Information, LAG towed vehicles throughout Wilkes-Barre as the result of accidents, police incidents or vehicle abandonment.  Vehicles were towed to locations owned and controlled by Glodzik.

Glodzik allegedly devised a scheme to defraud lawful owners of the vehicles by charging excessive towing and storage fees for LAG’s services or intentionally hindering the owners’ access to their vehicles in a way that resulted in additional fees.  This allegedly resulted in owners signing over title to vehicles to LAG or Glodzik to discharge the fees.

Glodzik then allegedly gained ownership of the vehicles through use of abandonment procedures administered by the Pennsylvania Department of Motor Vehicle (PennDot) to transfer ownership from registered owners to LAG.  Forms were submitted to PennDot, using the U.S. Postal Service.

The forms submitted to PennDot stated that vehicles had a value of less than $500, when, in fact, the values were greater.  This resulted in Glodzik being able to avoid legal advertisement of abandoned vehicles and payments to the Commonwealth of Pennsylvania of money received for vehicles sold at auctions that were above and beyond Glodzik’s own business costs.

As a result of the scheme, Glodzik allegedly enriched himself by unlawfully taking ownership of vehicles to which he was not entitled and using intentional misrepresentations to reduce his own expenses and costs.

The fraud scheme is set out in a mail fraud charge in the Criminal Information relating to a vehicle for which a notice of declaration of abandonment was mailed to PennDot in April 2011.

Glodzik is charged in the Criminal Information with Federal Income Tax Fraud, specifically, the filing of a federal tax return for 2008, in which he claimed zero taxable income, when, in fact, his actual taxable income for that year was allegedly $408,618.

The Criminal Information also charges Glodzik with being a convicted felon in possession of a firearm.  The charge was part of an Indictment of Glodzik previously returned by a federal grand jury in Scranton in April 2015.  The discovery of the firearms was pursuant to searches by agents of the Federal Bureau of Investigation and Internal Revenue Service Investigations.

The charges are the result of investigations by the Scranton Office of the Federal Bureau of Investigation, the Internal Revenue Service Investigations, and the Pennsylvania State Police into local government practices and contracting in Luzerne County.  Prosecution is assigned to Assistant United States Attorneys Michelle Olshefski and John Gurganus. 

Glodzik was also previously charged in the April 2015 federal indictment with bank fraud in connection with activities of the Wilkes-Barre City Employees Federal Credit Union. A former Wilkes-Barre City police officer and a former credit union employee were charged and pleaded guilty in that investigation.  The government has agreed to dismiss the bank fraud charge against Glodzik as part of a plea agreement in the Criminal Information filed today.  The agreement is subject to the approval of the court.  No date has been scheduled for the entry of Glodzik’s plea.

Indictments and Criminal Informations are only allegations. All persons charged are presumed to be innocent unless and until found guilty in court.

A sentence following a finding of guilt is imposed by the Judge after consideration of the applicable federal sentencing statutes and the Federal Sentencing Guidelines.

The maximum penalty under the mail fraud federal statute is 20 years of imprisonment.  The firearm charge is punishable by up to 10 years’ imprisonment, and the maximum penalty for the tax charge is three years’ imprisonment.  Each crime is also punishable by a term of supervised release following imprisonment, and a $250,000 fine.

Under the Federal Sentencing Guidelines, the Judge is also required to consider and weigh a number of factors, including the nature, circumstances and seriousness of the offense; the history and characteristics of the defendant; and the need to punish the defendant, protect the public and provide for the defendant's educational, vocational and medical needs. For these reasons, the statutory maximum penalty for the offense is not an accurate indicator of the potential sentence for a specific defendant.

# # #