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COMMONWEALTH PENNSYLVANIA v. HAROLD L. MITCHELL (12/29/87)

decided: December 29, 1987.

COMMONWEALTH OF PENNSYLVANIA, DEPARTMENT OF TRANSPORTATION, APPELLEE,
v.
HAROLD L. MITCHELL, INDIVIDUALLY, AND MARK G. SHULTZ, INDIVIDUALLY, AND EDWARD A. CUMMINS, INDIVIDUALLY, AND HAROLD L. MITCHELL, MARK G. SHULTZ, EDWARD A. CUMMINS, T/A CUMMINS CONSTRUCTION COMPANY AND/OR APPALACHIAN PIPELINE, INC. APPEAL OF MARK G. SHULTZ



Appeal from the Order of the Commonwealth Court of Pennsylvania dated May 20, 1985, and the Order of the Commonwealth Court of Pennsylvania dated May 2, 1986 at No. 140 CD 1981. Pa. Comwlth. Ct. ; A.2d (19 ).

COUNSEL

George Retos, Jr., Retos, Held & Mascara, Washington, for appellants.

Kenneth Lee Sable, Michael J. McCaney, Jr., Asst. Counsels, Kenneth B. Allen, Dept. of Transp., Harrisburg, for appellee.

Robert M. Keener, Sayers, King, Keener & Nalitz, Waynesburg, for Harold L. Mitchell.

Nix, C.j., and Larsen, Flaherty, McDermott, Zappala and Papadakos, JJ. Hutchinson, Former J., did not participate in the consideration or decision of this case. Nix, C.j., files a concurring opinion. Larsen and McDermott, JJ., note their dissents.

Author: Flaherty

[ 517 Pa. Page 206]

OPINION ANNOUNCING THE JUDGMENT OF THE COURT

On October 19, 1978, Harold L. Mitchell, Mark G. Shultz, and Edward G. Cummins were named in a federal indictment for fraudulently obtaining state highway contracts. These three men, acting with one Stephen Koratich, formed a business entity, the Cummins Construction Company, to lease construction equipment to the Pennsylvania Department of Transportation, (hereinafter "the department"), Greene County Maintenance Office. Shultz, the appellant herein, was the Greene County Sheriff and the Democratic Chairman. He had the power to determine who would lease equipment to the department and who would be hired by the department. Mitchell worked in the department from 1971 until 1978. During this time, Mitchell personally approved and signed thirty-six rental agreements between the department and Cummins Construction Company, of which he was a secret owner.

The State Adverse Interest Act provides:

No State employe shall influence, or attempt to influence, the making of or supervise or in any manner deal with any contract in which he has an adverse interest.

71 P.S. § 776.4. The contracts which were executed between Cummins Construction Company and the department contained the following provisions:

NO OWNER, whether as an individual, member of a firm as partner, manager, officer, stockholder, shall be an

[ 517 Pa. Page 207]

    employee of the Department of Transportation nor be related by blood or marriage to any employee in a supervisory capacity with the Department of Transportation, nor shall any employee of the Department of Transportation have any pecuniary interest in the proceeds of the agreement either as an employee of OWNER or otherwise, and OWNER hereby certifies such to be the fact. The OWNER hereby agrees that for violation of this condition of the agreement, the agreement shall be terminated and the OWNER shall, upon demand, pay to the COMMONWEALTH under the terms of this agreement, and further, upon failure, refusal or default, OWNER or OWNERS do hereby empower any attorney, or the prothonotary of any court of record within this COMMONWEALTH or elsewhere to confess judgment against said OWNER or OWNERS for the full amount of all rentals paid by the COMMONWEALTH under and by virtue of this agreement, with the costs of suit and release of all errors, together with attorneys commission of 5% and interest, without stay of execution, waiving inquisition and condemnation of any real estate and do hereby waive the benefit of any law or laws in force or which may hereafter become in force, exempting property from levy and sale upon execution.

This contract provision requires that no department employee be an owner or have any pecuniary interest in the leasing company. However, Mitchell was a departmental employee and also an owner of Cummins Construction Company, and Mitchell and the other owners concealed Mitchell's ownership interest in Cummins Construction from the department. The essence of the fraud with which Shultz, Mitchell and Cummins were charged was that they made misrepresentations to the department concerning ownership of the leasing company, and as a result of these misrepresentations, were able to secure leasing contracts. Federal law was involved because the United States mails were utilized in securing signed copies of the contracts.

Shultz, Mitchell and Cummins were brought to trial on the federal indictment and the trial resulted in a hung jury.

[ 517 Pa. Page 208]

When Shultz and Mitchell learned that Cummins would testify against them at a second trial, they entered into a plea bargain with federal authorities. After a lengthy plea bargain colloquy, Shultz and Mitchell pled guilty to one count of violating 18 U.S.C. § 1341 and § 2. At the guilty plea colloquy, the trial court explained the offenses to both defendants as follows:

Now if this case were to go to trial, with respect to count one, the government would have to prove three essential elements of this offense and they would have to prove it to the satisfaction of a unanimous jury, and the three essential elements which the government would be required to prove are, first, the act or acts of having devised or having intended to devise a scheme or artifice to defraud, or to attempt to defraud a department of government out of property or money or credit by means of false or fraudulent representations.

Second, the government would have to prove the act or acts of placing or causing to be placed in an authorized depository for mail matter a letter intended to be sent or delivered by the post office department as charged; and third, the act or acts of so using or causing the use of the United States mails willfully and with the specific intent to carry out some essential step in the execution of the scheme or artifice to defraud or to attempt to do so as charged . . . .

The other section of the United States Code with which you are charged with violating is 18 United States Code, Section 2, and it states that whoever commits an act against the United States or aids, abets, counsels, induces or procures its commission is punishable as a principal, and what that means is that if a person helps another in procuring the commission of a crime, that person may be punished just as the principal person in the commission of the crime is punished.

Reproduced Record 178a-180a.

Following this explanation and a colloquy on the defendants' rights generally, the court ...


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