Peperno acquitted of money laundering, found guilty of bribery, fraud and more

Sept. 10—SCRANTON — James J. Peperno Jr. he wanted to present himself as a benevolent consultant who just wanted payment for his work.

The jury didn’t buy it.

Jurors found the Old Forge man guilty of bribery and related charges after deliberating for seven hours over two days. He was acquitted of two counts of money laundering.

During a nine-day trial, federal prosecutors with the U.S. attorney’s office for the Middle District of Pennsylvania sought to prove that Pepperno, 57, acted as a middleman in a bribery scheme he coordinated involving businessman Walter Stocki Jr. . and the former president of the municipal council Robert Semenza.

Peperno looked straight ahead after the verdict was read. Assistant U.S. Attorney Phillip J. Caraballo-Garrison asked that Peperno be held pending sentencing, arguing that he has been convicted twice in federal court — in 2007 for operating a Ponzi scheme and now for public corruption.

Attorney Gino Bartolai, who represented Peperno, argued that he is needed at home to help his mother, who is about to undergo radiation therapy.

U.S. District Court Judge Malachy E. Mannion said Peperno will remain free for now but warned him to make arrangements for the future, which likely carries a federal prison sentence.

“You understand,” asked the judge.

Peperno said he did.

After the verdict, Peperno said he planned to spend the next few days with his mother and “just breathe a little.”

“It was a long trial,” he said. “And it was hard to deal with.”

Attempts to reach Bartolai after the verdict were unsuccessful.

Mannion ordered a report filled out before the motion. No sentencing date has yet been set.

The court received the case around 5:30 p.m. Thursday, called it a night at 9 p.m., resumed work at 9 a.m. on Friday and delivered a verdict at about 12:30 p.m.

Their questions appeared to focus on aspects of money laundering, namely whether there is a minimum monetary threshold for prosecuting the charge and how intent to conceal is defined under that law. Shortly after 11 a.m., they indicated they were struggling to reach a consensus on any aspect of the case, asking whether they should return a not guilty verdict if they could not agree on charges.

About an hour later, they found Peperno guilty of nine of 11 charges: conspiracy to defraud the United States, violation of the travel law, making false statements and two counts of federal program bribery, honest services fraud and perjury.

The case

The bribery scheme stemmed from a 2017 complaint in which the township alleged Stocki operated an illegal dump on North Keyser Avenue in violation of zoning law. As the lawsuit lingered in Lackawanna County court for years, Stocki racked up about $500,000 in fines, was held in contempt and eventually spent a day in jail.

Peperno’s defense focused on allegations that he was legal counsel who tried to help Stocki in 2019 while the complaint was still before Lackawanna County Judge Thomas Munley, who is now a senior judge.

Peperno took the witness stand this week to make his case. The statements he made on tape, including paying money to Semenza, were lies Peperno told Stocki to get him to pay for the hours he allegedly worked, which prosecutors called “absolute nonsense.”

Peperno may have been a consultant, but his expertise was bribery, Caraballo-Garrison argued to the jury. All Peperno did was take from Stocki and give a piece to Semenza.

He approached Stocki in January 2019. Bartolai claimed that Peperno hoped to help Stocki restore his image and clean up his paddock. Assistant U.S. Attorney Jeffrey St. John told jurors Pepperno just wanted cash.

Stocki began secretly recording their conversation after Peperno demanded a $20,000 advance and a $10,000-a-month contract with his firm, RPP Consulting LLC. Peperno got Semenza on the phone, which Caraballo-Garrison said was meant to show his influence with the council president, while Stocki recorded. “For or against?” Semenza asked. As long as Stocki paid, they would help him, prosecutors argued.

Stokey eventually went to the FBI. Months later, he became an informant and recorded conversations with Peperno and Semenza, including payments he made to Peperno in the fall of 2019. The FBI provided him with approximately $6,000 in cash. Peperno kept much of it, authorities said.

Semenza pleaded guilty in May 2021 to federal program bribery and resigned from the council. He agreed to cooperate with federal investigators and also recorded conversations with Peperno. He is awaiting sentencing.

When Semenza got money, he was in the grip of a “horrific drug addiction,” said his attorney, Jason Mattioli. Semenza testified that he used cocaine, marijuana and tried methamphetamine. His federal prosecution was “his rock bottom,” Mattioli said.

Semenza is now recovering but must make amends to himself, his family and those he was once elected to serve, his lawyer said. This means accepting responsibility and telling the truth.

During the trial, Semenza took the witness stand and testified against Peperno.

“Who paid your bribes?” Caraballo-Garrison asked.

“Walter Stocki and James Peperno,” Semenza testified.

Stokey testified over three days last week as jurors listened to more than a dozen recorded conversations and sifted through pages of text messages that prosecutors argued described the bribery scheme. Efforts to reach Stocki were unsuccessful on Friday.

Mattioli believed Semenza’s testimony helped convict Peperno.

“There were no promises, no guarantees,” he said. “He knew he was going to have to go up there and bare his soul.”

Peperno was also convicted of lying on written statements and giving false testimony in the fall of 2019. Peperno said he had no income or access to bank accounts as authorities investigated whether he could pay outstanding restitution obligations due from a previous federal conviction. arising from an investment plan.

Authorities said he helped get money from victims on the condition that it would be invested. Some of it was, but most of it went to his personal use.

He pleaded guilty in May 2007 to mail fraud, was sentenced to 33 months in prison and ordered to pay more than $700,000 in restitution. At the time he testified, he owed about $390,000 and hadn’t made payments on that debt for about 1 1/2 years.

One of the victims in that case, Brenda Buntz, 61, said she lost more than $500,000.

Reached Friday after the verdict, she said she was glad she was convicted of perjury because she admitted she lied about not being able to pay her back.

“Now I pray that he spends enough time to retire from his criminal career,” Bunds said.

Contact the author:

jkohut@timesshamrock.com, 570-348-9100, x5187;

@jkohutTT on Twitter.

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