Pa. state employee charged by Attorney General in insurance kickback scheme
An auditor with Pennsylvania’s Department of Labor and Industry was arrested by state authorities March 19 and charged with soliciting and receiving bribes in exchange for favorable treatment of businesses insured through the State Workman’s Insurance Fund.
The office of Pennsylvania Attorney General Linda Kelly announced Monday that agents from her office’s Public Corruption Unit charged James McDonnell, 53, of Scranton, Pa., with the bribery scheme.
Also arrested was McDonnell’s wife, Michelle McConnell, 44, who is being charged alongside her husband with criminal conspiracy.
According to a news release by the Attorney General’s Office, James McDonnell, who is an auditing supervisor with SWIF, a division of the Department of Labor and Industry, received more than $80,000 between 1999 and 2011 through a scheme in which he solicited bribes from Pennsylvania business owners insured through the SWIF program in exchange for reducing their insurance premiums.
All businesses throughout the state are required to carry worker’s compensation insurance, which can be obtained through private insurance companies or through the SWIF program.
Kelly’s announcement states that investigators discovered at least 15 instances in which James McDonnell released refunds to businesses without documentation to support the transactions.
The kickbacks were either paid directly to James McDonnell in cash or by the businesses involved in the alleged scheme putting Michelle McDonnell on the companies’ payrolls as a so-called ghost employee, according to the Attorney General.
James McDonnell faces five counts of official bribery, three counts of conflict of interest, two counts of dealing in proceeds of unlawful activity and two counts of criminal conspiracy.
His wife is being charged with two counts of criminal conspiracy.