Business man sentenced for role in Philly judge's fraud scheme

By Jim Boyle | Mar 5, 2015

PHILADELPHIA - A Philadelphia area businessman pleaded guilty in federal court

Tuesday to his role in a fraud scheme that earned a former Philadelphia Municipal Court judge two years in federal prison and a disbarment.

Sam Kuttab, 55, of Wyncote, pleaded guilty to one count of mail fraud for participating in a scheme to have Judge Joseph Waters use his judicial position to influence the outcome of a small claims case in the Philadelphia Municipal Court.

According to documents filed in the case, on Sept. 30, 2011, Kuttab notified Waters that he had a small claims case pending in the Municipal Court. Kuttab’s company, Donegal Investment Properties, was sued by another company, identified as Company B, for $2,733 in unpaid fees for security services.

Waters then used his judicial position to achieve an outcome favorable to Kuttab, the documents say. Specifically, Waters called two other Municipal Court judges assigned to the case on different dates, explained his relationship with Kuttab, and asked them to rule in Kuttab’s favor.

In September 2011, a Municipal Court judge identified in the documents as Judge #1 granted Kuttab’s company a continuance in the case over Company B’s objection after receiving Waters’ call.

In November 2011, the Municipal Court Judge identified in the information as Judge #2 adjudicated the case in Kuttab’s favor after Waters called and said that Kuttab was “a friend of mine.”

After losing the case, the plaintiff threatened to appeal the verdict, and Waters mediated a settlement in which Kuttab agreed to pay $600 to settle the case. After attorney fees, Company B received $400 rather than the $2,733 for which he sued.

Kuttab admitted that he and Donegal gained a secret advantage through a series of secret ex parte communications between Waters and the other Municipal Court judges, some of which were recorded in FBI wiretaps, and that he participated in the scheme with Waters to cause favorable rulings for Donegal.

In September, Waters pleaded guilty for his role in fixing this case as well as fixing a criminal case conceived as part of an FBI sting operation. He was sentenced to 24 months in prison.

In addition to the prison term, U.S. District Court Judge Juan R. Sanchez ordered three years of supervised release and ordered Waters to pay a fine of $5,500, and a special assessment of $200. Waters was also disbarred by the state Supreme Court in December over the federal charges.

Sanchez scheduled Kuttab's sentencing hearing for a date in July to be determined. Kuttab faces a maximum statutory sentence of 20 years in prison, a fine of up to $250,000 and up to three years of supervised release.

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