HARRISBURG - Joseph W. Nagle, the former head of the now-defunct Schuylkill Products Inc., Cressona, was sentenced to seven years in a federal prison Monday for his role in what prosecutors called the largest Disadvantaged Business Enterprise fraud ever perpetrated.
Nagle, 53, of Deerfield Beach, Florida, was convicted by a federal jury in Harrisburg on April 5, 2012, following a 19-day trial. The former president and chief executive officer was found guilty on 26 charges, including wire fraud, mail fraud, engaging in unlawful monetary transactions and conspiracy, resulting from his role in the scheme, which led the to the demise of Schuylkill Products.
Senior U.S. District Judge Sylvia H. Rambo sentenced Nagle to 84 months behind bars Monday despite his defense lawyers asking for punishment similar to that of the other alleged co-conspirators and other defendants in fraud cases.
"The court has considered the nature and circumstance of the offense as well as the history and characteristics of the defendant," Rambo said. "The sentence reflects the seriousness of the offense, promotes respect for the law and provides just punishment ... The sentence is appropriate, yet not greater than necessary to achieve the sentencing objectives."
Prosecutors charged Nagle and several other Schuylkill Products executives with using Marikina Engineers and Construction Corp., West Haven, Connecticut, as a front under the DBE program from 1993 until 2008 to funnel work to the Cressona company and its wholly owned subsidiary, CDS Engineers Inc.
Romeo P. Cruz, a Filipino, owned Marikina, enabling it to be classified as a DBE under federal law and making it eligible for certain construction contracts, according to prosecutors. Schuylkill Products and CDS Engineers then used Marikina as a front that let them do the actual construction work, according to allegations.
Schuylkill Products manufactured concrete bridge beams and other suppliers' products while CDS Engineers installed them. Personnel from the two companies used Marikina passwords, signature stamps, business cards, letterheads and email addresses and covered their companies' logos on trucks with Marikina magnetic placards and decals to conceal the fraud, prosecutors alleged.
Northeast Prestressed Products LLC bought Schuylkill Products for $9.25 million in April 2009 and continues to operate at the site along Route 901 in Cressona.
Prosecutors asked for seven years imprisonment Monday and argued that Nagle knowingly led the long-standing and massive fraud as company president, even though the conspiracy started years before he took the position, and that he gave false testimony during the investigation and trial.
Assistant U.S. Attorney Bruce Brandler said Nagle came up with various concealment activities, including having separate domain names for company emails and not having CDS workers wear their jackets at construction sites.
"This is not the activity of a passive person in this scheme, this is the activity of a leader in this scheme," Brandler said.
Prosecutors also said the three co-conspirators - Dennis Campbell, Ernest G. Fink Jr. and Timothy Hubler - testified that Nagle had a prominent role in the fraud.
Meanwhile, Nagle's defense attorney, Michael Schwartz, maintained Campbell and Hubler led the conspiracy while Nagle was a passive participant.
"... Yes, Mr. Nagle had leadership of the supervisory aspect of the business, but that is separate in part from the supervisory aspect of the crime," Schwartz said. "For those reasons, your honor, we don't think the government can meet its burden of showing that Mr. Nagle was anything more than a participant."
Schwartz also said that Nagle did not knowingly lie about aspects of the company and ongoing and past construction projects.
"This is not a defendant who being approached by the FBI had an excuse for everything, saying all the facts are wrong," Schwartz said. "Mr. Nagle answered the questions, the evidence suggests, to the best of his ability. Were they 100 percent accurate? No. But no one is 100 percent accurate in the circumstances that they are here."
Brandler said Nagle has been covering up the relationship between the companies over the last 15 years.
"Mr. Nagle's statements are a continuation of that effort," he said.
Prosecutors agreed with Schwartz's recommendation to commit Nagle to the federal prison in Pensicola, Florida, or a nearby facility. Nagle has 60 days, or until Sept. 29, to surrender himself to the facility and must pay more than $27,600 in fines.
Nagle has 14 days to appeal the sentence. He filed an order and motion Monday seeking another lawyer in pursuing an appeal.
Any appeal will be heard by the Philadelphia-based 3rd U.S. Circuit Court of Appeals.
Rambo is scheduled to sentence Fink, Orwigsburg, Schuylkill Products' former vice president and chief operating officer, at 10 a.m. July 14 in Harrisburg. Fink pleaded guilty to a charge of conspiracy to defraud the United States.
Campbell, Cruz and Hubler received sentences of 24 and 33 months.