ShareThis Page
Home

Pair face trial in fraud case

| Wednesday, Aug. 4, 2004

They reportedly used their state and federally funded jobs at a nonprofit economic-development agency to pay for fancy parties, expensive meals and exotic trips.

Now, five years after a state audit highlighted alleged financial abuse by the heads of the since-renamed Ben Franklin Technology Center of Western Pennsylvania, two people face a trial on federal charges of defrauding taxpayers.

Jury selection begins today in the joint trial of Lawrence McGeehan and Kathleen Haluska, the former chief executive and chief operating officer, respectively, of the Hazelwood-based technology business-development agency -- which has been renamed Innovation Works.

McGeehan and Haluska, both of Fayette County, are accused of deliberately exceeding budgets, subverting internal cost controls and intimidating employees so that the two could use the agency to support a lavish lifestyle, instead of the intended goal of creating good jobs. Each faces up to 180 years in prison.

Stephen H. Begler, the attorney for McGeehan, declined to comment other than to say he expects to prove his client is not guilty.

Thomas Livingston, the attorney for Haluska, did not return a call seeking comment.

In 1999, Auditor General Robert P. Casey Jr. reported that the pair had "spent an exorbitant amount of tax dollars trying to mimic the 'Lifestyles of the Rich and Famous.'"

According to Casey, Haluska and McGeehan, both of Brownsville, made unnecessary trips to Ireland, Germany, Japan and China and around the United States. Casey said in a report that the pair held three staff retreats in 1997 at Nemacolin Woodlands Resort and Spa in Fayette County that cost nearly $30,000.

A $14,000 office Christmas party in 1997 featured a harpist, pianist and magician.

Although Casey put the state's losses from waste and mismanagement at about $2.6 million, the federal charges involve about $500,000 in questionable spending.

The federal trial will be conducted before U.S. District Judge David S. Cercone

The biggest expense reportedly involves a $345,122 payment to a resort in Tucson, Ariz., for a February 1998 conference that Haluska and McGeehan claimed was part of their work for the Navy. The 30-person junket included golf, a jazz concert and a performance by a John Wayne impersonator.

Casey's state audit in 1999 spurred the name change at the business incubator to Innovation Works and led to major accounting improvements, said Richard Overmoyer, deputy secretary of the state Department Community and Economic Development, the state agency that oversees the center.

Cercone recently dropped nine of 29 fraud counts against McGeehan and Haluska, who were both 51 when they were charged in April 2003. Cercone ruled that prosecutors duplicated some charges.

TribLIVE commenting policy

You are solely responsible for your comments and by using TribLive.com you agree to our Terms of Service.

We moderate comments. Our goal is to provide substantive commentary for a general readership. By screening submissions, we provide a space where readers can share intelligent and informed commentary that enhances the quality of our news and information.

While most comments will be posted if they are on-topic and not abusive, moderating decisions are subjective. We will make them as carefully and consistently as we can. Because of the volume of reader comments, we cannot review individual moderation decisions with readers.

We value thoughtful comments representing a range of views that make their point quickly and politely. We make an effort to protect discussions from repeated comments either by the same reader or different readers

We follow the same standards for taste as the daily newspaper. A few things we won't tolerate: personal attacks, obscenity, vulgarity, profanity (including expletives and letters followed by dashes), commercial promotion, impersonations, incoherence, proselytizing and SHOUTING. Don't include URLs to Web sites.

We do not edit comments. They are either approved or deleted. We reserve the right to edit a comment that is quoted or excerpted in an article. In this case, we may fix spelling and punctuation.

We welcome strong opinions and criticism of our work, but we don't want comments to become bogged down with discussions of our policies and we will moderate accordingly.

We appreciate it when readers and people quoted in articles or blog posts point out errors of fact or emphasis and will investigate all assertions. But these suggestions should be sent via e-mail. To avoid distracting other readers, we won't publish comments that suggest a correction. Instead, corrections will be made in a blog post or in an article.

click me