Tax-evading contractor gets 2 years in jail

South Philadelphia electrical contractor Donald "Gus" Dougherty was sentenced yesterday to two years in prison and ordered to pay $2.3 million in restitution for tax evasion and embezzlement.

Dougherty pleaded guilty in May to dodging taxes, avoiding payments to the electricians union's benefits fund, and making an illegal payment to union chief John Dougherty in the form of $115,600 worth of free renovations to his home.

The two men are not related, but are lifelong friends.

John Dougherty was not charged in the case, and Donald Dougherty's attorney, Eric Sitarchuk, said his client was not assisting the government in any investigation of the union leader.

"This has nothing to do with John Dougherty," Sitarchuk said after U.S. District Judge Gene E.K. Pratter sentenced his client.

Dougherty's free work for John Dougherty violated legal prohibitions against employers' having a financial relationship with leaders of unions that represent their employees.

Federal prosecutors said in a May court filing that they were "pursuing an ongoing investigation" of John Dougherty, but Assistant U.S. Attorney Anita Eve declined comment on the subject yesterday.

Efforts by the Daily News to reach John Dougherty late yesterday were unsuccessful.

The relatively lenient sentence from Prater followed an emotional day in which a procession of Donald Dougherty's friends, neighbors and relatives testified to his generosity and good works, from helping fire victims and handicapped children to sheltering a rape victim who was pounding on doors on Dougherty's street one night.

Supporters wrote 294 letters that sat in two stacks piled several inches high on Pratter's desk.

Pratter appeared moved by the accounts, telling Dougherty that he had "a documented, undeniable, bona fide history of helping your community, people you know, and even strangers."

But Pratter told Dougherty that while he was helping others he was "living a lie . . . there's no other word for it. You were cheating."

By paying his employees in cash, Dougherty avoided taxes and payments to the union-benefits fund. He also pleaded guilty to stealing from a union fund to support contractors' competing against nonunion firms.

The two-year sentence was lower than the 33 to 41 months recommended under federal guidelines for the 99 criminal counts to which Dougherty pleaded guilty.

Pratter declined to fine Dougherty, saying it would interfere with his ability to pay restitution, including $1,633,471 in back taxes and interest to the IRS and $673,070 to the union.

The most emotional moments of the sentencing hearing came when Dougherty's wife, Dana, wept as she described the effect of her husband's impending prison term on their 7-year-old son.

"I know I shouldn't use children as an excuse," Dana Dougherty said, "but it just breaks my heart."

Her husband was contrite as he addressed Pratter, apologizing for his crimes and adding, "I'm sorry for putting you in a position in the holiday season to have to decide my fate."

He also turned to the roughly 100 supporters crammed into the courtroom and said, "I want to apologize to all of you. I put you all on the spot." *