SEPTA worker spared job in fraud case

A SEPTA maintenance director who pleaded guilty in July to a single count of honest-services mail fraud was spared his job yesterday when a federal judge sentenced him to three years' probation.

Daniel Monaghan, 54, of Maple Shade, N.J., had faced 18 to 24 months behind bars under advisory-sentencing guidelines, but defense attorney James Funt had argued that even if Monaghan were sentenced to a day in jail, it could cost him his job.

Funt said that Monaghan had lived an otherwise "exemplary" life, and that a second defendant charged separately in the case, William Waterman, had received a sentence of probation and it would be unfair not to do the same for Monaghan. (Waterman had received a motion for leniency from the feds in exchange for his cooperation against Monaghan.)

Waterman was a salesman for the Drummond American Corp., a unit of Lawson Products, Inc., a public company near Chicago.

Drummond sold cleaning supplies and solutions to SEPTA. Monaghan, a maintenance director in SEPTA's bus division, was Waterman's procurement contact.

Authorities charged Waterman in April 2007, alleging he paid kickbacks - disguised as purchasing incentives - to employees of some of his customers, which included SEPTA.

Waterman ordered 263 "certificates of award" from a third party affiliated with Lawson for Monaghan between May 2000 and August 2005 that were valued at $6,575. The certificates, awarded in $25 increments, entitled Monaghan to receive checks for a certain amount that could be used to buy items at various retail stores.

U.S. District Judge Berle M. Schiller said that he found Waterman "far more culpable" than Monaghan. "Incarceration is not always a necessity to deter crime," he said, noting that Monaghan had made restitution to SEPTA.

Monaghan said before sentencing that he had worked for SEPTA for 26 years and that it was willing to give him "a second chance," adding, "I'm truly sorry I ever got involved in this."

Assistant U.S. Attorney Salvatore Astolfi argued for the guideline sentence, saying that Monaghan had committed a "serious offense" while he was in a "position of public trust." The prosecutor said that Monaghan "felt comfortable accepting perks" from Waterman.

In addition to Monaghan and Waterman, 17 other defendants - including seven Lawson sales agents - were charged in connection with the scheme in Chicago and Dayton. Authorities said most had been convicted.

Lawson agreed in August to pay $30 million in forfeiture and restitution over three years for the corrupt conduct of its sales agents. If it abides by all terms of the agreement, the feds will dismiss one fraud count they filed by criminal information.