With brutal directness, the FBI revealed yesterday that its long-running investigation into "Fumo World" isn't over.

After a post-conviction hearing in U.S. District Court for former State Sen. Vincent J. Fumo, an FBI agent stood up, crossed the courtroom toward Fumo friend Mitchell Rubin, and handed him a "target letter" warning him that he could face criminal charges.

Rubin, chairman of the Pennsylvania Turnpike Commission, was sitting in the audience in support of his wife, Ruth Arnao, the former Fumo aide convicted Monday, alongside Fumo, on corruption charges.

After FBI Special Agent Vicki Humphreys handed Rubin an envelope with the letter, Rubin read it, and then slumped in his front-row bench. He was the picture of shock and despair.

The federal jury that convicted Fumo found as part of its sweeping 137-count tally of guilty verdicts that he had defrauded the Senate by handing Rubin a "no-work" contract.

As the ranking Democrat on the Senate Appropriations Committee, Fumo had the authority - and a special multimillion-dollar budget - to hire consultants to advise him and Senate Democrats.

The Senate paid Rubin $150,000 between 1990 and 2004, ostensibly to provide Fumo advice on legislation and help him with constituents. Prosecutors told the jury that Rubin was really reaping a reward for being Fumo's friend.

They pointed out that the Senate had been unable to come up with a single example of written work produced by Rubin, and they contended that Fumo had canceled the contract after he realized he was under investigation. Rubin, 57, the wealthy owner of a business that serves courts papers, did not testify during the trial.

Yesterday, he declined to comment.

According to the U.S. attorney's manual, targets are people on whom prosecutors have gathered "substantial evidence" linking them to criminal conduct and who are "putative defendants."

This week, Gov. Rendell had said he was going to look into whether, in light of Fumo's conviction, he should try to remove Rubin from the Turnpike Commission.

Yesterday, Chuck Ardo, the governor's press secretary, said the news of the target letter would not speed up the governor's review.

Ardo said Rendell would read transcripts of the trial testimony regarding Rubin. Rendell also needs to check his legal options, Ardo said. Rendell has said he was unsure about whether he could force a member of the Turnpike Commission to quit. Rubin's term does not expire until 2010. The position pays him $28,500 yearly.

Rubin and his wife have long been close friends of Fumo's. They were Fumo's guests on cruises on yachts belonging to a maritime museum that figured in the indictment. Jurors concluded that Fumo defrauded the museum by not paying for the cruises.

With Fumo and Arnao now convicted all counts and awaiting sentencing, prosecutors and the FBI appear poised to launch a kind of "mopping up" operation, going after smaller targets turned up in their multiyear investigation into "Fumo World," a phrase used even by the senator's aides.

Rubin was not the only close Fumo associate to be handed a no-work contract, according to prosecutors.

The jury also convicted Fumo of giving an even more generous contract to Michael Palermo, one of his oldest friends. Taxpayers paid Palermo a total of $287,000 between 1999 and 2004, supposedly to advise Fumo on intrastate-transportation matters.

Fumo ended Palermo's contract at the same time he ended Rubin's.

Palermo, who was Fumo's first chief of staff after Fumo's initial election in 1978, could not be located for comment yesterday.

After Rubin became chairman of the Turnpike Commission, Palermo, a former turnpike executive, got a consulting contract there, too. That one paid him a total of $220,000 in 2003 and 2004.

According to trial testimony, Palermo produced no written work product in either consulting position. And though his Senate contract was to give advice on transportation, three Fumo aides who specialized in such issues said they had had no dealings with him.

During the trial, the defense contended that Palermo and Rubin had given their advice to Fumo directly in private conversations.

Palermo figured in one of the earliest scandals of Fumo's long career. In 1973, Fumo quit a state job after The Inquirer reported that he was running a political spying operation.

Palermo, a former Philadelphia police officer, had identified himself then as "chief, Internal Security Unit," and reporting to Fumo.

Fumo has spent nights at Palermo's home outside Harrisburg while working at the Capitol. And after Fumo bought a 100-acre farm near the capital in 2003, according to trial testimony and exhibits, Palermo was there to help with such issues as the eviction of tenants and the placement of underground fuel tanks.

As he departed the federal courthouse yesterday, Edwin J. Jacobs Jr., Arnao's lawyer, said he was not surprised that the investigation was continuing.

"Based on the testimony we heard in the case, I would not rule out the possibility that the government intends to target several other people," Jacobs said.

Senate contacts aside, prosecutors contended that Fumo and Arnao had worked with others to defraud a South Philadelphia nonprofit, Citizens' Alliance for Better Neighborhoods.

Arnao, who was once Fumo's legislative aide, eventually became executive director of Citizens' Alliance. She left in 2006; at the time, she was being paid a salary of $150,000.

In his closing address to the jury, Assistant U.S. Attorney Robert A. Zauzmer specifically named her successor, Christian DiCicco, as part of the group engaged in fraud.

During the trial, former Citizens' Alliance laborers testified that they had done personal work for DiCicco on the charity's time, including laying hardwood floors, doing wiring, and hanging drywall in a house he owned.

DiCicco, the son of City Councilman Frank DiCicco, has denied that laborers' testimony.

DiCicco's lawyer, William DiStefano, said yesterday that his client hadn't received a target letter. DiStefano also said federal prosecutors told him yesterday that they had no immediate plans to issue such a letter to DiCicco.

The FBI gave Rubin the letter after a morning hearing over the prosecution's push for a court order demanding that Fumo pay $4 million, and Arnao $1.4 million, as forfeiture for the financial gains from their crimes.

In part, prosecutors have argued that Fumo should pay for the cost of Senate salaries for the time in which his staffers were illegally working on political campaigns or providing personal services to him.

Lawyer David Smith, a new member of Fumo's defense team, told the court that the prosecutors' demand unfairly distorted the law on forfeiture. He said Fumo might have to return property he received illegally, such as tools, but should not have to pay back money for cash losses to the Senate.

The Fumo Case

To read more about former State Sen. Vincent J. Fumo, who was convicted this week in federal court of 137 counts of fraud, conspiracy, tax offenses, and obstruction of justice, go to http://go.philly.com/fumo The site also has an interactive guide to the marathon trial - with links for every day of trial coverage, each day's blog, and key audio from court.

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