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Nonprofit seeks restitution from Fumo

The South Philadelphia nonprofit that former State Sen. Vincent J. Fumo called "my baby" has cast itself as a victim of a fraud scheme by Fumo and its former executive director, Ruth Arnao, according to court documents filed yesterday.

The South Philadelphia nonprofit that former State Sen. Vincent J. Fumo called "my baby" has cast itself as a victim of a fraud scheme by Fumo and its former executive director, Ruth Arnao, according to court documents filed yesterday.

The nonprofit, Citizens' Alliance for Better Neighborhoods, says it wants restitution - including $2.1 million it spent in the unsuccessful fight to stave off Arnao's criminal conviction.

"As proven by the government at trial, CABN has suffered significant financial losses as a direct result of the illegal activities of the defendants," the nonprofit said in a victim-impact statement submitted by federal prosecutors to U.S. District Judge Ronald L. Buckwalter.

The statement was filed as prosecutors and defense lawyers gear up for Fumo's formal sentencing, now scheduled for Tuesday.

A presentence report, prepared by a veteran probation officer, has concluded that Fumo, 66, could be sentenced to a possible prison term of 21 to 27 years under federal sentencing guidelines. Buckwalter, however, is not bound by the guidelines and could impose a more lenient sentence.

This morning, Buckwalter will convene a hearing on defense objections to the presentence report, and the underlying calculations that led the U.S. Probation Department to that estimate of the guidelines range.

Fumo, a once-powerful Democrat, was convicted in March of 137 counts of conspiracy, fraud, obstructing justice, and tax violations.

Assistant U.S. Attorneys John J. Pease and Robert A. Zauzmer contended that he and Arnao, the former head of the charity, defrauded Citizens' Alliance by getting the charity to pay for a slew of personal purchases, such as vacuum cleaners, tools, and expensive paint, as well as farm equipment and cars.

The prosecutors contend that the nonprofit suffered $1.7 million in losses, not including the money spent on lawyers.

While the nonprofit put up money for Arnao's defense, Fumo tapped into money from taxpayers and his campaign fund to pay his lawyers.

According to public records, Fumo withdrew $1.1 million from his campaign fund for legal bills. The state treasury covered $1.2 million in his bills from the period before Fumo was indicted. Fumo also has invested his own money in his defense.

Fumo, who served 30 years in the state Senate before resigning late last year, also was found guilty of defrauding the state Senate by getting state employees to do personal and political-campaign work, and defrauding the Independence Seaport Museum by getting free cruises on yachts provided by the museum.

The defense, meanwhile, took issue yesterday with the Probation Office's calculation that the loss to the Senate was $2.4 million.

Defense attorney Dennis J. Cogan wrote in a court filing that the loss is much less because the Probation Office estimate was "based on the government's flawed methodology and speculative conclusions" not supported by the trial record.

Cogan repeated the argument he made during the trial - that the state employees did more than enough work to earn their Senate pay, and that any errands for Fumo were done on their own time.

Arnao, 52, a longtime aide to Fumo, was convicted of 45 counts, mostly relating to the fraud on Citizens' Alliance. She faces between 10 and 14 years in prison under the sentencing guidelines and is scheduled to be sentenced July 21.

In the victim-impact statement, the nonprofit said its reputation had been "damaged irreparably as a result of its constant association with the illegal activities of the defendants."

It said that it had had to discontinue many of its programs and discharge employees, and that the reputation of the board of directors also had been harmed.

In April, the state Attorney General's Office took the first step toward dissolving Citizens' Alliance, filing a civil complaint seeking revocation of its corporate franchise.