Fumo witness gets 10 months in tax case

The man who was the top political operative for convicted former State Sen. Vincent J. Fumo before becoming a witness against his patron was sentenced yesterday to 10 months in prison.

Howard Cain, who admitted being paid with state money to do campaign work for Fumo, was sentenced for failing to pay income taxes as required by his plea agreement.

Cain, 61, told U.S. District Judge Michael M. Baylson that instead of paying the government, he had paid private-school tuition for his three children.

The only Fumo insider to testify for the government, Cain was the last of those charged in the corruption case to be sentenced.

Cain said in court that he had paid a personal price for his cooperation with the U.S. Attorney's Office. Since testifying, he said, he has been cut off by all his friends and acquaintances garnered during three decades in politics.

"What I didn't anticipate was the isolation," Cain said. "One finds out who one's friends are."

In March, after a 22-week trial, a federal jury found Fumo guilty of 137 counts of conspiracy, fraud, tax offenses, and obstruction of justice. Prosecutors presented weeks of testimony that Fumo misused millions of public dollars for his own benefit while one of the most powerful senators in Pennsylvania.

In arguing for house arrest, Cain's attorney, Peter J. Scuderi, said Cain's cooperation at Fumo's trial had led to "total obliteration" of his professional and social contacts.

Scuderi said Cain did not have control over the assets spent by his wife, Sarah, and had "scrambled to earn, beg, and borrow money" to meet his tax obligation. Two of the couple's three children are still in private school.

Scuderi wrote in a presentencing memo that Cain had done "exactly the wrong thing" by not living up to the plea agreement.

"It was a self-defeating result of untreated depression manifesting itself as simple avoidance," he wrote.

Cain became a government witness after federal agents discovered he had not filed any income-tax returns, or paid any tax, since 1991. They calculated, and Cain did not dispute, that he had earned $1.6 million and failed to pay $411,000 in taxes between 1997 and 2006. With interest and penalties, he owes the government $1,021,499.

About $500,000 of Cain's income was state money illegally paid to him for political activities on Fumo's behalf.

Government accountants could not find sufficient records to figure out what Cain earned between 1991 and 1997.

Cain told Baylson that he had always intended to pay the IRS.

"This may sound insane, but it was never my intention not to pay. . . . It was deferral" until his children were in college, Cain said.

Cain started doing part-time work for Fumo in the 1980s, and said it was originally legitimate public-relations work. "It evolved into something else . . . and did cross the line."

By the 1990s, he knew his political work with state money was wrong, and testifying for the government was a way to "clear up that portion of my history," Cain said.

Prosecutors praised Cain's cooperation before and during the Fumo trial. But he failed to meet the tax-payment agreement as promised in his 2008 plea agreement.

Cain has not paid his taxes for 2007, 2008, and 2009, which Baylson said was a central reason he sentenced Cain to prison.

Cain and his wife agreed to make a $25,000 down payment on his back taxes in 2008, but did not pay the sum until confronted by prosecutors in October.

At that time, Assistant U.S. Attorney John J. Pease said the U.S. Attorney's Office also had learned that his wife "systematically depleted" the couple's remaining assets to pay for personal expenses, including tuition, rather than the back taxes.

Cain is to report to prison March 1. Baylson said he would not object if part of the sentence was served in a halfway house.

Fumo received a 55-month prison sentence that was widely criticized for being much shorter than what prosecutors had sought or sentencing guidelines dictated. The government is attempting to appeal the sentence.

Fumo started serving his sentence in August at a federal prison in Ashland, Ky.

Ruth Arnao, Fumo's codefendant, received a year in prison.

Hearings on the Fumo sentence, given by U.S. District Judge Ronald L. Buckwalter, may begin this year.

On Tuesday, the Pennsylvania Supreme Court ordered that Fumo's law license be temporarily suspended. A listing on the court's Disciplinary Board Web site shows the suspension was due to Fumo's criminal conviction.

Fumo received his law degree from Temple University School of Law in 1972.