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New Orleans water board chair, contractor sentenced to prison for wire fraud, conspiracy

Monday, September 29, 2003

By PAM EASTON
Associated Press Writer

HOUSTON (AP) - The former New Orleans Sewerage and Water board member and a contractor convicted of trying to cover up a scheme where the board member accepted cash and favors to promote a Houston company's interest in a deal to run the Louisiana city's sewage treatment plants were sentenced in federal court Monday.

U.S. District Judge Kenneth Hoyt said he would allow Michael Stump, an employee with Professional Services Group, to voluntarily surrender to begin serving his 21-month prison sentence at a later date given Monday was his 64th birthday. Hoyt also ruled he would allow the board member, Katherine Maraldo, who was sentenced to five months in prison and five months in home confinement, to surrender on Jan. 5, 2004, in New Orleans, so she could continue working in order to qualify for pension benefits at her current job.

Maraldo's attorney, Ron Woods, told the judge by allowing his client to work until the end of the year, she would qualify for her pension and be better positioned upon completing her 10-month sentence to pay her $5,000 fine.

After release from prison, both Stump and Maraldo will be on probation for three years. Stump was also fined $25,000.

Each could have faced up to five years in prison and a $250,000 fine per count for one conspiracy charge and three wire fraud charges a Houston jury convicted them of in June 2002. Stump and Maraldo were cleared of six of the ten counts alleged in a May 2001 indictment for events surrounding a contract awarded in 1996.

"Your honor, I too have spent a tremendous amount of time wondering why I did what I did," Stump said, adding he plans to be a positive contributor to society upon his release from prison.

His attorney, David Gerger, said Stump received a harsher sentence because federal sentencing guidelines classify him as a leader based on his supervision of other people at Professional Services Group.

"They try to categorize people instead of treating them as an individual," Gerger said of the guidelines after the two-hour sentencing hearing.

Maraldo, who was sentenced moments after Stump, wiped a tear from her eye as she spoke to Hoyt in a quiet voice inaudible to courtroom spectators.

U.S. Department of Justice Attorney Armando Bonilla told Hoyt he thought both Maraldo and Stump should receive the harshest punishment possible because each had lied under oath in addition to their crimes.

"This is not a case in which Mrs. Maraldo took a payment once in weakness," he said. "She took a payment every month for 18 months. She should not be able to profit from her criminal activity."

Hoyt said Maraldo had paid back all but $50,000 of the benefits she received from PSG.

At trial, defense attorneys unsuccessfully claimed the money and benefits given to Maraldo were simply a loan between friends.

After reading letters written by many of Maraldo's friends, family and acquaintances, Hoyt said it was out of "mercy" that he came to his sentencing decision.

"I don't have the time nor the need to punish you for things you have punished yourself for," he said of Maraldo, who defense attorneys said is on a number of medications and meets weekly with a psychiatrist. "This is a self-inflicted wound and you have to take responsibility for it. You have to come to your senses about this matter."

As she left the judge's bench, Maraldo smiled toward her husband and son who were sitting in the courtroom's front row.

Woods and Bonilla both declined to comment on the judge's sentence, which had been put off for months because a transcript of the case had not been completed as a result of problems with the court reporter who was responsible for preparing it.

Defense attorneys asked for the sentencing to be delayed again on Monday, but Hoyt denied the request saying a transcript would be completed in time for appeal. He also denied retrial motions from both Maraldo and Stump.

"The only way that this matter can be brought to any sort of conclusion is for me to move forward," Hoyt said. "There is a point at which this thing needs to end and the parties need to pick up and move on with their lives."

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