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Lighting scam

The far-reaching story of fraud by Municipal Energy Managers continues to play out in Pennsylvania towns and townships.

Bankrupt MEM is being liquidated and Nesquehoning taxpayers stand to lose monies the borough paid back in 2008 when MEM was wooing municipalities with an offer that sounded like a bright idea.In fact, the deal seemed so good that Nesquehoning jumped at the opportunity, as did just about everybody else.The borough would buy streetlights from PPL while MEM would do maintenance.Economies of scale would help Nesquehoning purchase electricity cheaper, resulting in $1 million in savings over 20 years.MEM made similar promises to other local towns.Before signing contracts, the municipalities did their due diligence on MEM and everything appeared kosher. And at the time, maybe it was.But in the long run, it wasn't.Eventually, the entire deal flopped, not only in Nesquehoning but elsewhere, too. MEM tried placing blame on adverse changes in PPL policies.But the bottom line is that nobody was repaid the monies given to MEM.In 2012, solicitor Robert Yurchak sought judgment on behalf of Nesquehoning, a case heard by Carbon County Judge Steven R. Serfass, who awarded Nesquehoning $1.5 million.But it's yet to be seen if that judgment will do any good.In a bankruptcy filing, MEM reported $8 million in debts and only a fraction of that amount in assets.MEM lists among its holdings a 2008 Chevrolet Suburban with mechanical problems and 156,000 miles, valued at $5,000, and used office equipment, furniture and fixtures, valued at $2,000, plus other less-than-solid assets. Nesquehoning may not see a dime of its money, and the same for other towns.The scope of MEM's fraud is staggering.Research reveals these amounts as having been paid to MEM scammers Patrick J. McLaine and Robert J. Kearns:Bethlehem Township, $832,000; Coaldale, $133,000; Coplay, $160,000; Cumru Township, $238,000; Hampden Township, $1.3 million; Jim Thorpe, $297,000; Lansford, $249,000; Mahanoy City, $289,000; Richland Township, $188,000; South Williamsport, $194,000; Stroudsburg, $510,000; Tamaqua, $532,000; Tremont, $63,000; Walnutport, $187,000; West Pittston, $348,000; and Elizabethtown and Manheim, nearly $1 million each.All of that money was paid in good faith, and nobody got their money back.In a step toward justice, MEM's two owners were convicted of felony theft pertaining to the Bethlehem Township case.In April 2013, McLaine was sentenced to serve 16 months to five years in state prison and to pay full restitution.Kearns also received a similar sentence. But will court-ordered restitution actually happen in Bethlehem Township or anyplace else?Don't count on it.Which begs the question, where did the money go?By DONALD R. SERFASSdserfass@tnonline.com