The United States Attorney's Office for the Middle District of Pennsylvania announced today that a federal grand jury in Harrisburg has indicted the former treasurer of Pennsylvania for concealing the receipt of hundreds of thousands of dollars in consulting fees from federal investigators.

According to United States Attorney Peter Smith, Barbara H. Hafer, 72, of Indiana, Pennsylvania, was charged Wednesday with two counts of making false statements to federal agents.In May 2016, federal agents interviewed Hafer as a part of an ongoing investigation.During the interview, officials said Hafer concealed her financial relationship with a business person, referred to in the indictment as "Person No. 1," claiming that this person did not help with her consulting business.When shown a signed contract between Hafer & Associates LLC, and a company owned by the business person, Hafer denied receiving any payment on the contract.According to the indictment, the businessperson had a financial relationship with multiple businesses and had relationships, including fee sharing arrangements, with entities that provided asset management services to the Pennsylvania Treasury while Hafer served as treasurer.The Hafer interview took place as part of an ongoing long-term FBI-IRS investigation of alleged pay-to-play activities involving the Pennsylvania State government.The investigation revealed that in February 2005, within weeks of leaving the office of treasurer, a firm associated with Person No. 1 began making payments to Hafer's consulting firm.For a year, Hafer & Associates received $41,667 a month, totaling the $500,000 committed in the contract. Further, the investigation found that payments began before the contract was signed by the parties.Although Hafer claimed that this business person did not help her consulting business, the investigation revealed that the money allegedly accounted for approximately 73 percent of the funds Hafer & Associates earned in 2005.Hafer served two terms as Pennsylvania's elected state treasurer from 1997 to 2005 and two terms as state auditor general from 1989 to 1997.This case was investigated by the FBI and the IRS. The case is assigned to Assistant United States Attorneys Michael A. Consiglio and William S. Houser.If found guilty, the maximum penalty under federal law is 5 years of imprisonment on each count.