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U.S. appeals court upholds 'gilded cage' sentence for tax cheat
Tuesday, April 21, 2009

Though they may not have sentenced a wealthy Washington County contractor convicted of tax evasion to serve one year of home detention in his $5 million mansion, eight judges for the 3rd U.S. Circuit Court of Appeals are not willing to disallow it, either.

The majority of judges who heard the argument in November overruled a three-judge panel and decided that U.S. District Judge Gary L. Lancaster did not abuse his discretion in sentencing William G. Tomko below the recommended guideline range of 12 to 18 months in prison.

Federal prosecutors and IRS officials were outraged by the sentence that would allow Mr. Tomko to serve his time in what one Justice Department official called a "gilded cage."

U.S. Attorney Mary Beth Buchanan said she will consult with the solicitor general's office in Washington, D.C., to determine if prosecutors should seek a review at the U.S. Supreme Court.

In sentencing Mr. Tomko, Judge Lancaster also ordered him to pay a $250,000 fine -- significantly more than the recommended $30,000.

The case was heard by all 13 judges on the 3rd Circuit last fall.

In a dissenting opinion, five judges found that "relying on a hefty fine in lieu of imprisonment as a means to deter Tomko from future criminal activity only reinforces the perception that wealthy defendants can buy their way out of a prison sentence," wrote Judge D. Michael Fisher.

Mr. Tomko, who pleaded guilty in May 2004 to a single count of tax evasion for not reporting $228,557 in income, was sentenced by Judge Lancaster to three years of probation. The first year of the sentence was to be served on home confinement.

The U.S. attorney's office objected because the home confinement would be served in the very house that was the subject of the crime.

The government accused Mr. Tomko of having a dozen subcontractors building his home from 1995 to 1998 submit false invoices to make it look as if the work on the 8,000-square-foot structure had actually occurred on W.G. Tomko Inc. job sites.

After Judge Lancaster ordered the sentence of home confinement, the prosecution appealed, alleging that he failed to consider general deterrence -- the concept that the threat of sentence will deter others from committing the same crime.

In 2007, a three-judge panel led by Judge Fisher found in a 2-to-1 decision that Judge Lancaster's sentence was unreasonable and sent the case back for a new hearing. However, Mr. Tomko asked for a hearing before the entire Third Circuit.

In the majority opinion, the court found that the government's allegation that Mr. Tomko bought his way out of prison was improper.

"Although we agree with the Government that the sort of 'gilded cage' confinement imposed here has a certain unseemliness to it, we do not believe that this condition of sentence, by itself, constitutes an abuse of discretion," Judge D. Brooks Smith wrote.

In the dissent, the judges described Mr. Tomko's 8-acre mansion in Venetia "with a home theater, an outdoor pool and sauna, a full bar, $1,843,500 in household furnishings, and $81,000 in fine art."

Paula Reed Ward can be reached at pward@post-gazette.com or 412-263-2620.
First published on April 21, 2009 at 12:00 am