Former Scranton Businessman Sentenced to 46 Months in Prison for Failing to Surrender and on Firearm Charges
WILKES-BARRE—The United States Attorney’s Office for the Middle District of Pennsylvania announced that Joseph P. Donahue, age 61, was sentenced today to 46 months (3 years and 10 months) in prison by United States District Court Judge A. Richard Caputo in Wilkes-Barre. Donahue was convicted on September 2, 2015, of failing to surrender for service of a federal sentence, being a felon in possession of a firearm, being a fugitive from justice in possession of a firearm, and possession of a stolen firearm after a seven-day jury trial. The 46 month sentence is to be served consecutive to the sentence in the previous case.
According to United States Attorney Peter Smith, Donahue was previously convicted in March 2010 of bank fraud, money laundering, false statements and credit card fraud after a two week trial. In December 2010, United States District Court Judge James M. Munley sentenced Donahue to 121 months’ incarceration and ordered Donahue to surrender himself to begin serving that sentence on January 4, 2011. Donahue failed to report and a warrant for his arrest was issued. He was apprehended on January 20, 2011, by United States Marshals in Los Cruces, New Mexico when he was at a motel under an assumed identity and in possession of a stolen firearm.
At trial Donahue’s defense, in part, was that he failed to surrender to begin serving his sentence because he feared that he was being unfairly prosecuted by the government. He denied any knowledge of the firearm. The jury returned a verdict of guilty on all counts after deliberating approximately 3 hours.
The evidence at the 2010 trial proved that Donahue recruited shareholders, investors and partners in businesses that the defendant owned and controlled, offering them, in exchange for their paying a share of the operating expenses, a share in the profits. Donahue obtained credit cards from financial institutions, putting the credit cards in the names of the investors, for the purpose of paying for operating expenses.
Unknown to the investors, Donahue obtained additional credit cards and loans from financial institutions in the investors’ names by obtaining on-line credit card applications and by forging their names on the applications. Donahue then used these fraudulently-acquired credit cards to incur expenses to which the investors had not consented and for which they would be liable. By forging the investors' names to loan applications, Donahue also committed bank fraud and money laundering.
Donahue has been convicted three times within 26 years by three different federal juries in the Middle District of Pennsylvania and received prison sentences from three separate federal judges. He was previously convicted after a 1989 federal trial of conspiracy and failure to comply with monetary reporting requirements. That trial involved evidence that Donahue conspired with drug trafficker Frederick “Rik” Luytjes to smuggle millions of dollars out of the United States while avoiding reporting requirements and tax consequences for Luytjes. United States District Court Judge Richard P. Conaboy sentenced Donahue to a two year term of imprisonment for those crimes.
The investigation was a collaborative effort between the United States Marshals Service and the Federal Bureau of Investigation. The case was prosecuted by Assistant United States Attorneys Todd K. Hinkley and Michelle L. Olshefski.