U.S. Attorney's Office
Eastern District of Pennsylvania
(215) 861-8200
March 3, 2015

Philadelphia Businessman Pleads Guilty in Corruption Case

PHILADELPHIA—Sam Kuttab, 55, of Wyncote, Pennsylvania, pleaded guilty today to participating in a scheme to have a Philadelphia Municipal Court Judge use his judicial position to influence the outcome of a small claims case in the Philadelphia Municipal Court, announced United States Attorney Zane David Memeger. Kuttab, a Philadelphia area businessman, pleaded guilty to an information charging him with one count of mail fraud.

According to documents filed in the case, on September 30, 2011, Kuttab notified former Philadelphia Municipal Court Judge Joseph Waters that he had a small claims case pending in the Municipal Court. Kuttab’s company, Donegal Investment Properties, was sued by another company, identified as Company B, for $2733 in unpaid fees for security services. According to the documents, Waters then used his judicial position to achieve an outcome favorable to Kuttab. Specifically, Waters called two other Municipal Court judges assigned to the case on different dates, explained his relationship with Kuttab, and asked them to rule in Kuttab’s favor. In September 2011, the Municipal Court Judge identified in the information as Judge #1 granted Kuttab’s company a continuance in the case over Company B’s objection after receiving Waters’ call. In November 2011, the Municipal Court Judge identified in the information as Judge #2 adjudicated the case in Kuttab’s favor after Waters called and said that Kuttab was “a friend of mine.” After losing the case, the plaintiff threatened to appeal the verdict, and Waters mediated a settlement in which Kuttab agreed to pay $600 to settle the case. After attorney fees, Company B received $400 rather than the $2733 for which he sued.

Kuttab admitted today that he and Donegal gained a secret advantage through a series of secret ex parte communications between Waters and the other Municipal Court judges, some of which were recorded in FBI wiretaps, and that he participated in the scheme with Waters to cause favorable rulings for Donegal.

In September 2014, Waters plead guilty for his role in fixing this case as well as fixing a criminal case conceived as part of an FBI sting operation. He was sentenced to 24 months in prison.

U.S. District Court Judge Juan R. Sanchez scheduled a sentencing hearing for a date in July 2015 to be determined. Kuttab faces a maximum statutory sentence of 20 years in prison, a fine of up to $250,000 and up to three years of supervised release.

The case was investigated by the FBI and is being prosecuted by Chief of the Public Corruption Unit Richard P. Barrett and Assistant United States Attorney Michelle L. Morgan.

An Indictment, Information or Criminal Complaint is an accusation. A defendant is presumed innocent unless and until proven guilty.

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