FBI agent testifies in Old Forge bribery case
Sep. 3—SCRANTON — As James J. Peperno Jr.'s Honda sedan pulled into a bank drive-thru one bright morning nearly three years ago, a piece of a puzzle the FBI sought to solve came into view.
They could follow the money.
The fifth day of the 57-year-old Old Forge man's federal bribery trial included testimony from the probe's case agent, Special Agent April Phillips, spanning from the investigation's origin to when agents finally approached their targets.
It also aimed to link the hundred-dollar bills used in payoffs with bank notes found in an account they said Peperno used. Of the approximately $6,000 in serialized cash Phillips testified the FBI provided to their informant, business owner Walter Stocki Jr., Peperno kept much of it.
A grand jury indictment filed in September 2021 alleged Peperno served as a middle man in a bribery scheme involving then-Old Forge council President Robert Semenza. Investigators said he took bribes from Stocki, whose North Keyser Avenue scrapyard had been embroiled in litigation brought by the borough, with intent to pass them to Semenza, who could intervene.
Peperno maintains he was hired by Stocki; his attorney, Gino Bartolai, has sought to paint him as a consultant working on the business owner's behalf.
Peperno is facing counts of charges of conspiracy to defraud the United States, federal program bribery, honest services wire fraud, violating the travel act, money laundering, false statements and perjury.
Semenza resigned in June 2021 and pleaded guilty to federal program bribery. He will testify in the trial about how he accepted bribes and cooperated in the investigation after FBI agents approached him in the fall of 2020.
Under questioning from Assistant U.S. Attorney Phillip Caraballo-Garrison, Phillips said the FBI began looking into a potential corruption case in Old Forge in January 2019, when Stocki gave them information about a meeting he had that month with Peperno.
During the meeting, Stocki previously testified, he started secretly recording Peperno once he mentioned he could help Stocki if the businessman retained his consulting firm and paid a $20,000 lump sum. As the phone recorded, Peperno called Semenza to say they were moving forward and they would support Stocki, according to recordings played earlier this week in federal court.
On one recorded meeting, Nov. 2, 2019 — a few days before Stocki was scheduled for contempt hearing in the borough's litigation — Stocki gave Peperno $2,500 in cash provided by the FBI and asked for some reassurance. Peperno called Semenza with the news Stocki was being "honorable" and now Semenza would "have to really perform."
The FBI kept watch on the meeting. After it was over, Peperno drove to a People's Security Bank & Trust branch drive-thru lane to deposit cash. The transaction was captured on bank video surveillance.
Phillips testified investigators contacted the bank and isolated that teller's drawer to confirm that the serial numbers of the bills he deposited matched those of the bills agents provided to Stocki. The account itself was held in the names of Peperno's parents.
Nov. 2, 2019, was not the first handoff of the covert investigation. Cash deposits totaling more than $1,000 were recorded on bank statements on Oct. 21 and 28, 2019, according to documents displayed in court, days investigators said undercover payments were made.
After money was deposited, the statements showed the account was soon debited to pay three credit cards. Two of those accounts were under Peperno's parents' names and the other belonged to Peperno, Phillips testified.
However, investigators then dug into billing records for each card and discovered charges in Pottsville, where Peperno traveled, Phillips testified.
Phillips also testified that a search warrant for Semenza's emails also showed evidence he tried to get Stocki's court case moved.
On Nov. 4, 2019 the date of a contempt hearing that had already been continued and two days after Peperno took money from Stocki, Peperno emailed Semenza five reasons why the case should be postponed. Among those reasons, Stocki would help the town with snow cleanup and road construction by offering heavy equipment at no charge.
Semenza emailed it to himself, which Phillips testified removed Peperno's email address from the chain, and then sent it to borough solicitor William Rinaldi.
When Peperno showed Stocki the list, he warned him against taking a photograph of it because it was "hardcore evidence," according to a recording.
In executive sessions at borough council meetings, Semenza raised working with Stocki — namely that they could make use of his machinery, testified Councilman Jim Hoover.
The proposal was met with firm disapproval by the seven-person board, he testified under questioning by Assistant U.S. Attorney Jeffery St. John. Hoover denied he had ever been offered money and said he never agreed to work with Peperno, who, on recordings, claimed to have the backing of three councilmen aside from Semenza to agree to a resolution of Stocki's troubles.
Peperno had been in contact with Hoover, he testified.
During September 2019, before Peperno allegedly collected bribes from Stocki, he sent text messages to Hoover informing him that asbestos was at the scrapyard and that additional machinery would come to the yard — should the borough wish to add "more charges on the contempt," according to text messages displayed.
Testimony will resume Tuesday.
Contact the writer: jkohut@timesshamrock.com, 570-348-9100, x5187; @jkohutTT on Twitter.
