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SUN-GAZETTE File Photo
William E. Nichols, Jr. at the Trade and Transit Center II.
A criminal investigation of a former Williamsport finance director and general manager of River Valley Transit alleges he directed payments to so-called “ghost employees” of the city, a neighboring transit authority and the pleasure riverboat Hiawatha — which now has different management.
These payments were directed under the management of William “Bill” Nichols Jr., 71, of Williamsport, and started as identified in court documents in 2011, during the administration of Mayor Gabriel J. Campana, an affidavit by Special Agent Kevin M. Schofield stated.
The allegations against Nichols, who worked for eight city administrations, are detailed in a multi-page report as part of the court that went before a statewide grand jury and laid out why the office of Attorney General Michelle Henry filed felony charges of theft by failure to make required disposition of funds received and tampering with public words related to misuse of city, state and federal funds.
The “ghost employees,” a name used for the grand jury, were first identified when River Valley Transit was asked to assume management of Endless Mountains Transportation Authority, a neighboring transportation authority that serves Bradford, Sullivan and Tioga counties, according to the affidavit.
The statewide grand jury heard testimony that EMTA paid RVT an annual $250,000 management fee, a fee that was to be used to pay salary-related expenses for 34 unnamed RVT employees who were also performing EMTA duties, court documents revealed.
In addition to this fee, EMTA also maintained a separate line-item in the budget for the payment of “management salaries.”
Furthermore, Nichols, along with other RVT and City of Williamsport employees, including RVT’s chief financial office and planning manager, were listed by EMTA as among a “Lead Management Team.” As such, these nine named individuals received separate salaries from EMTA in addition to their paycheck from the city, the affidavit states.
However, in addition to the nine employees listed as EMTA’s Lead Management Team (most of whom did in fact perform a great deal of additional work related solely to EMTA management), the grand jury identified two other individuals who were placed on the EMTA payroll who played no role whatsoever in managing EMTA, and performed no tasks whatsoever related to the entity, the affidavit states.
Moreover, the grand jury heard from a witness who works for the Williamsport Finance Department who testified that she received a $300 biweekly paycheck from EMTA despite having no job responsibilities related to its management.She stated that she questioned her immediate supervisor about the checks but never received an answer, the court document revealed.
Additionally, she received this monthly check for a couple of years, until a former mayor became aware of it and told her to stop accepting these additional payments, according to the court document.
Another Department of Finance employee testified that he, too, received an EMTA paycheck, as well as a Hiawatha paycheck, in addition to his paycheck from the city related to his position in the Finance Department. He admitted that he performed no work whatsoever on behalf of either the paddlewheeler or EMTA, according to the court document.
Meanwhile, Hiawatha payroll records indicate that this witness was paid $165 every two weeks from 2012 to 2019, and was paid a total amount of $34,320 from Hiawatha during that time period, a chart provided for the grand jury showed.
The witness stated that he received the money via direct deposit into the same bank account as his city paycheck.
He recalled having a conversation with Nichols about the extra paychecks he was receiving. Nichols told him he did not believe he received adequate compensation from the city, and that he had the ability to pay him additional money through the Hiawatha, the affidavit states.
This witness stated that a former mayor became aware of the additional paychecks that he was receiving and told him to stop accepting them around November 2019, the document states.
The grand jury learned that the proper protocol for obtaining a pay increase for a city employee requires a formal request for City Council to approve the pay raise. Nichols made no such requests for legitimate pay raises for either of these two witnesses, the affidavit states.
The grand jury also heard testimony from a former city mayor. He recalled a conversation that he had with Nichols in 2016 wherein Nichols suggested that the mayor could make some extra money doing extra work for EMTA.
The mayor declined, and said that he did not feel that would be appropriate. Just prior to his term as mayor ending in late 2019, it was brought to his attention that the two referenced Finance Department employees were receiving additional paychecks.
He, along with a former Human Resources director, confronted both of them about this and told them to terminate these additional programs.
The grand jury heard testimony that an analysis of the payroll records provided by EMTA indicated that the following payments in the form of either salary or bonus checks were distributed directly from EMTA to these two employees from 2013 to 2019.
These payments for witness one amounted to $63,550 and for witness two $70,050 between those years, the affidavit states.
The grand jury learned that Hiawatha employees were paid with city funds, the affidavit states.
During his time at the helm of this the payments were directed by Nichols to be taken from the city – supported by its taxpayers – instead of the Hiawatha account, according to the court document.
The grand jury learned that RVT utilized DePasquale Staffing Services, a temporary staffing agency, to staff both RVT and the Hiawatha with employees.
The grand jury learned that a vast majority of the employees that were assigned to the Trade and Transit Centre budget were, in fact, dedicated to the riverboat as employees who did not perform work for any city agency, the affidavit states.
Nichols formal arraignment is scheduled for Nov. 8. He has been released on his own recognizance.
The case is being prosecuted by Chief Deputy Attorney General Brian Zarallo.