[Philadelphia] Attorney, Firm To Pay $155,000 Penalty To FEC

2 Jul 2009 // Allentown attorney John Karoly will have to pay $155,000 to settle allegations that his law firm illegally funneled money to the presidential campaign of former U.S. Representative Dick Gephardt of Missouri, according to the Federal Election Commission.

It had accused Karoly and his firm of reimbursing employees for $13,000 of contributions to Gephardt's campaign in 2003. Federal law bars corporate contributions to candidates and prohibits people from contributing money under another person's name. The FEC says the settlement includes no admission of wrongdoing by Karoly's firm but requires it to pay the penalty within six months.

An attorney who represents Karoly, Mark Elias, issued a statement in response to the penalty.

"This complaint was filed five years ago by a former employee," said Elias. "Mr. Karoly has contested the complaint ever since. The settlement released today makes clear that he admitted no violation of wrongdoing of any kind, but wanted to avoid the burdens of continued litigation, which could have gone on for another five years."

Gephardt is not accused of any wrongdoing.

In an unrelated case, Karoly is facing federal charges of tax fraud and money laundering. He's accused of failing to report millions of dollars in taxes and also ripping off a church and charity. He's also facing charges in a separate case in which officials say he tried to forge his late brother's will.