Three Years in Prison for Mclaughlin; No Restitution for CHA

Judge says McLaughlin picked the pockets of CHA residents to line his own pockets

In a sentencing hearing that seemed to take on elements of a criminal trial, Federal Judge Doug Woodlock elevated the sentence of former Chelsea Housing Authority (CHA) Director Michael McLaughlin and gave him three years in prison.
“I find for a sentence of 36 months in prison followed by two years of supervised release,” he said after engaging the court for an hour in a one-man treatise on the seriousness of public corruption.
McLaughlin – nor his Attorney Tom Hoopes – desired to make any comment after the sentencing, but McLaughlin did address the court.
He said he did many good things at CHA and made many positive investments, but let a longstanding conflict with state officials guide him off the path.
“Had I reported the salary, no question [state officials] would have tried to revise it and I thought they had no right to it, but I should have reported it,” he said. “What troubles me most is all the good I’ve done over the years while employed in various agencies, I undid all that because of…this. It was stubbornness and ego that drove me to do this.”
The judge, however, didn’t buy that at all.
McLaughlin must report to prison no later than Sept. 13th, and Hoopes requested that he be allowed to serve his time close to home at Devens Federal Prison.
It was a dramatic departure from what was expected just one month ago when McLaughlin showed up before Woodlock on June 14 expecting to get a sentence of 12 month or less – and was personally advocating for probation-only. Things took a dramatic turn at that June hearing and Woodlock called for more investigation into the matter, opening the case up for the intensive and extensive hearing that occurred yesterday, July 17th.
The hearing took most of the day, starting at 9 a.m. and lasting until nearly 3 p.m. During the final hour of the hearing, Judge Woodlock told why he felt McLaughlin deserved more time in prison than what federal prosecutors had recommended.
Taking a route pretty much no one could have foretold, he included the concerns of tenants in the CHA – who had become quasi-victims in the case, being allowed to have two tenants (Jean Falco and Mildred Valentin) testify to the judge about ongoing conditions caused by McLaughlin.
“This is more serious than just a transparency offense,” Woodlock elaborated. “We’ve heard from two individuals who speak for the residents of the CHA about the facilities. It’s money taken away from the programs that are needed and programs that are always under stress anyway…Whether there is a quid pro quo there, I don’t know…This is what I know; through total self-interest Mr. McLaughlin committed very serious crimes. If Ms. Valentin is accurate – and I tend to believe she is – then he lined his own pockets here while picking the pockets of the people in the CHA. That is something that increases the culpability and the seriousness of the offense.”
He also said that jail didn’t necessarily mean deterring McLaughlin, 67, from committing future crimes. Rather, he said he saw jail time as a general deterrent.
“What do we have to say to those who are in Mr. McLaughlin’s position who have an accommodating or acquiescing Board of Directors who function as enablers for his picking the pockets of tenants at the CHA?” he asked rhetorically. “If, as I think it is, that we’re dealing with an economic crime, then it’s economic calculus. It says there will be consequences sufficient, but not greater than necessary, to people in…any public area – you do this and this will happen to you.”
Then, later, “What would happen to a person without the advantages of what Mr. McLaughlin had and who picks the pocket of an agency to the tune of just shy of $900,000? No question. That’s a serious jail crime. I guess it can be said here much is given and much is expected. A sentence of some serious jail time should be imposed.”
He even added – though he said he meant it without any irony – that McLaughlin would likely be a good inmate.
“My expectation is he will fit well in a prison setting – perhaps one of those prisoners who really take to the system,” he said.
However, Woodlock – while accommodating tenants and taking the unprecedented step of hearing CHA attorneys in their quest for victim status – stopped short of granting the CHA more than $500,000 in restitution in order to immediately help fix up neglected housing units.
“I don’t believe restitution is appropriate,” he said to CHA Attorney William Codinha. “I can’t – as a matter of law – find your clients to be a victim in this case.”
Codinha’s clients were a rare mix – public housing administration united with a grass-roots tenant organization – the Chelsea Citywide Tenants Association (CCTA). That organization came about just this spring when McLaughlin’s plea deal became public, leading to large-scale outrage amongst those who had lived in the CHA under McLaughlin’s tenure.
Tenant organizer Gladys Vega – of the Chelsea Collaborative – told reporters after the sentencing that they were disappointed in the restitution ruling, but felt the day was an overall victory.
“For us, it’s a tremendous victory that he’s going to do three years of jail time,” she said outside Boston Federal Court. “A few months ago we didn’t think he would get any jail time, or just a small sentence possibly. We thought he would just get away with it. Sure, we’re disappointed that we didn’t get restitution. Yes, we hoped the judge would be compelled. We wanted that money to go to fixing up the tenants’ apartments. These weren’t checks for the tenants. This was to fix serious problems in the residences like mold, cockroaches, rodents and other things that are still a problem in Chelsea Public Housing. It’s easy to say ok to no restitution if you don’t live in public housing, but not so easy if you do. But really, we are overjoyed by the sentence of jail time.”
That erupted into a spontaneous chant from about 40 residents gathered around her of “Jail Time, jail time, jail time.”
Attorney Jeff Sacks – who represented the CHA with Codinha (both from Nixon Peabody), said they felt the judge had been fair and open minded in hearing their arguments – which were rather unprecedented in a public corruption case.
“We thought restitution was a long shot,” he said. “The determination of a victim status was at issue. We had to push hard just to be heard on that issue. The judge was open to the argument and he intertwined his decision with the testimony of the residents. He was very fair.”
That was echoed by CHA Board Chair Tom Standish and CHA Attorney Susan Whalen.
“I thought the judge was very, very fair,” said Standish.
All said they have other avenues for collecting money, and are “still at it” as it pertains to the restitution aspect of the case.
Much of the day, though, was devoted to the mundane and repetitive questioning of witness James McNichols – a former CHA Accountant and McLaughlin family friend, and mystery witness Frank Stewart – an electrician at the Lowell Housing Authority who didn’t offer too much help in the federal case but will likely figure large in the ongoing state case.
What McNichols revealed on the stand was more than possibly ever could be contained in one news story, and much of it seemed to pertain to ongoing, accompanying criminal investigations conducted by state Attorney General Martha Coakley. Sources told the Record that it was in the course of that investigation that McNichols decided to come clean, allegedly, and reveal the ultimate truth that McLaughlin had obstructed justice. That revelation came this past March and was the key element in upping McLaughlin’s sentence in the federal crimes.
McNichols had testified in a state Grand Jury proceeding earlier this year that McLaughlin ordered him to commit an obstruction of justice offense in lying to investigators and destroying records.
McNichols had a checkered history in the case, having lied numerous times to investigators and Grand Juries. On the stand, he detailed numerous hearings and official inquiries that he participated in, noting that he lied at many to protect McLaughlin.
“What was the reason you didn’t initially tell the truth about Mr. McLaughlin,” asked Attorney Codinha.
“I was trying to protect Mike,” said McNichols. “I was trying to keep his name out of everything I could at that point…At that time, I said I didn’t want to cross Mike and he wasn’t a guy you said ‘no’ to. Mike was big on loyalty…He didn’t like to be said ‘no’ to and I didn’t want to make him angry…Michael McLaughlin and I had a conversation in the conference room at the CHA about the destruction of the time cards. He said he would never roll on me and I said I would swear on my father’s grave that I would never roll on him.”
Then Codinha asked hime why he decided to break that oath on his father’s grave and allegedly tell the truth about the destruction of records and about the political fund-raising activities.
“I felt Mike had used me to insulate himself,” said McNichols. “The reason I told the truth was I couldn’t hold it in anymore and [investigators] pressured me time and time again. I lied about it time and time again…It got to the point where we were going into a state grand jury and the prosecutor sat me down and said he didn’t believe me…I couldn’t really hold it in anymore and continue to lie. I already had lied to one grand jury and I was about to lie to a second if I continued on. I wanted to make things right and tell the truth.”
While Hoopes put on a valiant show in cross examining McNichols, it wasn’t enough for Judge Woodlock to throw out the testimony. He credited McNichols’s testimony on the destruction of records as being accurate and it was a major factor in the higher sentencing – as it added an obstruction of justice charge.
“Family is fundamental to Mr. McLaughlin and friends, and associates are fundamental,” he said. “Throughout all of this, there is a desire to elevate the value of loyalty…That’s a good value, but when it conflicts with the truth – truth trumps it and that’s what happened here. Prevailing on a service of loyalty, Mr. McLaughlin encouraged Mr. McNichols to engage in conduct that I find to be obstruction of justice.”
Sources said investigations into political fund-raising involving McLaughlin and others continue at the state level in what might end up one day being an even bigger case.