Good morning. The state legislature returns to Harrisburg this week with 23 days to hammer out a spending plan for the fiscal year that begins July 1. Expect to hear a lot about the minimum wage and unemployment benefits. Lawmakers also will push for lower corporate taxes. But they will run into a governor who has said he wants to raise the state's personal income tax rate, primarily for the highest earners, and tax natural gas to pay for workforce development. Legalization of recreational marijuana use also may be on the table.
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Feds level PPP fraud charges against Carlisle business owner

A Carlisle-area business owner submitted fraudulent applications for Paycheck Protection loans totaling $467,200, according to the U.S. Attorney’s Office for the Middle District of Pennsylvania.
  • Keith McConnell, 43, was charged by criminal information last week with a wire fraud and money laundering scheme involving Paycheck Protection loan applications for his Carlisle-area trucking company, KB Transportation LLC.
  • An attorney for McConnell -- Brian Platt of Carlisle law firm Abom & Kutulakis -- declined to comment.

What are the allegations: KB Transportation was not in business in 2019 and 2020, had no employees, and had no payroll expenses, according to a statement from acting U.S. attorney Bruce D. Brandler.
  • On June 5, 2020, however, McConnell certified that the company had 26 workers and had monthly payroll expenses totaling $124,800, according to the U.S. Attorney's office. McConnell applied for and received $312,000 in PPP loan proceeds.  
  • Within weeks, McConnell and others made unauthorized expenditures, including buying a home, buying two vehicles, and making stock market investments, according to the U.S. attorney's office.  
  • On Jan. 20, McConnell used KB Transportation to apply for a second PPP loan in the amount of $155,200. Those funds were not disbursed.
  • The case was investigated by the Internal Revenue Service-Criminal Investigation

What's next: According to a plea agreement filed on Friday with the U.S. District Court for the Middle District of Pennsylvania, McConnell will plead guilty to two counts of felony information.
  • In return, the government agreed to recommend a minimum sentence provided McConnell makes full restitution by the time of his sentencing.

The bottom line: The government has made a point of cracking down on alleged fraud in all of its Covid-19 relief programs, which came together quickly last year and funneled billions of dollars to individuals, companies, health care providers and others.

Gibson steps down from S&T board

Jim Gibson, a longtime Central Pennsylvania banker and founder of Camp Hill-based Integrity Bank, has resigned from the board of directors of S&T Bank, which bought Integrity in 2015. 
  • Gibson, who also had been CEO of the former Commerce Bank/Harrisburg, said he resigned so he could dedicate time to new challenges.
  • "I have several business interests that I wanted to allocate my time toward," said Gibson, 65. He declined to elaborate but said the interests were in Central Pennsylvania.
  • Gibson is a Florida resident but spends about five months a year, including the summer, in this region.
  • Gibson's resignation coincided with the resignation of Jerry Hostetter, who had been on the board of Integrity before joining the S&T board.
  • Mark Kochvar, S&T's CFO, declined to comment.

The background: S&T is in the midst of a leadership change. Its president and CEO, Todd Brice, retired at the end of March. The bank's president, David Antolik, was named interim CEO in April. 
  • The changes follow a roughly $59 million loss that S&T suffered last year due to a check-kiting scheme tied to an Ohio nursing home operator.
  • Based in Indiana in western Pennsylvania, S&T is one of the state's largest banks, with assets of more than $9.3 billion.
  • In a regulatory filing Friday, the bank noted that its chief risk officer, Ernest Draganza, is leaving the company to pursue other interests. Draganza had been chief risk officer since 2010 and began working for the bank in 1997.

Quick takes

WHO'S EXPANDING. mulá group. The York-based architecture firm opened a two-person office in Lancaster County on June 1, headed by architect John Snavely. Snavely, a 2009 graduate of Roger Williams University in Rhode Island, had been working as a project manager at Lititz-based Derck & Edson for the past five years.
  • "There is a lot of potential over here in the city and the surrounding community," said Snavely, who will be working with Morgen Woodford, a project designer, in the new office.
  • mulá group offers architecture, design and engineering services and is led by principals Joseph Mulá and Scott Summers. 

WHO'S MAKING GRANTS: The Pennsylvania Historical & Museum Commission. It has awarded $2.3 million in Keystone Historic Preservation Grants to support preservation efforts by historical and heritage organizations, museums and local governments in 21 counties. 
  • The grants come from the Keystone Recreation, Park and  Conservation Fund, which is supported annually from a portion of the state realty transfer tax revenue.
  • Cumberland, Dauphin and Franklin counties in Central Pennsylvania were among the grant recipients, according to a news release from the commission.
  • In total, 54 grants were selected from 92 eligible applications.
  • Grant amounts ranged from $5,000 to $25,000 for project grants and $5,000 to $100,000 for construction projects.
  • All grants require a 50/50 cash match and were awarded through a competitive selection process

Who is getting what: Here is how some of the money will be allocated in this region.
  • Cumberland County: South Middleton Township -- $14,700
  • Dauphin County: Historic Harrisburg Association Inc. -- $17,094;  Hummelstown Area Historical Society -- $21,000; The Fair Housing Council of the Capital Region Inc. -- $20,000.
  • Franklin County -- $12,000

WHAT TICKED UP:  Job cuts announced by U.S.-based employers. Cuts rose 7% in May to 24,586 from the 22,913 announced in April, according to the latest report from consulting firm Challenger Gray & Christmas. But that actually is good news compared to what has happened in the past year.
  • So far this year, employers have announced plans to cut 192,185 jobs from their payrolls, down 86% from the 1.4 million jobs eliminated through the same period last year, said the global outplacement and business and executive coaching firm.
  • As a tight labor market persists, workers will continue to find increasing pay and better benefits, according to the report, which can be found here.


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Compiled and written by Joel Berg

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