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Crime

Riva man pleads guilty to extortion, faces up to 20 years in prison for state contract hiring scheme

A Riva man is the latest defendant convicted in a federal case involving leadership at the state’s human resources department during the administration of former Gov. Martin O’Malley.

Kenneth Coffland, 67, faces up to 20 years in federal prison after pleading guilty June 7 to extortion affecting interstate commerce. He is scheduled to be sentenced Oct. 13 at the U.S. District Courthouse in Baltimore alongside Isabel FitzGerald, a former deputy secretary of operations at the state Department of Human Resources, who earlier this month pleaded guilty to a related bribery charge.

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In Coffland’s plea agreement prosecutors said FitzGerald had used her influence in the department to pressure an unnamed state-contracted information technology company that once employed Coffland into rehiring him with an improved salary and bonus structure.

The IT company operated a data center for the state that was “used to host various applications that provided social welfare benefits under various federal and state programs,” prosecutors said in a news release.

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Before resigning in 2011, Coffland worked for the company and had been promoted to its hosting director in 2010.

In 2006, FitzGerald worked in what is now known as the Maryland Department of Human Services as deputy chief information officer under then-Gov. Robert Ehrlich’s administration, and then became the chief information officer under O’Malley in 2007. She resigned in 2011 before returning a year later to be the department’s deputy secretary for operations.

In 2010, Coffland developed a “close personal relationship” with FitzGerald, while she was overseeing the IT company’s contract with the state, according to Coffland’s plea agreement.

After each resigned from their respective positions in 2011 and FitzGerald returned to the state human resources department the following year, she persuaded the IT company to hire Coffland back, the plea agreement said.

The company “did not want to rehire Coffland,” according to the plea agreement, but did so after FitzGerald spoke with the company about its “problematic performance.” She said it risked losing its contract with the state unless Coffland was rehired. She said she believed he “would be able to fix the performance issues,” according to the agreement.

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Coffland negotiated a higher compensation package, the agreement says, as he and FitzGerald communicated about the pressure she was applying to get him rehired in personal emails.

Coffland rejected an offer that was a slight improvement over his previous salary of $171,000 and a potential bonus of 20% of his salary, and eventually negotiated a salary of up to $300,000 with a potential quarterly bonus of up to $50,000. He also demanded to be hired as an independent contractor rather than an employee, according to the plea agreement.

In court, Coffland admitted he had “used his knowledge of the pressure that FitzGerald placed” on the company “to force it to accept salary and bonus demands that were far in excess of what he had previously received for holding the same position, and far more than” what the company “wanted to pay him.”

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FitzGerald, 52, of Annapolis, pleaded guilty to a bribery charge related to the scheme earlier this month. In her plea agreement, lawyers agreed she had received a total of $35,230 in bribes while working as a consultant between her tenures at the Department of Human Resources, also directing $3,080 toward Coffland. At the time, she was indirectly employed by the agency, working as a contractor for the Montgomery County Department of Health and Human Services.

After pleading guilty, she faces up to 10 years in a federal prison.

Two men who ran a different technology company with state contracts in Maryland also were indicted in the case on bribery and extortion charges alongside FitzGerald and Coffland. Assistant U.S. Attorneys Sean R. Delaney and Jefferson McClure Gray, who are prosecuting the case, agreed earlier this year to defer prosecuting Steven Maudlin and James Pangallo based on their cooperation with investigators.

Maudlin and Pangallo were indicted for allegedly arranging with FitzGerald to get subcontracts with the state steered toward their Indiana-based company in exchange for the total of $35,230 in payments to her, while she worked as a consultant, according to FitzGerald’s plea agreement.


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