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Keough, 47, was freed on bail when he was first arrested last January and charged with extortion. The bail was revoked in August after a second arrest for allegedly asking witnesses against him to lie to federal investigators.

"I hope Mr. Keough's exoneration will be covered with the same intensity of the lodging of these charges," defense lawyer Daniel D. Kelly said during an interview yesterday. Keough's arraignment was postponed yesterday because he was ill, Kelly said.

Keough, who has pleaded innocent to earlier charges, is being held at the Hampshire County House of Correction.
The corruption case against Keough is one of several prompted by a five-year federal investigation into public agencies and members of former Mayor Michael J. Albano's administration. Albano has never been charged in the probe.

Yesterday's indictment includes 98 examples of alleged fraud perpetrated by Keough, including: accepting $50,000 from a Springfield Housing Authority contractor after Keough landed James Asselin, the authority director's son, a top job with the city. Asselin is now serving prison time for bilking a city job training agency of nearly $600,000 submitting phony time sheets to the shelter for hours he spent working on former state Sen. Linda J. Melconian's failed mayoral campaign in 2003 giving jobs and rooms at the shelter to two women in exchange for sex.

Melconian, who left politics in 2004, had no comment when reached at home yesterday.

Keough is charged with conspiracy, multiple counts of fraud, perjury, witness tampering, lying to federal agents and tax evasion.

Hallahan, 37, pleaded innocent to conspiracy to commit fraud and wire fraud, the latter charge related to a bogus mortgage Keough arranged for him through an unnamed "corrupt" loan officer, according to the indictment. A city employee for 14 years, Hallahan was suspended without pay from his job yesterday, according to Mayor Charles V. Ryan. Hallahan was arrested by FBI agents at his city office on Tapley Street.

Guzman was detained by U.S. Magistrate Judge Kenneth P. Neiman yesterday after Assistant U.S. Attorney William M. Welch II argued Guzman is a flight risk who once leveled a veiled threat through a witness' 12-year-old daughter. Guzman, an admitted heroin addict with a long rap sheet, is charged with conspiracy and four counts of wire fraud. The charges are related to another mortgage, and other alleged scams at the shelter.

Keough also stacked the shelter's board of directors with friends and those beholden to him to ensure compliance, according to the indictment.

Among others, he appointed his real estate lawyer, Frank A. Caruso, who allegedly paid Keough $5,000 to gain forgiveness of a city loan; Michael R. Wells, a one-time School Committee candidate whom Keough helped to get jobs with the New England Farm Workers Council and as a state probation officer; and two tenants for whom he secured rental assistance meant for the poor and homeless, even though they were neither.

In exchange, Keough's board-approved salary jumped from $40,000 to $95,000 between 1994 and 2005. His vacation time doubled to six weeks. He scored a $500 monthly car allowance, plus other bonuses including a "performance award" of $10,000 in 2001.

The indictment also accuses Keough of lifting televisions, refrigerators, mattresses and other goods from the shelter and another local charity for his $700,000 vacation home in Rhode Island. Keough allegedly recruited shelter workers and borrowed a city-owned van to transport the stolen goods on shelter time. Payroll records, including Keough's, were routinely padded, according to the charges.

Keough is accused of billing the city (which reimburses the shelter for salaries with federal grant funds) $240,000 for payments that, in part, financed personal work.

The allegations in the indictment struck familiar chords.

Sex for jobs and payroll-padding were central to a corruption probe of the Massachusetts Career Development Institute, yielding four convictions, including that of the city's former Police Commission Chairman Gerald A. Phillips, now serving a 21-month prison sentence.

The alleged fleecing of the Springfield Housing Authority to outfit primary residences and a vacation home are among allegations leveled against former director Raymond B. Asselin, other executives, contractors and the Asselin family. Thirteen have pleaded innocent in that case.

"Those common threads must lead back to someone," Welch said of the corruption cases outside the courtroom yesterday.
Keough will be arraigned on the new charges on Wednesday; Guzman, who did not have a lawyer yesterday, will return to U.S. District Court on Tuesday for his arraignment and a detention hearing.

©2006 The Republican