The former Florida-based investment banker Kevin McCarty reported to prison Tuesday and began serving an eight-month term for failing to report his wife’s corrupt activities while she was a Palm Beach County commissioner.
Mary McCarty, who will be sentenced in federal court June 4, has pleaded guilty to conspiring to deprive constituents of her honest services, including using her influence to steer bond business to her husband while he worked at Bear, Stearns & Co. and Raymond James & Associates Inc. No charges have been brought against the investment banks.
Kevin McCarty, 60, pleaded guilty in January, shortly after his wife resigned from the County Commission and issued a public statement apologizing for her crimes, which also included accepting deeply discounted or free hotel rooms from companies doing business with the county.
Though Kevin McCarty was sentenced in late March, he was given time to put his affairs in order before actually having to start his term in prison.
The couple lived in Delray Beach, a municipality in Palm Beach County.
The McCarty case touched off investigations into bond-financing activities in Palm Beach County and Delray Beach, which also was named in court documents.
An attorney for Delray Beach issued a report that found no evidence of wrongdoing among city officials or employees. The report did recommend that the city select underwriters competitively, and that it document the procedures used to select its underwriters.
Palm Beach County’s clerk and comptroller, Sharon Bock, conducted a comprehensive examination of the county’s debt issuance practices over the past five years.
Late last month Bock issued a report saying current debt management practices in Palm Beach County cost taxpayers as much as $5.38 million in extra interest and other expenses, because of the way underwriters were selected, the use of negotiation to sell bonds, and the purchasing of unnecessary bond insurance.
For years, county commissioners had appointed firms to underwrite debt sales.
In issuing bonds, the wealthy, gilt-edged county lacked the “oversight, internal controls, and transparency necessary to best serve the interests of the taxpayers of Palm Beach County,” Bock said in a 132-page report.