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Former Pennsylvania Treasurer Barbara H. Hafer was indicted Wednesday on charges she made false statements to federal investigators in an effort to hide the fact she received $500,000 in consulting fees, payments that began weeks after she left office, the Department of Justice said Thursday.

The company that made the payments did business with the Treasury Department while Hafer was in office, according to a grand jury indictment.

If convicted, the 72-year-old could face a maximum penalty of up to 10 years in prison.

The U.S. Attorney's Office said the interview with Hafer that led to her being charged is part of an ongoing, long-term investigation being conducted jointly by the FBI and the IRS into "pay-to-play" activities involving the Pennsylvania state government.

Prosecutors also charged Philadelphia-area businessman Richard Ireland with 79 counts, alleging he tried to bribe former Treasurer Rob McCord with over $500,000 in secret campaign contributions between 2009 and 2014, according to The Associated Press.

McCord, a Democrat, took office in 2009 and resigned last year before pleading guilty to attempted extortion involving campaign contributions to his failed gubernatorial campaign in 2014. AP reports.

A grand jury indicted Hafer Wednesday in Harrisburg. According to the news release, she is charged with two counts of making false statements to federal agents.

Hafer, who began her political career as a Republican but switched to the Democratic Party, served two terms as the state's elected treasurer from 1997 to 2005, and prior to that she served two terms as state auditor general from 1989 to 1997, the release states. The indictment alleges that during a May 9, 2016, meeting with investigators, Hafer concealed a financial relationship she had with a business person identified in the indictment only as "Person #1."

The contract: Investigators showed Hafer a signed contract between her consulting firm, Hafer & Asociates, LLC, and Person #1's company, but Hafer denied receiving payment on the contract, the release states. The indictment alleges Hafer started the consulting firm after leaving office and advertised the firm as one that "capitalize(d) on her experience in the government and financial areas."

Hafer did receive payment, the indictment states, beginning within weeks of her leaving office as state treasurer in February 2005, in monthly amounts of $41,667 over the course of a year, totaling $500,000, which was the amount outlined in the contract.

According to the indictment, Person #1 had financial relationships with multiple businesses, including fee-sharing arrangements with entities that provided asset management services to the state Treasury Department while Hafer was in office. The investigation found that payments began before the contracts were signed, the news release said.

The indictment alleges Person #1 caused a company he or she was associated with to make the above-listed payments to Hafer's firm in the first year she was in business, and that Person #1 caused an additional $175,000 to be paid to her firm between 2006 and 2007.

The agreement was that Person #1 and his or her companies would make the payments to Hafer's firm, but the deal was not contingent upon the firm "achieving any particular result," the indictment said.

The investigation: Hafer told investigators she did not know the person who signed the agreement on behalf of the company associated with Person #1, and that Hafer and Associates, LLC had four staffers, earned $100,000 to $200,000 annually and the business closed in 2008. The investigation revealed, however, that the $500,000 paid to Hafer and Associates in 2005 accounted for 73 percent of the company's total revenue that year. The investigation also uncovered the subsequent payment of $175,000 during 2006 and 2007, the indictment said.

The joint FBI-IRS investigation, which also includes the U.S. Department of Treasury, began in May 2016 and targeted mail fraud, honest wire service fraud, money laundering and conspiracy to commit the listed offenses by persons and entities who did business with the Pennsylvania State Treasury, the indictment said.

U.S. Attorney's Office public information officer Dawn Mayko said she could not comment any further either on the Hafer indictment or the FBI-IRS investigation into state corruption.

— Reach John Joyce atjjoyce2@yorkdispatch.comor on Twitter at @JohnJoyceYD

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