Guilty plea to scam, weapons charges

A 44-year-old Chester County man - who played a role in the 2009 disbarment of a West Chester lawyer - pleaded guilty on Monday, Oct. 6, in federal court to crimes that authorities said enveloped Chester County and beyond.

Istvan Merchenthaler, whose addresses have included Downingtown, West Chester, Coatesville, and Glenmoore, admitted committing wire fraud, possession of destructive devices, aggravated identity theft, money laundering, filing false tax returns, and interstate transportation of stolen goods, U.S. Attorney Zane David Memeger said in a press release. Sentencing is expected in January.

From about May 2006 to February 2013, Merchenthaler claimed to be the founder of PhoneCard USA, a company that was purportedly a “premier distribution source” for prepaid phone cards and cell phones. In reality, Merchenthaler operated a “Ponzi” scheme, bilking about 200 investors of more than $2 million and using much of the money for purchases such as a $69,000 Mercedes Benz, court records said.

During 2008 and 2009, when Merchenthaler received about $380,000 and $993,000 respectively in illicit proceeds from the phone card scam, he reported “no taxable income,” records said.

Merchenthaler was first charged in March 2012 and agreed to pretrial release conditions. Months later, in October, he disappeared in a stolen vehicle and was not apprehended until February 2013 in Maryland, federal officials said. Some of the later charges against him resulted from car thefts and weapons possession while he was on the lam in states that included North Carolina, records said.

Other charges against Merchenthaler stemmed from the March 2013 discovery of a cache of explosives in his storage locker in East Whiteland Township. The arsenal included improvised explosive devices (IEDs) – 60 PVC pipes and 400 cardboard tubes, “all center-primed with flash powder – a 9mm Cobray M-11 semi-automatic machine pistol, and ammunition, records said.

In addition to allegedly conning victims, Merchenthaler was also reportedly on the receiving end of a scam. Court records for the Pennsylvania Supreme Court show that Merchenthaler figured prominently in the 2009 disbarment of Daniel L. McCaughan, a West Chester attorney who received a two- to four-year prison sentence after a jury convicted him in 2009 of misusing another client’s money.

The family of Merchenthaler, who was arrested in San Paolo, Brazil, on drug-trafficking charges in April 2004, hired McCaughan, who bragged that he had “dealings with an influential Columbian law firm specializing in international drug-trafficking cases,” records said.

Merchenthaler’s family paid McCaughan $150,000, which was supposed to be transmitted to the Colombian firm through an intermediary in Canada. Although McCaughan insisted he sent the money, he acknowledged that he did not obtain the proper documentation “to adequately safeguard it.” Merchenthaler was released in February 2005 with representation from a law firm that had no ties to McCaughan, records said.

Merchenthaler faces a mandatory minimum of two years in prison with a maximum possible statutory sentence of 230 years, a three-year period of supervised release, a fine of up to $5.5 million fine, and a $2,200 special assessment. Restitution and forfeiture may also be ordered, the press release said.

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