FORMER CITY EMPLOYEE SENTENCED FOR MILLION DOLLAR INK CARTRIDGE SCAM
Jun 09, 2015
PHILADELPHIA – Calvin Duncan, 63, a former Philadelphia Water Department employee, was sentenced today to 24 months in prison and three years of supervised release for a scheme to defraud the City of Philadelphia of more than $1 million. Duncan, of Philadelphia, worked as a mailroom clerk and was responsible for purchasing supplies, including printer ink and toner cartridges, for PWD’s administrative offices. Between January 1, 2006 and January 5, 2012, Duncan ordered printer ink and toner cartridges, for which the City of Philadelphia paid approximately $1,368,091.19, falsely claiming that the cartridges were for PWD employees’ use. Instead, Duncan sold the cartridges for approximately $545,412.79 and had them shipped to his co-conspirators using PWD’s UPS shipping account. Duncan pleaded guilty, on August 9, 2013, to five counts of mail fraud. [-]
In addition to the prison term, U.S. District Court Judge Jan E. DuBois ordered restitution in the amount of $1,368,091.19 and ordered forfeiture of $545,412.39. Duncan’s co-conspirators, Derek and Danita Willis, who own Laser Cartridge Plus, Inc. in Russellville, Arkansas, pleaded guilty on April 29, 2014. Derek Willis was sentenced to 36 months in prison; Danita Willis was sentenced to 12 months and 1 day in prison.
Amy Kurland, Inspector General for the City of Philadelphia, testified at the sentencing hearing for Derek Willis and Danita Willis and described the harm as follows:
“The City of Philadelphia could have used that money for a number of things. Approximately 500 students could have been educated. Teachers could have been hired to educate that number of students. That money would have funded the entire Fire Inspection Department at L&I for a year. The money could have also been used for equipment, for body cameras for 200 officers. …When something like this happens, when people are able to steal that amount of money from the city, it makes the citizens lose confidence in government and lose confidence in the city’s ability to function appropriately.”
The investigation was initiated by the Philadelphia Office of the Inspector General and included the Federal Bureau of Investigation. The case was prosecuted by Assistant United States Attorney Tomika N. Stevens Patterson.
Non-profit executive charged with defrauding organization of more than $90,000
May 01, 2015
Philadelphia, April 30, 2015 – City of Philadelphia Inspector General Amy Kurland and United States Attorney Zane Memeger announced that Rodnell Griffin, 67, was charged by indictment, which was unsealed yesterday, with defrauding the local non-profit for which she worked of more than $90,000. Griffin, of Philadelphia, was charged with ten counts of wire fraud in connection with ATM withdrawals from non-profit bank accounts following an investigation by the Philadelphia Office of the Inspector General and the Federal Bureau of Investigation (FBI).[-]
According to the indictment, between 2007 and 2013, Griffin used the non-profit’s corporate ATM card to withdraw more than $85,000 in funds, and she incurred more than $5,300 in associated bank fees. The indictment further charged that Griffin made several ATM withdrawals at local casinos, Sugarhouse and Parx, and used the non-profit’s funds for personal expenses.
“Charitable organizations that receive City funding and other valuable tax benefits exist to help members of our community who may have no other avenue of assistance. When non-profit employees choose to act in their own self-interests, rather than in furtherance of the charity, already disadvantaged people have to suffer even more,” said Inspector General Amy Kurland. “This case represents another step in our fight to protect charitable interests and taxpayer money. I would like to thank our federal law enforcement partners for their continued cooperation and shared commitment.”
Griffin formerly served as Executive Director of the Hunting Park Neighborhood Advisory Committee (HPNAC), a registered tax-exempt organization that provides essential goods and services to some of Philadelphia’s most underserved residents. The organization, located in the Hunting Park section of Philadelphia, offers food, clothing and other assistance to individuals and families in need. HPNAC is primarily funded by the City of Philadelphia Office of Housing and Community Development through a federal grant administered by the U.S. Department of Housing and Urban Development.
If convicted, Griffin faces a possible advisory guideline sentencing range of 30 to 37 months in prison, a three-year period of supervised release, restitution to the organization and a $1,000 special assessment. The case is being prosecuted by Assistant United States Attorney Elizabeth Abrams.
Inspector General to be honored at annual Law Enforcement Appreciation Dinner
Apr 17, 2015
Philadelphia, April 17, 2015- The OIG is excited to announce that Inspector General Amy L. Kurland was recently named a recipient of Peace Islands Institute’s second annual Law Enforcement Appreciation Award. This award honors law enforcement officials who demonstrate extraordinary commitment to their role in protecting communities, resolving conflict, and advancing public outreach and education. [-]
Deputy Commissioners Richard Ross and Kevin Bethel, Special Agent in Charge (SAC) of the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) Essam Rabadi, and Assistant U.S. Attorney Robert Zauzmer were also recognized. An awards dinner will be held at the Sheraton Philadelphia Downtown Hotel on April 23rd, where Zane David Memeger, U.S. Attorney for the Eastern District of Pennsylvania, will deliver the evening’s keynote address.
Established in 2011, Peace Islands Institute (PII) is a non-profit think tank and peace-building movement that believes violence can be pre-empted through dialogue and educational platforms. By engaging people in a “forum of mutual respect and collaboration,” the institute works to build diverse relationships, combat intolerance, and promote public service. To learn more, visit peaceislands.org/mission-and-vision/.
City Integrity Officers Take Oath of Office
Mar 30, 2015
Philadelphia, March 26, 2015 – Mayor Michael A. Nutter and Inspector General Amy L. Kurland presided over a ceremony in City Hall this morning in which the City of Philadelphia’s 40 Integrity Officers swore an oath of office. Judge Gary Glazer of the Court of Common Pleas administered the oath. [-]
“The City’s Integrity Officers represent our first line of defense against fraud, corruption, abuse and misconduct,” said Mayor Michael A. Nutter. “These dedicated employees set the highest ethical standards in City government and serve as resources for their colleagues to seek guidance and support in their daily tasks as City employees.”
Each City department has a trained Integrity Officer who works closely with the Office of the Inspector General (OIG). Integrity Officers serve as crucial points of contact for OIG investigators and they provide invaluable research and knowledge in support of the OIG’s work. All of the Integrity Officers were hand-picked by the Inspector General based on experience and a proven track record of ethical service.
“The OIG’s success is a direct result of our strong Integrity Officer Program,” said Inspector General Kurland. “They have courageously accepted additional responsibilities in furtherance of our mission, and we greatly value their contribution.”
At the ceremony, Mayor Nutter and Inspector General Kurland presented this year’s OIG Integrity Award to Special Agent Vicki Humphreys of the Federal Bureau of Investigation. SA Humphreys worked jointly with OIG investigators on several different cases, resulting in many government fraud and corruption convictions and millions of dollars in restitution for the City.
“We cannot accomplish our mission alone – teamwork is essential to our success,” Inspector General Kurland remarked. “The OIG, all of our Integrity Officers, Administration officials, our law enforcement partners and the thousands of honest City employees must work together to give Philadelphians the government that they deserve. I want to thank Special Agent Humphreys for her exceptional efforts in making our city a more ethical place.”
City of Philadelphia Releases OIG Annual Report
Mar 30, 2015
Philadelphia, March 26, 2015 – The City of Philadelphia released the Office of the Inspector General’s 2014 Annual Report, which shows that during 2014, the Office of the Inspector General (OIG) saved or recovered $6.4 million for the City and that OIG investigations have also led to the termination or resignation of 19 City employees and the arrest or indictment of 21 individuals at the Integrity Officers’ Swearing-in Ceremony. [-]
“The Office of the Inspector General is an integral part of this Administration’s on-going efforts to maintain the highest standards in City government and works diligently everyday to send the message that corruption and misconduct will not be tolerated in Philadelphia,” said Mayor Michael A. Nutter. “I want to thank Inspector General Amy Kurland and the OIG team for their commitment to enhancing the public’s confidence and trust in City government.”
The $6.4 million in savings and recovery comes from City employees via pension disqualifications, demotions, suspensions and DROP program forfeitures, through fines, assessments and recoveries from business that violated minority-business requirements, and from funds returned to the City through restitution.
“The City’s investment in good government has proven to be financially sound. In 2014, we were able to save and recover approximately four times our annual budget on behalf of the City and its residents,” said Inspector General Amy L. Kurland. “The OIG will continue working hard to ensure that City departments, agencies and employees are doing the right things and that businesses are abiding by City contracts.”
Over the last seven years, the Office of the Inspector General has helped the City save or recover a total of about $58 million. According to the OIG Annual Report, investigations since 2008 have lead to the termination or resignation of 250 employees and the arrest or indictment of 75 individuals.
Many of the OIG’s cases in 2014 relied on close collaboration between the Law Department and other City departments, as well as law enforcement partners, including the District Attorney’s Office, the Philadelphia Police Department, the Federal Bureau of Investigation and the United States Attorney’s Office.
The report is available online at the OIG’s website atwww.phila.gov/ig/Report/2014%20Annual%20Report.pdf.
Former Non-Profit Executive Pleads Guilty to Stealing Funds Intended to Help Homeless
Mar 13, 2015
Philadelphia, March 12, 2015 – Nathaniel E. Robinson, 62, of Philadelphia, pleaded guilty to charges that he used funds intended to help the homeless to pay for his own personal and living expenses. The case was initiated by a tip to the Philadelphia Office of the Inspector General and was also investigated by the FBI. It is being prosecuted by Assistant United States Attorney Karen L. Grigsby. The charges were announced last July by United States Attorney Zane David Memeger and Philadelphia Inspector General Amy Kurland. [-]
Robinson was the Chief Program Officer at SELF, Inc. He was charged along with Erica N. Brown, SELF’s Chief Operating Officer, with theft from a program receiving federal funds. According to the charges, between 2006 and 2010, Robinson allegedly used his corporate American Express credit card at SELF to charge approximately $154,309 of personal expenses. Robinson reimbursed a total of $2,594.30 before his employment was terminated. Today, Robinson admitted that he stole at least $5,000 of SELF’s funds for personal use.
“Every organization that receives taxpayer funding must act as responsible stewards of that money. That duty is even more important in a case like this, where funds were designated to help some of Philadelphia’s residents who are most in need,” said Inspector General Amy Kurland. “This case sends a strong message that misappropriating taxpayer money will not be tolerated. I would like to also thank our federal law enforcement partners for their close cooperation in this investigation.”
According to the indictment, Robinson used the corporate American Express card to pay for car rental charges in Philadelphia and elsewhere; repairs to his personal car; dining charges in Philadelphia, Disney World, Orlando, and numerous other cities; lodging charges, including charges at hotels on weekends in the Philadelphia area as well as charges for lodging in the Dominican Republic and in Mobile, Alabama, where Robinson has family; travel expenses, including airfare for himself and a family member; charges at a variety of stores including DSW Shoe Warehouse, the Boot Barn, Boot City, Nike, Foot Locker, Modell’s, Maron Chocolates, World Embroidery, Disney’s Ear Port, Circuit City, Best Buy, IKEA, Sears, and Walmart; parking tickets; legal fees; and entertainment charges at places such as Morey’s Pier, Clementon Park, and Six Flags Great Adventure.
Robinson will be sentenced by Honorable Berle Schiller on June 8, 2015. He faces a maximum possible sentence of 10 years in prison, restitution, up to three years of supervised release, and a $250,000 fine.
Mayor Signs Executive Order Reauthorizing Office of the Inspector General
Oct 23, 2014
Mayor Signs Executive Order Reauthorizing Office of the Inspector General
Oct 07, 2014
Philadelphia, October 7, 2014 – Mayor Michael A. Nutter signed an Executive Order reauthorizing the Office of the Inspector General, recognizing the important role the agency has played in rooting out fraud, corruption and mismanagement in City government. The new Executive Order better aligns the OIG’s legal mandate with the array of new initiatives in which it has engaged and clarifies whistleblower protections. It also celebrates the 30th anniversary of the founding of the agency.[-]
“An expanded Office of the Inspector General has been the cornerstone of this Administration’s efforts to change the culture and reputation of City government,” Mayor Nutter said. “OIG investigations have led to millions of dollars in savings and recoveries, but the Office’s work goes beyond the story told by these monetary impacts. At its most fundamental level, the OIG exists to bolster public confidence in government. This new Executive Order ensures that the Office will have the tools it needs to continue its important work for the next 30 years and beyond.”
Former Mayor Rev. Dr. W. Wilson Goode Sr. first established the OIG in 1984, then called the Office of Performance Assessment, to combat more effectively fraud, abuse, waste and mismanagement in City government. In 1994, then-Mayor Edward G. Rendell strengthened the Office’s investigative abilities by giving it the power to subpoena documents and testimony. In 2009, Mayor Nutter gave the OIG operational and budgetary independence, ensuring that OIG had the freedom and support to aggressively pursue investigations.
Until now, the OIG has operated under a series of Executive Orders that do not reflect the growth and scope of activities undertaken by the Office during the Nutter administration. Under Inspector General Amy L. Kurland, the OIG regularly conducts criminal investigations in cooperation with federal and local law enforcement agencies. The office has also formed a unit to monitor City contracts for fraud and violations of the City’s anti-discrimination and disadvantaged-business regulations.
The new Executive Order strengthens confidentiality provisions and enhances protections on whistleblowers to prevent retaliation and to ensure that City employees feel comfortable reporting misconduct. It also updates the roles of departmental Integrity Officers, who serve as liaisons between OIG investigators and City agencies by forwarding complaints to the OIG and assisting in investigations.
“Under Mayor Nutter’s mandate to clean up the culture in City Hall, the OIG has secured millions of dollars in savings and recoveries for Philadelphia taxpayers. And more importantly, we have sent a clear message that corruption will not be tolerated,” said Inspector General Kurland. “At the same time, we have much more work left to do. This Executive Order renews our mandate, but we still call on City Council to safeguard this office for years to come by passing legislation that guarantees our office’s independence.”
Legislation introduced by Councilman James Kenney would make the OIG an independent City of Philadelphia agency, strengthening existing protections to guarantee its autonomy.
Philadelphia DHS Worker Charged with Stealing Close to $18,000 in SEPTA Tokens
Oct 06, 2014
Philadelphia, October 6, 2014 - A joint investigation by the Philadelphia District Attorney’s Office Public Corruption Task Force and the Philadelphia Inspector General’s Office has led to the arrest of 30-year-old Shamira Hawkins-Worthey. Hawkins-Worthey, of the 3000 block of N. 9th Street, is now facing 1576 counts of Theft, Forgery and Tampering with Public Records charges. Hawkins-Worthey worked for the City of Philadelphia as a Department of Human Services (DHS) Social Worker Services Manager, and is charged with submitting fraudulent overtime expenses and stealing SEPTA fare tokens from the agency.[-]
Shamira Hawkins-Worthey has been employed by the city since November 20, 2006, and her responsibilities included providing services to her DHS clients. One of the services required that she obtain SEPTA fare tokens for those clients. These tokens are provided to children, parents and family members who must commute to court hearings, medical appointments, visitation and other official events consistent with the Department’s child welfare mission. DHS purchases the tokens at full price from SEPTA, and protocol requires that social workers submit written requests citing the case number of their client, identifying the intended recipient of the tokens, detailing the reason for the request and the amount of tokens being requested.
In September of 2013, a DHS Administrative Supervisor noticed that Hawkins-Worthey had requested and received a total of 300 SEPTA tokens during a two day period–which was an unusually high request. Further investigation revealed that those requests were for cases that were inactive or closed.
The Inspector General’s Office then conducted an audit of SEPTA token requests made by Hawkins-Worthey, and it was discovered that for nine months beginning January in 2013 she submitted 640 requests and received 11,474 tokens totaling $17,784.20. Of those requests, 366 contained supervisor signatures that were confirmed as forgeries. Several forms contained signatures of supervisors who were absent or on leave, and many of the DHS cases that Hawkins-Worthey cited on the request forms were either closed, inactive or did not exist.
During this investigation, Hawkins-Worthey was reassigned to an administrative position within DHS and was instructed by one of her supervisors that she was not permitted to work overtime. Despite this prohibition however, Hawkins-Worthey submitted three Authorization for Overtime Slips. An investigation into these slips revealed that Hawkins-Worthey had forged her supervisors’ signatures on these requests and a review of Hawkins-Worthey’s ID Swipe card for those days revealed that she did not gain entry by using her card nor was she encountered by others who did work those days. A subsequent DHS audit of Hawkins-Worthey’s overtime slips revealed that she had requested overtime for 76 cases between April and October of 2013. Of the 76 cases, 20 cases were determined to have been closed and 8 cases did not exist at all in the database. The fraudulent overtime for that time period amounted to a total of $6,372.34.
Shamira Hawkins-Worthey’s theft and fraud cost the City of Philadelphia’s Department of Human Services a total of $24,156.54.
“I have no words for the actions of this person,” said District Attorney Seth Williams. “Instead of helping some of the most vulnerable people in our city, she chose to use her position with DHS to line her own pockets. It’s sad and very, very wrong. I commend Inspector General Kurland and her office for their excellent work on this case.”
“All City employees have an obligation to be responsible stewards of taxpayer dollars. That obligation is even more sacred when funds were designated to help some of Philadelphia’s residents who are most in need,” said Inspector General Amy L. Kurland. “I would like to thank District Attorney Williams and the Philadelphia Police Department for their assistance in this case. It demonstrates the importance of the close partnerships the Office of the Inspector General has forged with law enforcement agencies, including the District Attorney’s Office. We continue to work side-by-side to safeguard Philadelphia residents’ trust in their government.”
The defendant turned herself into authorities this morning and she is currently being processed by Central Detectives.
City of Philadelphia releases OIG annual report
May 13, 2014
Philadelphia, May 13, 2014 – The City of Philadelphia released the Office of the Inspector General’s 2013 Annual Report, which shows that during 2013, the OIG saved or recovered $10.9 million for the City and that OIG investigations have also led to the termination or resignation of 28 City employees and the arrest or indictment of 10 individuals.
“The Office of the Inspector General is an integral part of this Administration’s on-going efforts to maintain the highest standards in City government and to ensure tax dollars are spent properly,” said Mayor Michael A. Nutter. “The OIG has time and again sent the message that corruption and misconduct will not be tolerated in Philadelphia.”
The $10.9 million in savings and recovery comes from City employees via pension disqualifications, demotions, suspensions and DROP program forfeitures, through fines, assessments and recoveries from business that violated minority-business requirements, and from funds returned to the City through restitution.
“The investment of Philadelphia tax dollars into good government practices has paid off many times over. In 2013, we were able to save and recover more than seven times our annual budget on behalf of the City and its contract workforce,” said Inspector General Amy L. Kurland. “The OIG will continue working hard to ensure that City departments, agencies and employees are doing the right things and that businesses are abiding by City contracts.”
Over the last six years, the Office of the Inspector General has helped the City save or recover a total of $45.8 million. According to the OIG Annual Report, investigations since 2008 have lead to the termination or resignation of 193 employees and the arrest or indictment of 54 individuals.
The OIG’s Contract Compliance Unit also achieved significant successes in monitoring businesses that do work for the City, including imposing the first involuntary debarment of a City contractor for violations of City regulations designed to foster greater participation of minority-, women- and disabled-owned business enterprises (M/W/DSBEs). The Unit reviewed more than $100 million worth of City contracts in 2013.
Many of the OIG’s cases in 2013 relied on close collaboration between the Law Department and other City departments, as well as law enforcement partners, including the District Attorney’s Office, the Philadelphia Police Department, the Federal Bureau of Investigation and the United States Attorney’s Office.
“Collaboration has played a key role in our success,” Inspector General Kurland added. “Working together, we continue to change the culture of City government and protect the reputation of thousands of honest City employees who come to work every day ready to serve Philadelphia residents.”
The report is available online here
Million dollar scam comes to a close with guilty pleas from husband and wife
Apr 29, 2014
Philadelphia, April 29, 2014 - United States Attorney Zane Memeger and Philadelphia Inspector General Amy L. Kurland announced that the remaining two defendants pleaded guilty to their participation in a scheme to steal more than $1 million in printer ink cartridges from the Philadelphia Water Department (PWD) in federal court.[-]
“This case shows our Administration’s unwavering commitment to the fight for honest government. The City of Philadelphia will continue to seek out wrong-doing within local government and by those who work with our Administration. Our message is clear - corruption and theft will not be tolerated,” said Mayor Michael A. Nutter. “I’d like to thank the Federal Bureau of Investigation and U.S. Attorney Memeger for their partnership on this case and Inspector General Kurland and her team for their diligent efforts on behalf of Philadelphia’s taxpayers.”
Derek Willis, 49, and Danita Willis, 35, of Russellville, Ark., pleaded guilty to five counts of mail fraud, obstruction of justice and perjury for knowingly making false statements to a federal grand jury.
The guilty pleas bring to a close a multi-year investigation that was initiated when a City employee reported patterns of suspicious purchases to the Office of the Inspector General (OIG).
“This investigation demonstrates how important the thousands of honest City employees are to our efforts to safeguard taxpayers’ trust. This case started because of a tip from an honest City employee who had the courage to do the right thing,” Inspector General Kurland said. “The OIG then teamed up with the Federal Bureau of Investigation to conduct a joint investigation. Philadelphia residents and taxpayers are served best in cases like this, when different agencies all work together in the fight against public corruption.”
The Willises owned Laser Cartridge Plus, Inc. (LCP), a business located in Russellville. They were contacted by Calvin Duncan who, at the time, worked as a mailroom clerk in the PWD. As part of his responsibilities, Duncan was responsible for mail deliveries and purchasing supplies, including printer ink and toner cartridges, for the PWD’s administrative offices.
Duncan submitted requests for approval to purchase printer ink and toner cartridges, falsely claiming that the cartridges were for PWD employees. After receiving the cartridges from vendors – at the City’s expense – Duncan sold them to LCP at prices significantly lower than those usually charged by ink and toner cartridge vendors. The Willises knew that the cartridges were stolen.
The scam resulted in the City paying about $1,368,000 on purchase orders and shipping costs for ink and toner cartridges that were never used by the City. The Willises paid Duncan, who pleaded guilty in 2013, about $545,400, which was not due him.
The Willeses are scheduled to be sentenced on October 10, 2014.
The Willises each face an advisory sentencing guideline range of 33 to 41 months in prison and must pay restitution to the City of $1,368,000. Both will also face a period of supervised release.
Inspector General honors City attorney for recovering more than $270,000 in bounced checks
Apr 11, 2014
Philadelphia, April 10, 2014 - Inspector General Amy L. Kurland awarded the City of Philadelphia’s third annual Integrity Award to Ann Agnes Pasquariello, Divisional Deputy Solicitor, for her work in recovering more than $270,000 from businesses that paid for business licenses and construction permits with bad checks.[-]
“I want to congratulate Ann Pasquariello on receiving the Integrity Award for her dedicated service and her aggressive campaign to recover money owed to the City from bounced checks, in addition to her daily duties,” said Mayor Michael A. Nutter. “Ann saw businesses taking advantage of the City and was determined to enforce the City’s rules and fees for business permits and licenses. Her commitment is an excellent example of going above the call of duty and supporting ethics and good government.”
An Office of the Inspector General report released in 2013 found that the City had accepted more than $500,000 in bounced checks over the course of a year. The report pinpointed poor communication between different City departments as hurting efforts to collect on these debts.
After the report was released, Pasquariello implemented its recommendation and launched an aggressive enforcement campaign targeting business owners who have bounced a high number of checks over a long period of time. She worked closely with the OIG, the Department of Revenue and the Department of Licenses and Inspections, which issue business permits, in her collection effort.
As a part of her collection efforts, Pasquariello pushed businesses to enter into payment agreements for the bounced checks with the City. In total, 17 businesses have signed payment agreements and recovered more than $270,000 from 14 businesses. Additionally, the City also revoked the licenses and permits of businesses that refused to cooperate with the City’s collection efforts or violated their payment agreements in four cases.
In one enforcement action, a business that had bounced more than 200 checks for permits and licenses repaid more than $100,000 to the City.
“Ann took our report and ran with it,” said Inspector General Kurland. “Ann’s work ensures that businesses can’t take advantage of the City and essentially get these permits for free.”
Ann Pasquariello added, “I’m grateful for the honor the OIG has bestowed on me. I think our work has sent a strong message to the business community that bouncing checks to the City can’t be a part of the way anyone does business.”
The Integrity Award is presented each year to recognize a City employee who has gone above and beyond the call of duty to foster ethics and good government in Philadelphia by the Office of the Inspector General. Pasquariello was presented with the award during the Integrity Officers swearing-in ceremony April 3rd. Integrity officers take on this work in addition to their other responsibilities in their departments.
As part of the ceremony, Inspector General Kurland also honored the work of Frank Leo, Streets Department Sanitation Program Administrator. Leo is the City’s longest-serving integrity officer, holding the position since the OIG was founded in 1984.
“Throughout my career, I’ve always tried to promote ethics and good government at the Streets Department, and I’m honored for this recognition,” Leo said. “I’m honored for this recognition.”
City of Philadelphia and PGW Reach No-Fault Agreement With Danella Companies, Inc.
Jan 07, 2014
The City of Philadelphia and Philadelphia Gas Works reached a no-fault agreement with Danella Companies, Inc., a PGW contractor, as a result of an Office of the Inspector General investigation into all PGW and City paving contracts. Danella Companies, Inc. (Danella) agreed to pay more than $2 million to the City and PGW to settle claims that it overbilled for construction materials for paving jobs. Danella denied any wrong doing as part of the no-fault settlement and cooperated with the investigation.
“This agreement sends a clear message to contractors that the City of Philadelphia will not tolerate being overcharged,” said Mayor Michael A. Nutter. “I want to commend Inspector General Amy Kurland and the Inspector General’s Office staff for their diligence and hard work.”
Danella, a Plymouth Meeting based company which was doing business at the time as Danella Construction Corp., had contracts with PGW to reconstruct and pave City streets as part of the utility’s infrastructure-modernization efforts to replace aging underground cast iron pipes with more modern, polyethylene pipe. These projects generally involved work that covered entire blocks. The contracts were valued at more than $22 million, a portion of which was for paving.
An OIG investigation, undertaken at the request of PGW, found significant discrepancies in the amount of construction paving material for which Danella billed PGW and the amount of material Danella actually installed. As part of the investigation, PGW obtained about 400 core samples from paving work at various projects since 2010. The core samples – which were analyzed by the OIG, PGW engineers and an independent engineering firm – established that rather than the required amounts of concrete and asphalt, the roadbeds in many instances contained less.
A review of Danella’s invoices also found that because Danella had not provided the required amount of concrete and asphalt specified in the paving contracts, it had significantly overbilled PGW approximately $1.75 million for construction materials not installed.
“We were happy to work closely with PGW to ensure that contractors meet their obligations,” said Inspector General Amy L. Kurland. “At a time when every dollar matters, it’s important that companies that have the privilege of doing business with the City and City-related agencies bill only for the work they have properly completed.”
As part of the settlement, Danella has agreed to pay $1,836,000 to PGW, the amount Danella overcharged plus the cost of the core samples. In addition, Danella will pay the City $525,000 as a penalty and agreed to enhance significantly its corporate compliance program to protect against future shortages. Danella has agreed to guarantee the work for three years against any problems as a result of the shortages.
“This settlement is a win for PGW ratepayers,” added PGW President and Chief Executive Officer Craig E. White. “It means that we can dedicate every dollar possible to upgrading our infrastructure while keeping rates low for our customers.”
The full Settlement Agreement and Executive Summary of the investigation can be found on the OIG’s website: www.phila.gov/ig/reports
OIG Investigation Finds 13 City Employees In Violation Of the Home Rule Charter
Jan 02, 2014
Following an investigation, Philadelphia Inspector General Amy Kurland announced that 13 Assistant Recreation Leaders in the Department of Parks and Recreation have been terminated or have resigned for violating the Philadelphia Home Rule Charter by improperly working for other government agencies while being employed by the City of Philadelphia.[-]
“Every City employee must follow the rules and be held accountable when they do not,” said Mayor Michael A. Nutter. “I’m pleased that the Inspector General’s Office is stepping up enforcement of this Charter provision and ensuring that it is being applied fairly and consistently across City departments.”
Of the 13 employees, ten are full-time school teachers, two are U.S. Postal Service workers and one is a Pennsylvania Attorney General’s Office investigator. Their terminations from City employment do not affect these full-time jobs.
Section 8-301 of the Home Rule Charter forbids City employees in most circumstances from holding a “position of profit” with another government agency, including a second job. Civil Service Regulation 33.022 also prohibits dual employment with other government agencies.
The thirteen employees all worked as permanent, part-time Assistant Recreation Leaders, assisting in the management of different City recreation centers, while holding full-time jobs for other government agencies. Many of the School District employees worked part time for the City during the school year and added extra hours during the summer.
The investigation into dual employment among City employees, which the Office of Inspector General began in March at the request of the Department of Parks and Recreation, is part of a new initiative to step up enforcement of the Charter provision and make sure it is applied fairly across the City.
"Our City’s underfunded municipal pension system is one of the biggest challenges Philadelphia faces,” Inspector General Kurland said. “The dual-employment prohibition is an important tool to prevent people who already have a government job from looking to the City for a second pension.”
Before recommending the terminations, the OIG requested and received, an official Solicitor opinion from the Law Department, which clarified that the dual-employment provision applies to all permanent City employees, including those who work only part time. The Inspector General’s Office also worked with Michael DiBerardinis, Deputy Mayor for Environmental and Community Resources, who issued a notice to Parks and Recreation staff over the summer reminding them of the dual-employment prohibitions.
The Inspector General’s Office is continuing to investigate dual-employment violations and has also asked City Controller Alan Butkovitz to participate in a joint investigation and City-wide audit to improve enforcement.
The relevant City Charter provision and Civil Service Regulation are included below for reference:
• Charter Section 8-301 – Other Offices or Positions: Except as otherwise provided in this charter, no person shall hold more than one office or position of profit, whether elective or appointive, under the City and no such person shall hold such office or position while holding any other office or position of profit in or under the government of the United States, of the Commonwealth of Pennsylvania, or of any county, city or other political subdivision thereof, other than the office of notary public, any office in the military or naval service of the United States or of the Commonwealth of Pennsylvania, or any ex officio office held by virtue of another office or position.
• Civil Service Regulation 33.022 – Other Governmental Positions: Except as otherwise provided in the City Charter, no employee shall hold any other office or position of profit in or under the government of the United States, of the Commonwealth of Pennsylvania, or of any county, city or other political subdivision thereof.
Philadelphia IG Releases Report Calling For Strengthening City's Oversight In Contracting
Oct 25, 2013
The City of Philadelphia Office of the Inspector General (OIG) released a policy recommendation report for improving the City’s risk management in contracting. The City worked with the OIG’s new Contract Compliance Unit in crafting improvements to the procurement process and has already begun implementing changes in response to the report.
“I thank Inspector General Amy Kurland and her Contract Compliance Unit for their detailed work done in exposing wrongdoing by a general contracting firm doing work at the Philadelphia International Airport,” said Mayor Michael Nutter. “But the IG went far beyond catching one contractor’s wrongdoing. She exposed long-standing weaknesses in the City’s oversight of our contracting processes and made specific recommendations to reduce the chances of unscrupulous contractors taking advantage of city contracting and damaging taxpayers’ interests. On the basis of her work, we are now strengthening our oversight protocols, which will save taxpayer dollars and ensure that quality work is done on all city contracts.”
The policy recommendation report follows an investigation by the OIG of Hart Enterprises & Associates, a general contracting firm owned and managed by John Hart. The OIG found that the company made numerous material misrepresentations in paperwork submitted to the City for five construction and demolition contracts awarded between 2011 and 2012. The City did not properly screen the paperwork for potential fraud, awarded the contracts to Hart, and lost along with Hart’s workers approximately $297,000.
Hart forged and submitted ten surety bonds to the City. Valid surety bonds protect the City from losing funds if a contractor is unable to complete a City bid or project. But Hart successfully deceived the City, obtained the contracts, and passed on significant financial harm and risk. The company also misrepresented its financial history and City tax status.
Despite these facts, the company was paid more than $275,000 in City contract funds.
The company caused approximately $153,000 in losses that the City was left to address with limited remedies. Additionally, Hart Enterprises & Associates failed to pay its workforce more than $123,000 in minimum wages and owed more than $21,000 in taxes to the City.
OIG has already helped the City and Hart’s workers recoup more than $97,000 from Hart and his company, and OIG will continue to work with other City departments to pursue more than $200,000 in additional recovery.
As a result of the OIG’s investigation, John Hart was arrested on Wednesday and is awaiting prosecution by the District Attorney’s Office for ten felony counts of forgery and four misdemeanor counts of unsworn falsifications to authorities. OIG has also recommended that the City initiate debarment proceedings against Hart.
The OIG investigation highlighted several weaknesses in the City’s contracting process. Most notably, the report points out that many of the representations made by potential contractors are never independently verified by City officials, providing ample opportunity for dishonest companies to hide negative information and secure valuable City contracts. The report found communication and coordination problems across City departments, which prevent the City from recouping money from contractors for their outstanding wage or tax obligations.
The policy recommendation report outlines several ways to improve the process, including more stringent contractor qualification review, better communication in the payment hold process, and independent verification of supporting documentation, like surety bonds. With improved screening and communication, the City can better identify and avoid risky contractors like Hart Enterprises & Associates. The City has begun to implement the report’s recommendations including: bond verification protocols; increased information access and sharing; and improved communications between City departments.
This investigation and accompanying policy report is the most recent work of the OIG’s new Contract Compliance Unit, an ongoing OIG initiative focused on protecting the integrity of the City’s contracting process.
“Our Contract Compliance Unit approaches cases by detecting and analyzing what went wrong, helping to recover funds for the City, and identifying steps the City can take to prevent similar problems in the future,” Inspector General Amy Kurland said. “We expect the impact of this approach to be invaluable to the City and its taxpayers.”
So far, the Contract Compliance Unit has seen great success. In June 2013, an investigation by the Unit led to the first involuntary debarment of a City contractor, JHK Inc. The OIG investigation revealed that JHK received City money from a prime contractor, now known as Corizon Health Inc., only for the use of JHK’s name and woman-owned business certification in order to make it appear as if JHK was performing work on the contract when, in fact, it was not.
The Contract Compliance Unit also helped the City negotiate a settlement with Corizon. The company paid the City $1.85 million and adopted new corporate procedures to ensure compliance with the City’s antidiscrimination policies in the future. The Unit has also spearheaded similar settlement agreements concerning violations of the City’s anti-discrimination policies with more than a dozen companies, including Aramark Correctional Services, UGI HVAC Inc., and William Betz Jr. Inc.
“The OIG Contract Compliance Unit is focused on prevention,” said Inspector General Kurland. “We hope our successful investigations will deter people from violating City policies and defrauding the City, and we can prevent fraud from the ground-up.”
More information about the work of the Contract Compliance Unit and the OIG’s policy recommendation report can be found on the OIG’s website at: http://www.phila.gov/ig/contractcompliance
City of Philadelphia Debars JHK, Inc. After OIG Investigation
Jun 25, 2013
The City of Philadelphia issued a notice of debarment on June 21, 2013 to Jamie Kovacs and her company, JHK. Inc., for falsely representing its role as a women-owned subcontractor in an agreement with Corizon Health Services, Inc., a prime health care contractor with the City's Prison System. This is the first involuntary debarment in the City's history.[-]
"Our Administration will continue to seek qualified minority, women and disable-owned businesses to play a significant role in all of its contracts but we will not stand for companies or individuals trying to cheat the system," said Mayor Michael A. Nutter. "I am incredibly proud of the work that Amy Kurland and the entire Office of the Inspector General have done to end sham contracting in the City of Philadelphia. Their work is a prime example of the City's commitment to fair business practices and anti-discrimination policies."
After a lengthy investigation, the Office of the Inspector General found that prime contractor Prison Health Services, now known as Corizon Health, Inc., subcontracted with JHK Inc. to make it appear that JHK — a City-certified, woman-owned business — had provided pharmaceutical supplies to the Philadelphia Prison System when JHK was paid only for the use of its name and its woman-owned business certification.
"This debarment sends a strong and definitive message: The City of Philadelphia will not tolerate businesses that circumvent the City's antidiscrimination policies," said Inspector General Amy L. Kurland. "We will continue working with Procurement, Finance and the Law Department to ensure that legitimate M/W/DSBEs have a fair shot at the contracting opportunities they deserve."
Catherine Paster, First Deputy Director of Finance stated in the debarment notice that JHK, Inc. had provided no credible evidence to dispute the facts established by the OIG. Paster noted that in addition to appearing as a sham woman-owned subcontractor, JHK admitted to the City's Debarment Panel that the company had done nothing to provide services to PHS other than placing its name on paperwork submitted to the City.
To comply with the City's anti-discrimination policies, M/W/DSBEs must perform a commercially acceptable function under any subcontracting agreement. OEO defines a commercially acceptable function as performing, managing or supervising meaningful work or supply efforts that are distinct from other parts of the contract and consistent with the anticipated cost of business.
In July 2012, Corizon entered into a $1.85 million settlement with the City and agreed to strengthen its corporate compliance program by reviewing all of its subcontracting agreements to ensure compliance with City anti-discrimination policies.
Corizon also appointed an M/W/DSBE Compliance Team Member to ensure that M/W/DSBE requirements are fully understood by Corizon personnel. Corizon has also developed a corporate-level vendor diversity program.
Prime Contractors Used Sham Minority Subcontractor on 19 City Contracts
May 06, 2013
A Philadelphia Office of the Inspector General investigation of 19 Philadelphia Housing Development Corporation contracts has found that 11 prime contractors used JHS and Sons Supply Company to circumvent the City’s antidiscrimination requirements by paying JHS only for its name and its minority-owned business certification. So far, the City has signed a no-fault settlement agreement with one prime contractor and has hammered out compliance agreements
with eight other prime contractors.
“It was clear from the beginning that this problem was widespread,” said Inspector General Amy L. Kurland. “These settlements meet our goal of ensuring that companies comply with our antidiscrimination requirements. Our mission is to bring companies into compliance, not to put them out of business.”
Investigators first discovered that prime contractors were using JHS to circumvent the City’s antidiscrimination requirements in PHDC’s weatherization contract with UGI HVAC Inc. In that case, the OIG established that William Betz Jr. Inc. had colluded with JHS and UGI to make it appear that JHS had provided equipment and supplies when Betz was in fact the supplier.
In January 2012, the City signed a no-fault settlement agreement with UGI, which agreed to pay the City $100,000, increase minority-business participation in future contracts and adopt new policies and procedures to comply with the City’s antidiscrimination requirements. The City also removed JHS from the Office of Economic Opportunity’s registry of certified minority-owned businesses.
In October 2012, the City signed a no-fault settlement agreement with Betz, which agreed to pay the City $128,000, comply with the provisions of an Equal Opportunity Procedures Policy and voluntarily declare itself ineligible to participate in City contracts for two years.
The case led to the adoption of Executive Order 03-12, which strengthened the City’s previous antidiscrimination policies and made it more difficult for companies to hire sham minority-, woman- and disabled-owned businesses (M/W/DSBEs) as subcontractors. All of the contracts in which JHS posed as a working minority subcontractor were signed before JHS was removed from the OEO registry.
After concluding the UGI case, the OIG continued investigating contracts involving JHS and Betz, and found that JHS provided no services to the 10 other prime contractors that had identified it as a subcontractor for 18 PHDC contracts. Those contractors are Burke Plumbing & Heating, Inc.; Clements Brothers and Sister, Inc.; DMC Environmental Group, Inc.; Buzz Duzz Plumbing, Heating, & Air Conditioning, Inc.; Edward Hughes and Sons, Inc.; Martin Johnson Plumbing and Heating, Inc.; Paragon Contracting; J.J. Magnatta, Inc.; John Stevenson, Inc.; and S. Murawski & Sons. The contracts
ranged in value from $100,000 to $350,000.
In most cases, Betz facilitated the arrangement between JHS and the prime contractor, providing JHS’ minority business certification and the supplies necessary to complete the job. As a result, Betz received more than $640,000 worth of business that was intended for legitimate minority-owned companies. JHS received at least $70,000 for acting as a pass-through.
Most of the prime contractors that used JHS as a minority pass-through were small businesses that did not fully understand the City’s antidiscrimination requirements. The companies reached out to other contractors or suppliers for advice on how to comply with the requirements when they should have sought help from the Office of Economic Opportunity.
While the settlement agreement with UGI references a specific instance in which the City believed UGI had violated the City’s antidiscrimination policies, the compliance agreement with the remaining prime contractors is general in scope and does not include a payment to the City.
The purpose of the compliance agreement is to clarify the contractors’ legal obligation to provide meaningful opportunities for M/W/DSBEs and to educate the contractors about the assistance that the Office of Economic Opportunity can provide when searching for a qualified M/W/DSBE. Moving forward, these prime contractors now understand what is required under Executive Order 03-12 and are expected to follow the City’s policies on M/W/DSBE participation.
Bounced Checks Cost City More Than $347,000, OIG Finds
Apr 04, 2013
Inadequate revenue collections and a severe breakdown in communications among City departments about how to process bounced checks cost the City nearly $347,000 in uncollected revenue between June 2011 and June 2012, according to a report released today by the Philadelphia Office of the Inspector General, which called for an overhaul of the City’s check-processing procedures.
“If stronger procedures had been in place, the City would have been able to collect significant revenue at a time when every penny matters,” said Inspector General Amy Kurland. “It is clear that the City needs to rethink its approach to accepting checks for payment.”
Correcting the bounced check problem is one of the initial projects for the City’s first ever Chief Revenue Collections Officer Thomas Knudsen, who is slated to begin work at mid-month. Mayor Michael A. Nutter named Knudsen to the new post on Wednesday.
“I want to thank the Inspector General for her office’s excellent work and diligence with which her team investigated this issue. Inspector General Kurland has highlighted a very serious problem all across City government, a problem which must be addressed immediately.
“The Chief Revenue Collections Officer and the new Revenue Commissioner, Clarena I.W. Tolson but also every department head in City government must fully support these greatly needed reforms while sending a message to individuals and business owners that we won’t tolerate bounced checks. We will collect what is owed to us just like any other business or government entity. For some a bounced check is an unfortunate mistake, for others it’s a way of doing business. We will not accept this behavior any longer,” Mayor Nutter said.
The OIG analyzed the City’s procedures for processing bounced checks at the request of the Revenue Department, which had identified numerous payments to the Department of Licenses and Inspections that banks returned to the City due to insufficient funds. Upon discovering significant discrepancies, the OIG expanded its inquiry to 10 additional departments and agencies, including the Health, Public Property, Streets, Records and Law departments.
From June 2011 to June 2012, the City failed to adequately address almost $574,000 in returned checks that Revenue forwarded to those City agencies for further action. As a result of miscommunication and ineffective collections efforts, the OIG has estimated that the City lost between $347,000 and $511,000 in revenue in those 12 months.
In addition to miscommunication and ineffective collection procedures, the OIG identified several more factors that contributed to the problem. Miscommunication among departments led to accounting deficiencies, making it appear that some debts remained outstanding when the departments had in fact received payment. Additionally, it took at least three months for departments to receive bounced checks, leaving them unaware that they had not been paid for services already provided.
Delays and a lack of communication among departments also allowed individuals and businesses to pass bad checks to the City repeatedly while continuing to receive City services. In the past six years, 13 individuals or companies have passed 692 bad checks to the City totaling $390,318.
L&I accounted for the majority of the loss, with more than $346,000 in unaddressed debt. In one case, a Delaware-based company presented 197 bad checks to purchase licenses and permits from L&I valued at more than $38,000. Because L&I processed the documents before the checks cleared and did not follow up to make sure the funds were transferred, the company received the licenses and permits at no cost.
The OIG has recommended that the City improve every phase of the payment-collections process by strengthening its procedures:
- Departments should scrutinize checks before they are processed to reduce the risk of accepting bad checks. Specifically, the OIG recommends that departments purchase electronic check scanners that can instantaneously determine whether the account has sufficient funds.
- Departments should put a fixed procedure in place to ensure consistent and effective collections. By implementing debt collection and recovery software, the City can increase revenue collection dramatically. The Philadelphia Parking Authority uses such a program to independently monitor delinquent checking accounts and automatically retrieve the outstanding funds when they are available.
- The City should take stronger enforcement action against individuals who have repeatedly submitted bad checks, including criminal prosecution when warranted.
- The Chief Collections Officer should foster greater cooperation among departments and ensure that all bounced checks are addressed appropriately.
“While the findings of this investigation are concerning, we are confident that the City’s new Chief Collections Officer, Thomas Knudsen, will correct these deficiencies by implementing an effective and efficient collections process,” Kurland said.
The full policy recommendation report can be found on the OIG’s website: www.phila.gov/ig/reports.
Former City Pharmacist Pleads Guilty To Drug Trafficking Charges
Apr 03, 2013
Arlene Gerson, 46, of Philadelphia, pleaded guilty today to conspiracy to distribute oxycodone and attempted distribution of oxycodone, announced United States Attorney Zane David Memeger. Sentencing has been set for July 12, 2013 before the Honorable Stewart Dalzell of the United States District Court for the Eastern District of Pennsylvania. Gerson faces an advisory sentencing guideline range of 57 to 71 months in prison.[-]
Gerson was working as a pharmacist at various locations, including a health clinic run by the City of Philadelphia known as Health Center #5. Gerson used that position to access blank prescription pads, doctors’ identification information, patient identification information, and patient health insurance information in creating phony prescriptions. Gerson or one of their associates then took the false prescription to a pharmacy to be filled. Gerson and her associates then allegedly sold a portion of the controlled substances for a profit.
The case was investigated by FBI, the Philadelphia Office of Inspector General, the Drug Enforcement Administration, and the Philadelphia District Attorney’s Office. It is being prosecuted by Assistant United States Attorney Robert Livermore.
Judge Orders $1.2 Million Restitution to the City in Billing-Fraud Case
Mar 18, 2013
Barry Jones, 67, of Philadelphia, was sentenced today to 21 months in prison for devising and executing a scheme to defraud the City of Philadelphia out of more than $1.2 million. Jones, who was charged with one count of mail fraud, was the president of Mara Management Services Inc. ("Mara") when he knowingly submitted false bills in connection with a series of computer services contracts that Mara had entered into with City agencies. [-]
Between July 2004 and June 2008, Mara had contracts to provide computer programming, maintenance, and consulting services to multiple agencies, including the City's revenue and water departments, and Community Behavioral Health ("CBH"), a charitable corporation contracted by the City to provide mental health and substance abuse services for Philadelphia County Medicaid recipients. Mara hired subcontractors to perform much of the work on these contracts, repeatedly overstating the number of hours that these subcontractors worked on the projects in order to get inflated monthly payments from the City’s agencies and CBH.
Jones also overstated the number of hours that he was working on the contracted-for projects and between 2006 and 2008, he even sought and received compensation from the City for work by a subcontractor who had stopped working on the projects in 2005. In total, Jones caused the City to make payments to Mara totaling more than $5.9 million between January 1, 2005 and June 30, 2008, in connection with Mara's contracts with the Revenue Department, the Water Department, and CBH. Jones admitted that he kept approximately $2.7 million for himself, which greatly exceeded the amount he was entitled to receive from the City.
In addition to the prison term, U.S. District Court Judge Robert F. Kelly ordered Jones to pay restitution in the amount of $1.2 million and ordered three years of supervised release.
"By defrauding the City, Mr. Jones stole more than government funds," said Philadelphia Inspector General Amy Kurland. "He deprived Philadelphians of critical government services and undermined the City's ability to efficiently serve the taxpayers.
"But fraud causes far more damage than that," Kurland said. "It erodes the citizens' trust in their government and harms the reputation of honest city employees and contractors. By ordering full restitution in this case, the Court has sent a strong message: Those who break the law will pay their debts to society—both criminal and financial—in full."
The case was investigated by the United States Postal Inspection Service and the City of Philadelphia's Office of the Inspector General. It was prosecuted by Assistant United States Attorney Mark B. Dubnoff.