U.D. business owner gets 30 months in SEPTA fraud scheme
The owner of an Upper Darby tool supply and repair company was sentenced Tuesday to 30 months in federal prison for his role in defrauding SEPTA out of nearly $1 million through a bribery and theft scheme.
Mark Irvello, 57, of Broomall, was also ordered to pay $542,359 in restitution, forfeit $176,620 in ill-gotten gains and serve three years of supervised release under the sentence imposed by U.S. District Judge C. Darnell Jones II.
Irvello, owner of MSI Tool Repair and Supply at 7343 West Chester Pike, was charged in August after investigators found he and eight others had conspired to exploit SEPTA’s procurement process for years. He pleaded guilty in February to charges of aiding and abetting theft from an organization receiving federal funds, bribery concerning federal programs and wire fraud.
Irvello and another vendor, Stanley Woloff of Advantage Industrial Supply in Philadelphia, conspired with seven managementlevel employees in SEPTA’s Bridges and Buildings Department to game the maintenance purchasing system for repairs and renovations at SEPTA facilities throughout the southeastern Pennsylvania region, according to a release from U.S. Attorney Jennifer Arbittier Williams.
In order to facilitate maintenance and other work, SEPTA issues “procurement cards” (or “PCards”) to BBD managers, which operate as credit cards used for purchasing items needed for legitimate work, according to the release.
Beginning around 2013, former Senior Director of Maintenance at SEPTA David Abell, 72, of Chincoteague Island, Va., made separate agreements with Irvello and Woloff to exploit the P-Card system. Abell solicited the vendors to provide him with regular cash payments of approximately $1,000 to $2,000 per month in exchange for their ability to falsely bill SEPTA through the P-Card system.
In order to conceal the scheme, Irvello and Woloff combined legitimate with fraudulent billing, such as billing for items that SEPTA might use but did not need at that time, or billing for substantially more of a certain product than was actually provided.
A criminal information filed in Irvello’s case indicates he also set up another company, AM Services and Supplies, at the same business location as MSI, for the sole purpose of having a second company to bill SEPTA and evade limitations on the P-Cards.
The false charges to SEPTA covered the cash payments to Abell and “a substantial additional amount” in fraud proceeds for the vendors, according to prosecutors. Abell also allegedly encouraged other BBD managers to use MSI and AIS for SEPTA purchases, growing the vendors’ business with SEPTA.
Abell has pleaded guilty to aiding and abetting theft from an organization receiving federal funds and bribery concerning federal programs. A prior sentencing date was canceled and no new date is currently listed. Woloff has also pleaded to those same charges and is awaiting sentencing May 31 before Jones.
Others charged in the scheme are Stephen Kish, 65, and Jesse Fleck, 43, of both Philadelphia; Rodney Martinez, 50, of Blackwood, N.J.; Peter Brauner, 58, of Kintersville; James Turner, 59, of Horsham; and John Brady, 60, of Blue Bell.
These other defendants engaged in similar illegal activity with the two vendors, prosecutors said. Martinez, who replaced Abell in 2016, regularly solicited the vendors under the same arrangement that Abell had
put in place and received payments of more than $144,000, according to the release.
Kish, Fleck, Brauner, Turner, and Brady also solicited vendors individually for cash and personal items in exchange for fraudulent billings. Kish was the most prolific participant, the release says, directing Irvello to make more than $225,000 in purchases to his benefit. He is also alleged to have laundered some of these proceeds through real estate ventures.
Some of the items obtained by the managers through the scheme included gold coins, ATV equipment, electronics, tools and a $5,000 backhoe attachment, according to the release.
Prosecutors say the fraud and kickback scheme continued at various times through 2019, during which MSI and AIS became two of SEPTA’s largest billers through the P-Card system.
Kish pleaded in January to aiding and abetting theft from an organization receiving federal funds and money laundering, and wire fraud. He has not yet been sentenced.
Brady, Fleck, Turner and Brauner have also pleaded to aiding and abetting theft from an organization receiving federal funds and wire fraud. Brady was sentenced Tuesday to two years of probation and ordered to pay $16,509 in restitution with a $12,699 forfeiture, according to online court records.
Fleck was sentenced to two years of probation and ordered to pay $130,763 in restitution. Turner is scheduled for sentencing May 24 and Brauner will be sentenced July 19, according to online court records. Martinez also has a July 19 sentencing date after pleading guilty to aiding and abetting theft from an organization receiving federal funds and bribery concerning federal programs.