Two former SEPTA maintenance directors sentenced for fraud scheme
Solicited kickbacks from vendors to exploit ordering system
PHILADELPHIA » Two former senior directors of maintenance for SEPTA were sentenced in federal court Tuesday for their roles in a longrunning fraud scheme in the Bridges and Buildings Department that included soliciting payments from a Delco vendor.
David Abell, 73, of Chincoteague Island, Virginia, was sentenced to five years in prison with three years of supervised release. Abell, who served as director from 2013 to 2016, was also ordered to pay more than $213,000 restitution and to forfeit nearly $96,300.
Rodney Martinez, 51, of Blackwood, New Jersey — who replaced Abell in 2016 — was sentenced to two years and six months in prison with three years of supervised release and ordered to pay $292,000 restitution. He was also ordered to forfeit nearly $144,300.
Both defendants previously pleaded guilty to charges of federal program bribery and federal program theft. Peter Brauner, 59, of Kintersville, one of several BBD managers also charged in the scheme, was also sentenced Tuesday to two years of probation and ordered to pay more than $33,000 restitution after pleading to aiding and abetting theft from an organization receiving federal funds and wire fraud.
Mark Irvello, 57, of Broomall, owner of MSI Tool Repair and Supply at 7343 West Chester Pike, was previously sentenced to 30 months in federal prison for his role in the scheme. Irvello was also ordered to pay $542,359 in restitution, forfeit $176,620 and serve three years of supervised release.
Irvello 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 management-level employees in BBD to game the maintenance purchasing system for repairs and renovations at SEPTA facilities throughout the southeastern Pennsylvania region, according to federal prosecutors.
In order to facilitate maintenance and other work, SEPTA issues “procurement cards” (or “P-Cards”) to BBD managers, which operate as credit cards used for purchasing items needed for legitimate work, according to the release.
Beginning around 2013, Abell made separate agreements with Irvello and Woloff to exploit the P-Card system, soliciting them 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.
Martinez also regularly solicited the vendors under the same arrangement that Abell had put in place after replacing him in 2016 and received payments of more than $144,000, according to prosecutors.
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 PCard system.
Others charged in the scheme were Stephen Kish, 65, and Jesse Fleck, 43, of both Philadelphia; James Turner, 59, of Horsham; and John Brady, 60, of Blue Bell.
Brady was previously sentenced to two years of probation and ordered to pay $16,509 in restitution with a $12,699 forfeiture. Fleck was also sentenced to two years of probation and ordered to pay $130,763 in restitution. Turner was sentenced to four years of probation in May and ordered to pay $27,650 in restitution.
Kish pleaded in January to aiding and abetting theft from an organization receiving federal funds, aiding and abetting money laundering and wire fraud. Wolof also pleaded guilty in January to aiding and abetting theft from an organization receiving federal funds, bribery concerning federal programs and wire fraud.
Kish and Wolof are both scheduled for sentencing in September before U.S. District Judge C. Darnell Jones, who is overseeing all of the cases.
“Philadelphians deserve public employees who do their jobs honestly, without gaming the system to line their own pockets,” said U.S. Attorney Jacqueline C. Romero in a release. “At a time when SEPTA is facing significant challenges to continue serving and protecting its riders, the defendants’ actions — and those of their co-conspirators — are the definition of selfish greed.”