Newsletter - Office of the Controller, City of Philadelphia, Controller ...

Controller’s Forensic Investigation of Sheriff’s Office:
Criminal Charges Filed
After the Sheriff’s Office failed to provide
financial records worth $53 million during
a departmental audit, the City Controller
launched a precedent forensic investigation
that uncovered numerous questionable
financial transactions and fraudulent activity
within the Sheriff’s Real Estate Division.
From 2005 to 2010, the Sheriff’s Office
paid a vendor $206 million for advertising
services, settlement “pass-through”
disbursements, other related services and
fees. The vendor was the brother of the
director of the Sheriff’s Real Estate Division
and brother-in law to the supervisor of
the same division.
Under two near-identical, but different,
signed contracts between the Sheriff’s
Office and the vendor, the vendor
overcharged the Sheriff’s Office between
$7.4 million and $11.6 million for
advertising services.
“The Sheriff’s Office abandoned its responsibility
to protect the public’s interest by allowing
private parties to improperly benefit financially
at the expense of individuals and families
who lost their homes through foreclosure,”
said Controller Butkovitz.
Due to a lack of proper oversight, some of
the Sheriff’s Office overcharges made to
the vendor included the following:
• $2.9 million for posting properties on a
website from 2005 to 2010
• $1.1 million for advertising that was never
paid to newspapers for publishing ads
• $616,728 in 2010 for unpaid gas bills on
273 auctioned off Sheriff’s properties
The investigation also uncovered six suspicious
checks totaling $389,742 to three companies
with little or no connection to the Sheriff’s
Office, which included an antique dealer located
outside the city and a sports and entertainment
management services company that caters to
the needs of high-profile individuals.
The Controller’s forensic investigation was
turned over to the U.S. Attorney’s Office
where in less than a month criminal charges
were filed against four individuals; one was
an employee in the accounting department of
the Sheriff’s Office. All four were charged
with wire fraud as they operated a scam
that bilked the Sheriff’s Office for more
than $400,000. The U.S. Attorney’s
investigation is still ongoing.
At the onset of the forensic audit, three
upper-staff members responsible for Sheriff’s
sales and overseeing the financial records
for the Sheriff’s Office were terminated.
The vendor was also terminated.
The Controller’s forensic audit was the first
ever conducted for any city department or
agency by the Philadelphia City
Controller’s Office.
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