SEPTA OIG audit and investigation leads to prosecution of 9 employees and vendors for a million-dollar fraud scheme involving misuse of P-Cards
In 2019, SEPTA OIG conducted an audit of SEPTA’s Procurement Card (P-Cards) program. While testing financial transactions, auditors detected fraud. Thereafter, SEPTA OIG investigators conducted a joint investigation with the Federal Bureau of Investigation (FBI).
In August 2021, the United States Attorney’s Office for the Eastern District of Pennsylvania announced criminal charges against seven (7) SEPTA employees and two (2) SEPTA vendors for various offenses, including wire fraud, money laundering and bribery. See Criminal Informations for defendants David Abell, Rodney Martinez, Stephen Kish, Jesse Fleck, James Turner, Peter Brauner, and John Brady.
All defendants pled guilty. For those defendants who were SEPTA employees, their Pension Plan benefits were forfeited and they are not entitled to collect any pension payments.
Prior to sentencings, the SEPTA OIG submitted a Victim Impact Statement to the Court describing the financial loss, decreased morale, and damaged reputation caused by these nine bad actors.
As of this date, the defendants have all been sentenced. [See DOJ Press Release dated July 18, 2022; CBS 32 News dated July 19, 2022 at local21news.com; DOJ Press Release dated September 27, 2022.] The Court imposed sentences ranging from probation to 60 months’ imprisonment. The Court also ordered defendants to pay over $1 million in forfeiture and restitution to SEPTA.
Additionally, the SEPTA OIG issued a report (OIG # I-21-046, OIG # I-21-065) finding that two managers, although they were not criminally charged, also participated in the fraud scheme and misused P-cards for personal gain. The OIG recommended that legal civil action be taken to recover any stolen funds, that future benefits be forfeited, and that the one manager who was still employed be terminated.
Any reports of fraud, waste, abuse, serious employee misconduct or workplace violence can be directed to the OIG by phone (215) 580-3797 or by email [email protected].