In Fraud We Trust

Ex-director of Germantown Special Services District Indicted by Feds. Will she be the only one?

Transparency.

Lack of it was the reason the commercial property owners who paid for the Germantown Special Services District’s operation killed it three years ago. The property owners whose taxes funded the GSSD made a reasonable request: Tell us what you’re doing with the money we’re paying you. Why hasn’t it gone towards the street cleaning and trash pickup you’re supposed to be providing?

The answers that came back from the GSSD board were incomplete and puzzling, with vague descriptions and nonsensical items. We may finally get some answers to those questions. The Feds, it seems, do have an idea where some of that money went.

On May 10, federal prosecutors charged Ingrid Shepard, the last chair of the GSSD board, with one count of wire fraud in a criminal information that also described 11 other transactions that could be considered embezzlement. According to a Philadelphia Inquirer report, Shepard funneled $125,000 of GSSD’s money into her own bank and investment accounts as well as those of two nonprofits she controls: the One Less Foundation, established to teach financial literacy to low-income families and help them “create paths out of poverty,” and Run Germantown, which sponsors an annual road race benefiting the foundation. Some of the money she deposited in the nonprofit accounts made its way into her own hands as well.

Quite likely, these transactions were uncovered during City Controller Rebecca Rhynhart’s audit of GSSD’s books. When the audit was completed in March, its results were not publicly announced but turned over to federal law enforcement officials.

The alleged illegal transactions took place over the course of Shepard’s three years as GSSD board chair. Given that the GSSD’s annual budget in 2018 was only $230,000, the money Shepard allegedly pocketed seriously hampered the district’s ability to provide the basic services it was formed to provide.

Still, the amount Shepard allegedly embezzled over three years doesn’t appear to be enough to have put the GSSD $27,000 in the hole as of 2018. Since we have visual evidence that the money didn’t go to the district’s primary function, not to mention the canceled contract with a street-cleaning service called Ready, Willing & Able, it appears that more money must have disappeared down other holes.

Which ones – and who did the shoveling –  remain unanswered questions at this point. Whether we get answers to those questions will likely hinge on how this prosecution proceeds — and on whether any further charges result from this Federal probe.

Councilmember Cindy Bass bears some responsibility for this, even if Shepard is found not guilty — though, according to the Inquirer’s report, the filing of a criminal information instead of an indictment (which must be approved by a grand jury) usually means that the defendant has already agreed to plead guilty — and even if Bass did not benefit personally from any alleged fraud.

After all, she rebuffed property owners’ efforts to join the GSSD board, which never reached its full size of 15 members. The board, which was not elected, but rather appointed by the Councilmember, often ignored the recommendations of its own nominating committee and installed candidates of its own choosing. And she repeatedly defended the district with accusations that the opposition was all due to Ken Weinstein, Northwest Philadelphia’s biggest developer and commercial landlord.

Anyone who followed the reporting in this and other media knows that Weinstein was far from alone. Owners of far more than the one-third of commercial property needed to block reauthorization submitted letters of objection when the reauthorization was pushed through City Council in the fall of 2018.

Again, we can’t say for sure whether others will find themselves facing a federal judge as a result of their involvement on GSSD’s board — or one (or more) of the five executive directors it had in its last five years of existence. (Their short tenures argue against their ending up as defendants.) But from this vantage point, it seems that this first Federal prosecution may not be the last.

Agree? Disagree? Leave your comments below or email editors@nwlocalpaper.com. Please see the links in this article for full meeting recaps plus more exciting — or at least illuminating — video clips.

ABOUT SANDY:

Sandy’s interest in journalism stretches all the way back to high school, and he’s been scribbling away ever since then, either in the field or in its hired-gun cousin, media relations. He currently runs the Real Estate & Home channel at Philadelphia magazine’s website, phillymag.com. His work has appeared in Next City, The Philadelphia Inquirer, Hidden City Daily and several other regional publications. Sandy is a Kansas City native who currently lives in East Germantown. Follow Sandy on Twitter @MarketStEl and Facebook @WriterSandySmith

About Sandy Smith 11 Articles
Sandy’s interest in journalism stretches all the way back to high school, and he’s been scribbling away ever since then, either in the field or in its hired-gun cousin, media relations. He currently runs the Real Estate & Home channel at Philadelphia magazine's website, phillymag.com. You'll find his column on trends in real estate and design in the print edition. Cities and the built environment float his boat, as does rail transportation, and he’s written about all of the above for Philadelphia-area media and beyond. His work has also appeared in Next City, The Philadelphia Inquirer, Hidden City Daily and several other regional publications. Sandy is a Kansas City native who currently lives in East Germantown. Follow Sandy on nwlocalpaper.com and social media -- Twitter: @MarketStEl Facebook: WriterSandySmith

2 Comments

  1. Sandy, Thank You.
    It’s not a question of big government or no government. If corruption can be kept down, we can all live happily.
    Again, Thank You for your reporting.
    -J

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