A Philadelphia Traffic Court judge, his wife and a state legislative aide were arrested today in connection with a scheme to misuse thousands of dollars in grant funds for nonprofit groups and engage in a coverup.
Judge Robert Mulgrew, 54, and Lorraine Dispaldo, 58, an administrative aide to state Rep. William Keller, were charged with several counts of mail fraud in an indictment as a result of a federal grand jury. Dispaldo and Mulgrew, along with Mulgrew’s wife, Elizabeth, are also charged with filing false tax returns.
According to the indictment, the Pennsylvania Department of Community and Economic Development awarded grants to Friends of Dickinson Square, of which Mulgrew was vice president, and Community to Police Communications, where Dispaldo was secretary/treasurer. Around 2002, FDS received $294,000 in grants that were supposed to be used for maintenance of the park at Fourth and Tasker streets and surrounding neighborhood revitalization, which Mulgrew signed for. Starting around 2004, CPC received approximately $260,000 in grants to purchase communications equipment and equipment to secure vacant lots and buildings, which Dispaldo signed for.
Instead of using the funds for the described purposes, prosecutors allege Mulgrew and Dispaldo paid tens of thousands of dollars to Mulgrew’s friends and associates, including the teenage children of his friends, and to Keller’s lifelong friends for work reportedly done for the nonprofits. Additionally, they used some of the funds to address routine cleanup requests from Keller’s constituents. To conceal the scheme, prosecutors allege, the pair created “make work” projects for those who received the funds.
The indictment claims Mulgrew and Dispaldo also supplied false and misleading information to DCED to conceal the amount of funds paid to relatives and associates. It also alleges they spent thousands of dollars for their own personal use. In Mulgrew’s case, he reimbursed himself thousands of dollars from FDS funds for expenditures that were not related to the group, the indictment claims.
The First Judicial District, which oversees Philadelphia Traffic Court, said in a statement: The First Judicial District (FJD) has been made aware of the indictments of Philadelphia Traffic Court Judge Robert Mulgrew; his wife, Elizabeth; and Lorraine Dispaldo, an aide to State Representative William Keller. We have no other information than that which already has been released by federal authorities.
The statement continued, “It is important to note that today’s indictments are unrelated to the ongoing federal investigation of allegations of ticket-fixing within Philadelphia Traffic Court and the First Judicial District’s own internal investigation of the same allegations, ordered and directed by the Supreme Court of Pennsylvania. The Supreme Court also will soon determine Judge Mulgrew’s status regarding his position within Traffic Court. The FJD has no further comment at this point in time.”
Mulgrew, his wife and Dispaldo are accused of not including their ill-gotten revenue on their federal tax returns, including a 2010 bankruptcy filing by Dispaldo.
All three defendants were arrested this morning and will be arraigned Thursday afternoon.