Friday, November 13, 2020

Two Brothers, Both Senior City Of Philadelphia Officials, Charged With Fraud And Embezzlement: Separately, A City Contractor And Manager Of A Meal Program For HIV/AIDS Patients Was Also Charged With Theft

 The U.S. Attorney’s Office Eastern District of Pennsylvania released the below information:

PHILADELPHIA – United States Attorney William M. McSwain announced that two brothers, Leo and Paul Dignam, were charged by Information with fraud and embezzlement, and a third person, Barbara Conway, was also charged by Information with theft.

Leo Dignam, 61, of Philadelphia, PA, was charged with two counts of wire fraud and one count of embezzling from a program receiving federal funds. Leo’s brother, Paul Dignam, 58, also of Philadelphia, was charged with one count of mail fraud and one count of embezzling from a program receiving federal funds. Barbara Conway, 61, of Drexel Hill, PA, was charged with one count of theft of funds from a program receiving federal funds. At the time of the charged offenses, Leo and Paul Dignam were senior officials with the City of Philadelphia, and Conway was the Food Voucher Coordinator for the Philadelphia Health Management Corporation (PHMC), an agency contracted by the City to manage the Food Voucher Program.

Leo Dignam was an Assistant Managing Director in the Managing Director’s Office and, prior to serving in that position, was the Deputy Commissioner for Programs with the Philadelphia Parks and Recreation (“PPR”) Department. In these positions, he oversaw the administration of major events in the city, such as the Philadelphia Marathon, the Broad Street Run and the Mummers Parade. Mr. Dignam worked for the City of Philadelphia for approximately 38 years.

Over the course of several years, from 2012 through 2019, Leo Dignam allegedly engaged in a scheme to defraud the City of Philadelphia of approximately $150,000 by misusing two bank accounts he controlled on behalf of the City that existed to support the work of PPR, namely, recreational activities for citizens. In particular, he opened a bank account purportedly to support the activities of PPR in connection with a non-profit organization, the Junior Baseball Federation (“JBF”). The JBF partnered with the Philadelphia Phillies to raise most of its funds through the sale of tickets for Phillies games.

Instead of using the JBF bank account solely for its intended public purpose, Leo Dignam allegedly misused the account by converting funds from the account to pay for personal expenses he incurred on an American Express (“AMEX”) credit card that he opened in connection with the JBF account. He used the AMEX card, and shared it with family members, for purchases from retail stores, grocery stores, pharmacies, gas stations, online retailers and service providers, and other businesses. He then used the funds in the JBF bank account to pay off the personal expenses on the credit card.

According to the Information, he similarly misused another account that was created for the benefit of PPR and the citizens of Philadelphia, the Program Advisory Fund Account. The defendant used this account to pay personal expenses by transferring funds directly to a personal account, solely for his own benefit, and by using it to pay personal expenses on a Verizon Wireless Account.

Paul Dignam was the Regional Manager for the South Region of Philadelphia Parks and Recreation. In this position, he oversaw the administration of local recreation centers and playgrounds and supervised the activities of several PPR district managers. In 2011, Paul Dignam opened a bank account that purported to be for use by a recreation advisory council, a commonly used governance structure in PPR that exists to support local recreation centers and playgrounds by helping to raise funds, develop programs, and maintain play sites.

Beginning in 2012 and continuing through 2019, he allegedly misused this bank account by repeatedly writing checks on the account made payable to himself. He helped conceal this fraud by having bank statements mailed to his personal residence and having another individual act as a signatory on the account. The defendant then forged the other individual’s signature on the misappropriated checks and falsely noted in the memo line of the checks that they were “reimbursements” for expenses he incurred by making purchases on behalf of PPR. In sum, Paul Dignam wrote himself approximately 102 checks worth approximately $119,000.

Finally, Barbara Conway was the Food Voucher Coordinator for the Philadelphia Health Management Corporation (PHMC), an organization contracted by the City to manage a Food Voucher Program designed to provide emergency assistance to people living with HIV/AIDS. This initiative is funded by the Ryan White HIV/AIDS Program, a federal program that provides grants to states, cities, counties, and other local organizations to fund care and treatment services for individuals living with the disease.

The Information alleges that beginning in 2015 through 2019, Conway stole more than $39,000 worth of food vouchers intended for HIV/AIDS patients receiving services through the Food Voucher Program.

“All three of these defendants allegedly made the same bad choice to steal funds from federally-funded programs,” said U.S. Attorney McSwain. “Further, in all three cases, the defendants stole money from programs designed to benefit groups that desperately needed the assistance – from patients struggling with HIV/AIDS who require emergency assistance to meet basic necessities to a youth baseball organization serving many underprivileged children. The callousness that the defendants displayed by stealing from these programs is stunning.”

“We share a collective and long-standing devotion to integrity in City government, and I wish to thank the United States Attorney’s Office and the FBI for their partnership in the investigation of the Dignam brothers and our broader mission,” said City of Philadelphia Inspector General Alexander DeSantis. “Further, the Conway case shows our continuing commitment to root out fraud and corruption in all forms, including by employees of city contractors involved in programs that affect some of Philadelphia’s most vulnerable populations.”

If convicted, Leo Dignam faces a maximum possible sentence of 50 years in prison, Paul Dignam faces a maximum possible sentence of 30 years in prison, and Barbara Conway faces a maximum possible sentence of ten years in prison.

All three cases were investigated by the Federal Bureau of Investigation and the Philadelphia Office of the Inspector General. The cases of Paul and Leo Dignam are being prosecuted by Deputy United States Attorney Louis D. Lappen, and the case of Barbara Conway is being prosecuted by Assistant United States Attorney Richard Barrett.

An indictment, information, or criminal complaint is an accusation. A defendant is presumed innocent unless and until proven guilty.

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