A Philadelphia traffic court judge and an aide to a Pennsylvania legislator
have been charged by the federal government with scheming to defraud the state Department of Community and Economic Development and filing false tax returns.
The office of Zane Memeger, the U.S. Attorney for the Eastern District of Pennsylvania, announced in a news release that an indictment was unsealed Sept. 13 against Philadelphia Traffic Court Judge Robert Mulgrew, 54, and Lorraine Dispaldo, 58, both of Philadelphia.
The indictment also charges Mulgrew’s wife, Elizabeth, 55, with filing false tax returns.
The news release did not name the Pennsylvania lawmaker for whom Dispaldo works as an aide, although local news reports said the woman works for state Rep. William Keller, a Philadelphia Democrat.
The indictment includes numerous counts of mail fraud allegedly committed during the defendants’ scheme to fraudulently receive and misuse state grant money awarded to nonprofit organizations, the press release states.
The state Department of Community and Economic Development awarded hundreds of thousands of dollars in grants between 1996 and 2008 to community groups with which Mulgrew and Dispaldo were associated, the government’s announcement states.
Much of that money was supposed to fund things like police communications equipment and materials to secure vacant lots and buildings in the city.
“The indictment alleges that the defendants misrepresented their intentions to DCED, and that contrary to their agreement to spend grant funds solely to purchase equipment and materials for neighborhood revitalization and improved communications with the police, the defendants instead paid tens of thousands of dollars in grant funds to Mulgrew’s relatives and associates …,” the news release states.
The indictment further claims that the defendants often created “make work” projects as a pretext for paying relatives and associates with grant funds.
Dispaldo is accused of improperly using grant resources to address routine cleanup requests from her boss’s local constituency.
“After distributing the funds, the defendants allegedly supplied false and misleading information to DCED to conceal the actual amount of grant funds which they paid to the relatives and associates contrary to the express purposes of the grant,” the news release states.
Mulgrew and Dispaldo are also accused of having spent thousands of dollars in grant money for personal use.
The Mulgrews are charged with five counts of filing false joint personal income tax returns for the tax years of 2006 through 2010, one count of tax evasion for 2005, and obstructing the administration of internal revenue laws.
Dispaldo is charged with four counts of filing false income tax returns for 2006 through 2009, and one count of bankruptcy fraud that alleges she concealed her true income during 2008 and 2009 in her 2010 bankruptcy filing.
The case was investigated by agents with the FBI and IRS and is being prosecuted by Assistant United States Attorneys Paul L. Gray and John M. Gallagher.
In a statement to local media, the First Judicial District of Pennsylvania, which comprises Philadelphia Traffic Court, would not address the matter except to say that the charges are not related to an ongoing federal investigation of parking ticket-fixing allegations at Traffic Court.
Traffic Court judges, like those serving on other minor judiciaries in Pennsylvania, are elected and require no legal background or training before becoming a judge.
According to the Philadelphia Inquirer, Mulgrew was elected to the bench in 2008, and before that was an employee of the International Brotherhood of Electrical Workers Local 98.
All three criminal defendants were arrested by FBI agents the morning of Sept. 13.
They were expected to be released on bail following a hearing before a federal magistrate judge.