SEPTA Managers, Vendors Charged With Fraud And Bribery: Feds

PHILADELPHIA — Nine SEPTA manager and vendors have been federally charged after authorities said they used company credit cards for their own benefit.

Federal authorities said Mark Irvello, 56, of Broomall; Stanley Woloff, 58, of Philadelphia; David Abell, 72, of Chincoteague Island, Virginia; Stephen Kish, 65, of Philadelphia; Rodney Martinez, 50, of Blackwood, New Jersey; Jesse Fleck, 43, of Philadelphia; Peter Brauner, 58, of Kintersville; James Turner, 59, of Horsham; and John Brady, 60, of Blue Bell are all charged with bribery and fraud offenses.

If convicted, each defendant faces maximum sentences of at least 20 and as much as 40 years in prison.

Authorities allege that from 2013 through 2019, SEPTA Bridges and Buildings Department (BBD)managers Abell, Kish, Martinez, Fleck, Brauner, Turner, and Brady engaged in bribery and theft schemes with two SEPTA vendors, Irvello of MSI Tool Repair and Supply in Upper Darby; and Woloff of Advantage Industrial Supply in Philadelphia.

According to authorities, the BBD maintains, repairs, and renovates SEPTA facilities by using procurement cards, also known as "P-Cards," to management-level employees working in the BBD. The P-Cards, which operate as SEPTA credit cards, are to be used for purchasing items needed for the legitimate work of the department.

In about 2013, Abell, who was a Senior Director of Maintenance at SEPTA, agreed with Irvello and separately Woloff, to exploit the P-Card system for their mutual benefit, authorities said

Abell solicited the vendors to provide him with regular cash payments of about $1,000 to $2,000 per month and in exchange for those payments, the vendors falsely billed SEPTA through the P-Card system for items that the vendor was not providing to SEPTA, authorities said.

The false charges to SEPTA covered the cash payments to Abell, plus a substantial additional amount to generate fraud proceeds for the vendor, according to authorities.

As part of the corrupt deals with the vendors, Abell encouraged other BBD managers to use and continue to use MSI and AIS for SEPTA purchases, growing the vendors’ business with SEPTA, authorities said. To conceal the scheme, Irvello and Woloff billed SEPTA for items that SEPTA might use, but in fact, did not need at that time, or billed SEPTA for substantially more of certain products than they were actually providing to the agency, according to authorities. The vendors thus combined legitimate with fraudulent billing, making the scheme difficult to detect, authorities said.

At various times, beginning around 2014, several other SEPTA BBD managers began engaging in similar fraud activity with Irvello and Woloff, according to authorities. Those managers included Martinez, who in 2016 replaced Abell as Senior Director of Maintenance and took over Abell’s legitimate role in SEPTA’s BBD, as well as his role in the fraud and bribery scheme, authorities said. Martinez regularly solicited cash payments from the vendors under the same arrangement that the vendors had with Abell. The cash payments to Martinez totaled over $144,000, according to authorities.

Other BBD managers, including Kish, Fleck, Brauner, Turner, and Brady, individually solicited the vendors for cash and personal items, authorities said. The vendors agreed to provide the cash and personal items to the managers, and then fraudulently billed SEPTA to cover the cost of those payments and products and to generate additional fraud proceeds for themselves, authorities said.

The most prolific participant in this fraud scheme was Kish, according to authorities.

Kish had Irvello make over $225,000 in purchases to benefit Kish, authorities said. In most of these cases, Kish directed Irvello to purchase specific precious metals, particularly gold coins, each worth thousands of dollars, according to authorities. The purchases included several American Gold Eagle Coins, Gold American Buffalo Coins, South African Gold Krugerrand Coins, Canadian Gold Maple Leaf Coins, Royal Canadian Mint Gold Bars, and PAMP Suisse Gold Bars, authorities said. Kish is also alleged to have engaged in money laundering for using the proceeds of the scheme to purchase real estate, according to authorities.

The other participants in the scheme also obtained numerous personal items, including a $5,000 backhoe attachment for Brauner, ATV equipment for Fleck, and numerous electronics, tools, articles of clothing, and automobile repairs for Turner and Brady, according to authorities.

In connection with this scheme, the vendor companies owned by Irvello and Woloff each became one of SEPTA’s largest billers through the P-Card system and in doing so, Irvello defrauded SEPTA of more than $540,000, and Woloff defrauded SEPTA of more than $330,000, authorities said.