The City of Philadelphia filed suit last week in Common Pleas Court against a former vendor of the Philadelphia Sheriff’s Office and former Sheriff’s employee, including former Sheriff John Green, in an action that seeks an monetary damages and payments of money owed to the Philadelphia Gas Works (PGW).
The city claims that as much as $115 million may have been misspent by Green and other in his office.
Today’s filing was prompted by an action commenced by the City in October 2012. After an independent forensic audit of the Office of the Sheriff, City Controller Alan Butkovitz released a forensic investigation report prepared by Deloitte Financial Services, LLP in the Fall of 2011.
City Controller Butkovitz urged City Solicitor Shelley R. Smith to initiate civil action to recover from two primary service vendors, Reach Communication Specialists, Inc. (“Reach”) and RCS Searchers, Inc. (“RCS”), and others specified in the report for various apparent fiscal improprieties including: excessive fees and overcharges paid to Reach and RCS; unpaid amounts due PGW as a result of gas liabilities for properties sold at sheriff sale and other unpaid pass-through amounts; and improper, unauthorized or unsupported payments.
The Controller’s forensic report identified potential improper relationships, conflicts of interest and other alleged wrongdoing by and among former Sheriff John D. Green and other former Sheriff Office employees, as well as James R. Davis, Jr., his companies Reach and RCS, and others related to Davis and his companies. Moreover, the report noted that millions of dollars remained unaccounted for and millions of dollars in payments were unauthorized or unlawful.
With the assistance of attorneys at the law firm of Kaufman Coren & Ress, P.C., a prominent, well-regarded commercial litigation firm, the City initiated a lawsuit by writ of summons in October 2012 against the Reach entities and others. Today, the law firm has filed a complaint in that action on the City’s behalf.
In this action, the City seeks to recover for the wrongdoing of the Defendants named therein. The City asserts the following claims, among others: (a) an accounting with respect to the payment and disposition of more than $115 million that flowed from the Sheriff’s Office to Defendants Davis and his companies, and a judgment in favor of the City for the return of all ill-gotten gains established by that accounting, including any sums that may have been overcharged to the Sheriff’s Office in connection with the advertising of Sheriff sales, and $600,000 unpaid to the Philadelphia Gas Works; (b) treble damages for violations of the Public Official and Employee Ethics Act; (c) treble damages for the submission of false claims in violation of The Philadelphia Code; (d) breach of fiduciary duty and fraud; (e) aiding and abetting breach of fiduciary duty and fraud; (f) conversion; (g) unjust enrichment; and (h) civil conspiracy.
In addition to those named above, the Defendants include Sheila R. Davis; Karen Coursey; Crystal Stewart; Darrell Stewart; Tyrone Bynum; Processing Link; Rory Lane Gazaway; Yellow Rose Enterprises; 400 PTM, L.L.C.; and Jackiem Wright.