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Press Release

Former Philadelphia Traffic Court Judge Pleads Guilty To Scheme That Defrauded Pennsylvania Of State Grant Funds

For Immediate Release
U.S. Attorney's Office, Eastern District of Pennsylvania

PHILADELPHIA - Former Philadelphia Traffic Court Judge Robert Mulgrew, 55, of Philadelphia, pleaded guilty today to mail fraud and conspiracy to commit mail fraud in connection with a scheme to defraud the Pennsylvania Department of Community and Economic Development (“DCED”).  Mulgrew also pleaded guilty to filing a false tax return. 
Mulgrew and co-defendant Lorraine Dispaldo, who previously pleaded guilty, engaged in a scheme to fraudulently receive and misuse Pennsylvania state grant funds awarded to non-profit groups.  Between 1996 and 2008, the DCED awarded hundreds of thousands of dollars in grants to two community groups with which Mulgrew and Dispaldo were associated.  DCED awarded more than $450,000 in grants to the Friends of Dickinson Square (“FDS”) with the understanding that the grants were to be used to purchase equipment and materials for the maintenance of Dickinson Square Park at 4th & Tasker Streets, Philadelphia, and surrounding neighborhood revitalization.  Mulgrew, the Vice-President of FDS, signed the FDS grant contracts with DCED.   DCED also awarded approximately $397,000 in grants to the Community to Police Communications (“CPC”) with the understanding that the grants were to be used to purchase communications equipment for the police and to purchase materials to secure vacant lots and buildings for the protection of the police.  Dispaldo signed the CPC grant contracts with DCED.

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 used thousands of grant dollars to pay Mulgrew’s relatives and associates. They represented that they were paying for work done on behalf of FDS and CPC. After distributing grant funds to relatives and associates, the defendants 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.

Mulgrew and Dispaldo spent thousands of dollars of grant funds for their own personal uses. Mulgrew improperly reimbursed himself from FDS funds for thousands of dollars of expenditures which he claimed were incurred by FDS when they were not and for his expenditures for items not authorized under the terms of the FDS grants. Mulgrew and Dispaldo supplied DCED with false documents to conceal their own use of grant funds and other improper uses of the funds.  

Mulgrew did not report the additional income from the fraud scheme on his tax return and claimed false business deductions which improperly reduced his tax liability.   

Mulgrew faces a maximum possible sentence of 23 years in prison, five years supervised release, restitution to the IRS and restitution to the Commonwealth of Pennsylvania.  Dispaldo, who pleaded guilty in April, is scheduled for sentencing on November 25, 2013.

The case was investigated by the Internal Revenue Service Criminal Investigation and the Federal Bureau of Investigation.  It is being prosecuted by Assistant United States Attorneys Paul L.Gray.  

Suite 1250, 615 Chestnut Street, Philadelphia, PA 19106
PATTY HARTMAN, Media Contact, 215-861-8525

Updated December 15, 2014