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Press Release

Former Baltimore Department of Public Works Supervisor Sentenced to More Than a Year in Federal Prison for Extortion

For Immediate Release
U.S. Attorney's Office, District of Maryland
Accepted Cash Payments and Caused Private Work to be Performed at Night by DPW Employees

Baltimore, Maryland – U.S. District Judge Catherine C. Blake sentenced Ronald M. Smith, age 47, of Elkton, Maryland, a former Baltimore Department of Public Works (“DPW”) supervisor, today to a year and a day in federal prison, followed by two years of supervised release, for the federal charge of extortion under color of official right for misuse of his authority as a public employee. Judge Blake also ordered Smith to pay a forfeiture money judgment of $64,000, representing his gain from the crime.  Smith admitted that he accepted cash payments for work he caused DPW crews to perform for private businesses on at least 22 residential and commercial properties.

The sentence was announced by Acting United States Attorney for the District of Maryland Jonathan F. Lenzner and Acting Special Agent in Charge Rachel Byrd of the Federal Bureau of Investigation, Baltimore Field Office.

According to his plea agreement, in 2014 and 2015, Smith was an employee of the Department of Public Works in Baltimore City ("DPW").  Smith was a supervisor in the Water and Waste Management Division ("WWMD"), and his supervisory responsibilities included receiving work orders, dispatching work crews and supervising the crews on jobsites.  He supervised a crew of approximately eight employees.  Smith generally worked the night shift—from midnight to 8 a.m. and, though he was not a licensed plumber, was responsible for responding to, overseeing and performing service repairs to City water ways, pipes, taps, connections, valves and water mains.

From 2014 through 2015, DPW was not responsible for installation of new or upgraded water service from Baltimore City's water main to the water meter vault of a house or a commercial property.  If a property owner or developer was installing new or upgraded service to a property, the property owner/developer was required to hire a bonded utilities contractor, chosen from a list approved by Baltimore City DPW, to tap into the City's water main and connect from the water main to the property.  The contractor was required to create a water meter vault in which a water meter could be installed to measure water usage for billing to the address.  The property owner/developer, or the utilities contractor hired by the owner/developer, was also required to submit an Application for the Temporary Use of Right of Way to the Department of Transportation’s (DOT) Right of Way Permits Section, whenever the utilities contractor needed to "cut" into a street or alley to access the water main in connection with the installation of new or upgraded water service, and pay a fee of $300 for traffic control.  The contractor also had to pay a 9% inspection fee for City costs before work could proceed.  After the contractor completed the installation of the service, the contractor was required to repair the street cut.  If the work extended overnight, the contractor was required to install and bolt down a steel plate over the excavation and place asphalt around the edges of the plate to secure it.

In 2014 and 2015, Philip Michael Loverde was a licensed plumber in the State of Maryland and one of the owners of All Service Plumbing and Drain Cleaning (“ASPDC” or “All Service”). ASPDC provided plumbing services in the Baltimore area.   Loverde and ASPDC were not bonded approved utilities contractors permitted to tap into Baltimore City's water mains.

According to court documents, sometime in late 2014 or in 2015, a contractor in the Baltimore area was building four new row houses.  DPW was not required to install the new water or sewer utilities.  Loverde was contracted for All Service to perform the plumbing work inside his properties.  Loverde mentioned that he had a "utilities contractor," Smith, who could install the water and sewer services for the new construction.   Smith was not a bonded approved utilities contractor and was neither a licensed contractor nor a licensed plumber. Smith obtained no permits for the work or for the street cut. Rather, Smith had DPW employees come to the site with Baltimore City equipment to break the street pavement for the new utilities, causing a large hole in the street and installing two water lines from the public water main to the new vaults.  The DPW employees constructed two vaults which would accommodate two water meters each and installed a "jumper" so that from each vault, two lines ran from the vault to the houses.  The crews also installed one sewer line per house which ran to the sewer line in the street.  Loverde’s contract for the utility work and the interior plumbing for all four houses totaled $92,000.  Of this amount, Loverde paid Smith approximately $10,000 for the installation of water and sewer services. 

As detailed in his plea agreement, from May through October 2015, Smith was paid $12,500 for new water services to be installed at five row houses that were being re-developed.  Without permits or paid traffic fees, Smith caused DPW work crews using DPW equipment to break the pavement, dig the holes, connect the pipe from the water main to the vault and from the vault to the house.  Loverde was not involved. 

In 2015, TRF Development Partners ("TRF"), a non-profit corporation based in Philadelphia, Pennsylvania, was active in renovating certain sections of East Baltimore.   TRF had contracted with the East Baltimore Redevelopment Association to perform an historical rehabilitation of residential properties in east Baltimore.  A supervisor for TRF contracted with All Service for plumbing work at the residences.  In the 1200 block of Gay Street, water and sewer services connected to their respective lines from the back of the properties to a water main and sewer line buried underneath the alley behind the houses.  TRF paved over the back yards of the houses before new water and sewer services had been installed. 

Beginning sometime in 2015, Loverde agreed with Smith and an employee of TRF, that Smith would handle the connection of service from the City's water main to the water meter vault and then from the vault to the inside of the property for the residential and commercial properties on Preston and Gay Streets and perform similar utilities work for the sewer line.  The new lines would run from the front of the houses to connect with a water main and a sewer line in the street; the pre-existing water and sewer lines ran from the back of the properties to the alley and would not be used because of the already completed paving.

TRF had retained the front wall of the properties but had gutted them completely and rebuilt them.  Loverde's company was to be responsible for installing all interior plumbing and fixtures and connecting to the water supply lines and sewer lines that Smith had run into the property for the houses on Preston and Gay Street.

At the request of a TRF employee, Loverde agreed to include in his invoicing the charges for Smith to create the new water and sewer services for the properties.  Loverde agreed to cash the checks from TRF made payable to All Service and to provide the cash to Smith.  Loverde knew that Smith was not a bonded approved utilities contractor but intended to divert City employees, equipment and material to perform the work and to pocket the cash funneled through him by TRF.   

Smith admitted that he caused DPW work crews to cut the street on Preston and Gay Streets and connect the water and sewer services from the water main or sewer to the house for nine properties on Gay Street.  Smith charged $1600 per address for water and sewer installation, for a total of $14,400, without permits or traffic fees.  Smith caused a DPW crew with a heavy equipment operator to come to North Gay Street at night to cut the pavement, dig into the street and install the new water lines and sewer.  Because the crew worked at night and in haste, the work was badly done, and North Gay Street began to collapse.  The crew had to return at night to finish the street patching job.  Smith also charged TRF $17,500 for the installation of a new dedicated water line for a commercial property at 1759 East Preston Street to provide water to a required fire sprinkler system.  Smith installed the new water line with DPW crews, and Loverde cashed the TRF check and paid Smith.  

Smith met a developer who was tearing down a church at the corner of Elwood and East Baltimore Street.  The developer was rehabbing one row house and building 3 new row houses on the foundation of the old church.  The developer agreed with Smith that Smith would install new water service for the three new row houses by connecting to the water main on East Baltimore and the water main on Elwood.  They also agreed that Smith could install three new sewer connections to the sewer line that ran down the alley behind the church.  Once again, Smith used DPW crews and equipment to perform this work, obtained no permits, paid no traffic fees, and paid no inspection fees.  Smith was paid approximately $10,000 in cash for this work.  Loverde was not involved.

In all, Smith admitted that he received at least $64,000 for the work performed by DPW crews.  Loverde previously pleaded guilty to his role in the extortion scheme and is scheduled to be sentenced on September 17, 2021, at 9:00 a.m.

Acting United States Attorney Jonathan F. Lenzner commended the FBI for their work in the investigation.  Mr. Lenzner thanked Assistant U.S. Attorney Joyce McDonald, who is prosecuting the case.

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Marcia Murphy
(410) 209-4854

Updated June 24, 2021

Public Corruption