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An ex-official in the bankrupt city of Chester is charged in a ghost-payroll kickback scheme

The no-shows were to give half their salaries to the recreation director, the district attorney says. The scam cost the city nearly $100,000.

A picture of downtown business district along Avenue of the States in Chester. The city has been in bankruptcy since November 2022.
A picture of downtown business district along Avenue of the States in Chester. The city has been in bankruptcy since November 2022.Read moreAlejandro A. Alvarez / Staff Photographer

A former Chester recreation director has been charged with costing the bankrupt city nearly $100,000 by putting no-show workers on the payroll of a public swimming pool in exchange for the workers giving him half their salaries, the Delaware County District Attorney’s Office announced Friday.

Charges against Duane Lee, 48 — who resigned his post last month, according to the state receiver’s office that filed bankruptcy on Chester’s behalf in November 2022 — included theft and conspiracy.

Messages to Lee’s lawyer were not immediately returned.

Over a two-year period that ended in September, the city was paying 10 ghost employees listed as “lifeguards” during a lifeguard shortage, according to the district attorney’s affidavit of probable cause. It said that as part of the deal, they were to pay half their salaries to the recreation director.

“It is a sad day in Chester,” District Attorney Jack Stollsteimer said in a statement. He said that Lee and those who accepted the no-show jobs robbed the city of “much-needed funds” and eroded “the public’s trust in their government.”

Vijay Kapoor, the receiver’s chief of staff, said in a statement that the allegations “validate the receiver’s efforts to try to implement good government reforms in Chester despite being fought every step of the way for the last three years.”

Earlier this year, Commonwealth Court Judge Ellen Ceisler said in a 45-page ruling that would have limited the powers of City Council members that the administration was “internally dysfunctional.” She described “a pattern of city officials’ taking care of their own and intentionally turning their backs on wrongdoing within their departments.”

The city appealed her decision to the state Supreme Court, which hasn’t ruled.

Receiver Michael Doweary had filed for bankruptcy three weeks after he learned that the city had lost $400,000 in a phishing scam — months after the scam had happened.

The filing constituted a rarity. The city became one of only 31 of the nation’s 38,000 municipalities to enter that state in the 85 years since Congress offered the option.

Its manufacturing base long evaporated, Chester was declared a Pennsylvania “distressed” city in 1995. In 2020, then-Gov. Tom Wolf declared a fiscal emergency in Chester and appointed Doweary as receiver.