Two brothers and senior Philadelphia government officials — including one who oversaw major city events including the Philadelphia Marathon, Broad Street Run, and Mummers Parade — were charged Thursday by federal prosecutors with embezzling funds intended for city recreational activities and a youth baseball organization, using them instead to pay off personal phone, grocery, and shopping bills.
Leo Dignam, who until last month worked as an assistant managing director for the city, faces two counts of wire fraud and one count of embezzling from a program receiving federal funds. According to charges outlined by U.S. Attorney William McSwain’s office, Dignam, from 2012 to 2019, used two bank accounts — including one he ostensibly opened to support the nonprofit Junior Baseball Federation — to defraud the city of nearly $150,000.
But, according to McSwain’s office, instead of using the money for the youth baseball group, Dignam, 61, converted those funds to pay off a personal American Express credit card bill, sharing cards on the account with family members to pay for groceries, retail and pharmacy purchases, gas station bills, and more. Similarly, federal authorities purport, Dignam funneled money from the Parks and Recreation Program Advisory Fund Account to pay off personal expenses on a Verizon Wireless Account.
Dignam, who federal authorities say most recently made a yearly salary of $116,000, worked for the city for 38 years, rising through the ranks of the Department of Parks and Recreation before joining the Managing Director’s Office early in Mayor Jim Kenney’s administration, during which time he oversaw many of the city’s largest events.
Dignam was planning to retire at the end of the year, but abruptly stepped down last month, according to a source familiar with the matter who was not authorized to speak publicly. He resigned Oct. 28, according to a Parks and Recreation spokesperson.
The Dignam family wielded significant clout in the department over the years, the source said.
Dignam’s brother Paul, who was the manager for the south region of Parks and Recreation, is charged with one count each of mail fraud and embezzling from a program receiving federal funds.
Paul Dignam, 58, resigned on June 5 to avoid being fired after the department learned of the allegations against him, Parks and Recreation spokesperson Maita Soukup said.
“We reported all information regarding the situation to the Office of the Inspector General at that time,” Soukup said.
According to federal authorities, in 2011, Paul Dignam, who oversaw the administration of local recreation centers and playgrounds, opened a bank account to be used to support rec centers, fund programming, and maintain play sites. But prosecutors allege that he instead used the money for personal gain from 2012 to 2019 — writing “reimbursement” checks to himself, mailing the statements to his home, and forging a friend’s signature on the checks. In total, officials said, Paul Dignam wrote himself 102 checks worth $119,000.
“This was money raised to help the children and families of Philadelphia, many of whom struggle in poverty,” Soukup said in a statement. “That these individuals chose to take any of that for their own gain is reprehensible."
Soukup said that since 2017, Parks and Recreation has implemented measures to financially manage recreation-related fees and fund-raisers, including mandatory disclosure of all recreation-related bank accounts, monthly oversight of accounts, and an effort to move accounts to a third-party sponsor for additional oversight and management.
As a result of the cases, Soukup said, the department is “further reviewing policies to protect against possible misuse.”
Philadelphia Inspector General Alexander DeSantis, whose office worked with the FBI and McSwain’s office on the cases, said the charges reflect systemic problems with Philadelphia Parks and Recreation, which maintains many small accounts of money raised for individual rec centers, in addition to the budgeted appropriation from City Council. A lack of oversight of those scattered funds makes the department ripe for abuse, DeSantis said.
He said in an interview that the case “signals the need for some reform” and that he hopes it would prompt “some stronger internal controls.”
The case is not closed, and officials may seek additional criminal charges against the Dignams or others if further wrongdoing is discovered, DeSantis said.
Also on Thursday, McSwain announced charges against Barbara Conway, 61, a former employee of the nonprofit Public Health Management Corp., which was created by the city and helps manage parts of its public health efforts. Conway worked with the Food Voucher Program providing emergency assistance to people with HIV/AIDS. From 2015 to 2019, the U.S. Attorney’s Office alleged, Conway, who lives in Drexel Hill, stole more than $39,000 worth of vouchers intended for HIV/AIDS patients.
The Dignam brothers, who live in Philadelphia, and Conway have all waived their right to be charged by indictment and have instead been charged through a prosecutorial document called an information. Such a move typically indicates they have agreed to plead guilty at a future date.
Attempts to reach Leo Dignam were unsuccessful, and Paul Dignam did not immediately respond to a voicemail. Conway did not immediately respond to a request for comment left with a family member.
If convicted, Leo Dignam faces a maximum sentence of 50 years in prison, Paul Dignam, up to 30 years, and Conway, up to 10 years.
"The callousness that the defendants displayed by stealing from these programs is stunning,” McSwain said.
Staff writer Jeremy Roebuck contributed to this article.