Congressman's former aide gets house arrest in tax case

A former top aide to U.S. Rep. Chaka Fattah was sentenced Monday to four months of house arrest and three years' probation for failing to pay taxes on $264,000 she earned as a taxpayer-funded consultant.

Cheryl Mobley, 55, blamed her crimes on the stress of an abusive and disintegrating marriage, and her lawyer argued that she suffered from mental health problems. A skeptical prosecutor called the claims "shallow, false excuses" and said anyone facing prison would be anxious and depressed.

But U.S. District Judge Joel H. Slomsky said he was struck by Mobley's "bizarre" responses during a hearing last year and seemed swayed by a doctor's report that she had made progress in therapy. "I don't see the need for full-time incarceration," he said.

The proceeding brought to a quiet close a federal probe that once threatened to entangle Fattah, one of Philadelphia's most prominent Democrats.

With three advanced degrees, Mobley had served as Fattah's chief of staff when he was a state senator and in the 1990s ran the Educational Advancement Alliance, an entity that managed a scholarship program founded by him. That program, College Opportunity Resources for Education, has provided $28.5 million in scholarships to Philadelphia students, with support of federal grants Fattah has helped secure.

FBI agents began scrutinizing those funds after an audit raised questions about the grant spending. According to a memo filed by prosecutors, the alliance improperly used the grants to hire Mobley as a consultant and pay her nearly $107,000 in 2005 and 2006 - including a $25,000 "up-front payment." At the time, she was also being paid more than $100,000 a year as a consultant by the Pennsylvania Higher Education Assistance Agency.

Mobley's case marked the only prosecution to emerge from the probe. She was charged in 2011 with failing to file returns and pay $52,000 in taxes from 2005 and 2006.

Assistant U.S. Attorney Paul Gray contended that Mobley had thumbed her nose at the system for most of the decade. Over a seven-year stretch, he said, Mobley received $793,000 in taxpayer-funded income and paid just $9,600 in taxes.

In 2002 and 2003, Mobley owed the IRS $20,000 in back taxes and Malvern Prep thousands for her sons' unpaid tuition, but still spent nearly $100,000 on two luxury cars, Gray said. One was a $55,000 van with a foldout leather sofa, a flat-screen television, and a theater sound system. Mobley claimed it as a business expense and used it to cut her tax bill.

"Who needs a $55,000 van to be an educational consultant?" Gray asked the judge as he argued for a prison term within the 10 to 16 months recommended under federal guidelines for the crime. "The bottom line here is that the defendant has been avoiding her tax responsibilities since 2002."

Public defender James McHugh Jr. noted that prosecutors did not charge Mobley with tax evasion but rather the less serious crime of failing to file. In a sentencing memo, he said Mobley's mistakes occurred as her 17-year marriage dissolved and her life plunged into chaos.

In early 2012, she pleaded guilty to one count and no contest to the other. At her first sentencing hearing last December, Mobley said her abusive marriage left her overwhelmed, depressed, and downtrodden. "At a certain point I think I even lost my desire to live," she said then.

The judge halted that proceeding and ordered a medical exam after Mobley struggled to answer him and began rambling, first about her accountant, then about a fight with her ex-husband over a tuna sandwich she made for their son.

She was brief and more composed Monday, saying that there were "no excuses" for her conduct, that she alone was to blame, and that therapy has helped. "I can now see issues more clearly," she said.

What Mobley did as an educational consultant was unclear. She and her lawyer declined to comment after the hearing. But she told the judge she had not worked since 2009, is studying for a divinity degree, and recently applied for state early retirement benefits.

Slomsky ordered her to pay $69,000 in taxes and interest and a $3,000 fine.

Akeia Conner, who heads the IRS's Criminal Investigative Division in Philadelphia, said the case was a way to reassure taxpayers "that everyone is paying their fair share."

Fattah ended the scholarship program in 2009, but has resumed it. Last summer, the congressman's office announced a new $500,000 federal grant for CORE Philly.