From the outside, the unremarkable building at 2637 N. Fifth St. - Juniata Community Mental Health Clinic's headquarters - looks no different from dozens of other drab structures that line the roads in the city's poverty-stricken Fairhill neighborhood.
But, federal authorities say, the building lies at the heart of a fraud worth hundreds of thousands of dollars and one that could leave yet another blemish on the reputation of a Philadelphia political dynasty.
On Wednesday, prosecutors accused Renee Tartaglione - the building's owner and daughter of former city elections chief Margaret "Marge" Tartaglione, sister of State Sen. Christine M. Tartaglione (D., Phila.), and the clinic's former board president - with treating the nonprofit like her own personal slush fund.
In a 53-count indictment, prosecutors allege that she siphoned off its government funding to line her own pockets at the expense of low-income patients and bought up buildings the nonprofit used - including the Fairhill headquarters - to charge it exorbitant rents.
Between 2007 and 2012, prosecutors said, Tartaglione raised the monthly rent on another building she owned and leased to the clinic from $4,800 to $25,000. After the clinic moved to her five-story, 28,000-square-foot building on Fifth Street, she charged the nonprofit $75,000 a month.
All the while, they say, she issued Juniata checks to employees for services that were never provided so they could cash them and return the money to her.
"For those who depend on our nonprofits, the impact of the fraud is real and direct," said Philadelphia Inspector General Amy Kurland, whose office investigated the case along with the U.S. Attorney's Office, the FBI, and the IRS. "It's the bed that's no longer available at a local shelter. It's the shuttered soup kitchen in a neighborhood that desperately needs one."
Tartaglione, 60, did not enter a plea Wednesday during a brief court appearance and declined to comment afterward.
Hands cuffed behind her back, she sat in court in a black turtleneck and knee-high boots, shaking her head as prosecutors read off the charges, including conspiracy and mail, wire, tax, and Medicaid fraud.
Her lawyer, Geoffrey R. Johnson, said he had not had a chance to review the indictment.
The Juniata clinic and the Tartaglione family have a long and tumultuous history with neighborhood politics and city and federal authorities.
Marge Tartaglione sat atop the city's election machinery as its tough-as-nails chairwoman of the City Commissioners for 36 years. She was ousted by voters in 2011, in part, because of her participation in the controversial DROP pension program.
Until 2010, Renee Tartaglione worked for her mother in the city's elections office. But she was forced to resign after the Philadelphia Board of Ethics accused her of breaking the rules barring politicking by city employees.
The allegation that drove her out was that she ran the city's Democratic 19th Ward in Kensington while her husband and the longtime ward leader, Carlos Matos, served a federal prison sentence for bribing three Atlantic City councilmen.
He has since been released and regained his old post and continues to be important in Hispanic political circles.
Matos and Renee Tartaglione became involved with the Juniata clinic just before Matos was sentenced in 2007.
Tartaglione joined the nonprofit's board in 2006. She became its president a year later while still working as her mother's deputy at the elections board.
Prosecutors say she stacked the board with people she believed would be loyal to her and sign off on her decisions. Under her leadership, the clinic held city contracts to provide mental-health and substance-abuse services for Medicaid recipients.
Matos, who accompanied his wife to court Wednesday but has not been charged with a crime, also had a role in the clinic. He worked as a counselor even as he received mental-health treatment there while on federal probation.
The indictment unsealed Wednesday focused primarily on two buildings owned by Renee Tartaglione's property management company, Norris Hancock L.L.C.
In 2007, she purchased the building at 2254 N. Third St. where the clinic housed its headquarters at the time. Between that year and 2012, she raised the clinic's rent to more than five times the $4,800 it had been paying before she took over, prosecutors said.
She allegedly decided to move the clinic to another building she owned in 2012 - the current Fifth Street headquarters - where she approved a lease with rents of $35,000 a month for the first two years and $75,000 per month the three years following. She also required the clinic to pay an additional deposit of $150,000, the indictment alleges.
Tartaglione was released on her own recognizance. She is expected to return in the next several weeks to enter a plea before U.S. District Judge Joel Slomsky.
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