Lax oversight by the city and negligence by the head of taxpayer-supported Visit Philadelphia enabled the nonprofit tourism agency's chief financial officer to embezzle $200,000 over nearly seven years, according to an investigative grand jury report released Wednesday.
Joyce Levitt, 61, who worked for Visit Philadelphia from 2003 through 2012, including seven years as CFO, turned herself in Wednesday to face charges of theft, forgery, and fraud, Philadelphia District Attorney Seth Williams said.
The grand jury said Levitt took the money between September 2005 and February 2012 and used it for lavish restaurant meals, bargain-store purchases, skin-care services, and furs.
Levitt's failure to account for her spending was well-known in the agency, but Meryl Levitz, the agency's chief executive officer since its 1996 inception, did not address it, the grand jury wrote.
An accountant who sounded an early alarm about Levitt's finances in 2010 was fired, the grand jurors found. Levitt then hired her best friend, who had no accounting or bookkeeping experience, to replace the accountant with Levitz's approval, the panel found.
And although Visit Philadelphia gets $11 million in funding from the city's hotel tax, the agency was not required to show the city its budget, annual audit, or any other financial data in order to get that support, Williams said.
"It was Levitz's negligence and the city's lack of oversight that led to Levitt's continuous embezzlement," the grand jury wrote.
Neither Levitt nor Levitz could be reached for comment.
Levitt's misuse of funds was discovered by a 2011 audit that found that she had embezzled $118,806 by charging personal expenses to her corporate credit card and used Visit Philadelphia's corporate checks to pay her personal Visa bills, according to the grand jury.
She used Visit Philadelphia's credit card to fund $19,000 for meals at high-end restaurants, $18,700 for purchases at BJ's and Costco stores, $4,100 for services at a South Jersey skin-care facility, and $1,500 at a New York furrier, the grand jury found.
Confronted by the evidence in 2012, Levitt agreed to resign and reimburse Visit Philadelphia $210,000. In exchange, the organization agreed to keep the settlement confidential and not report Levitt to law enforcement.
The grand jury concluded that Visit Philadelphia wanted the matter kept secret so Levitz's negligence in the matter would not become public.
The grand jurors questioned some of Levitz's testimony, describing it as "incredible," a word they also used in regard to a claim by Visit Philadelphia's board chair, Manny Stamatakis, that he did not become aware of Levitt's misappropriation of funds until months after Visit Philadelphia launched an investigation into the matter.
The district attorney learned about the theft and initiated the grand jury probe only after the Inquirer documented the secret deal in a June 2014 story.
While Levitt repaid the money, Williams said her actions amounted to a crime that should have been reported to authorities.
"These are taxpayer dollars," he said. "The money belongs to the public."
Furthermore, the restitution still did not leave Visit Philadelphia whole, he said. The 2011 audit that uncovered the theft cost $100,000, and the attorney Visit Philadelphia hired to negotiate the secret deal was paid $108,908, according to the grand jury report.
Levitt, after voluntarily resigning her $120,000-a-year post in early 2012, went on to improperly collect $38,308 in unemployment benefits, which Visit Philadelphia did not appeal, the grand jury found.
In a statement Wednesday, Visit Philadelphia took credit for uncovering Levitt's misuse of funds, but did not address the grand jury's criticisms of Levitz or the organization.
"Visit Philadelphia appreciates the district attorney's watchfulness and follow-up on our own discovery of the misappropriation through our own auditing procedures in 2012," the statement read. "Upon discovery, we took immediate action and engaged legal counsel who advised us that our primary responsibility was to make the organization financially whole as soon as possible. We engaged experienced forensic auditors who determined the amount, and we were repaid in full, five months after the discovery."
Williams said he has asked Mayor Kenney, who is on Visit Philadelphia's board, to tighten oversight on the organization's finances.
Lauren Hitt, the mayor's spokeswoman, said Kenney "is already engaged about the future of Visit Philly" to ensure it is "using taxpayers' dollars efficiently, effectively and with accountability."
Hitt acknowledged that Kenney was on the board at the time of the Levitt matter.
"He was informed of the alleged embezzlement, along with the rest of the board, at a board meeting," she said, "and then in a subsequent board meeting they were told that VP's lawyers recommended settlement because it would ensure restitution."