Ex-charter school chief sentenced to 3 years

In sentencing the former head of a Northeast Philadelphia charter school to more than three years in prison for plundering its coffers, a federal judge yesterday called for more scrupulous government oversight of the taxpayer-funded charters so "this type of criminal activity is not allowed to be repeated."

On one side of U.S. District Judge Eduardo C. Robreno's courtroom were a few dozen staff members and parents of students at Philadelphia Academy Charter School, angered by the confessed crimes of Kevin M. O'Shea. The other side was occupied by 40 of his friends and relatives, who sat grim-faced as the judge upbraided O'Shea for taking advantage of the school's lack of financial controls.

"Mr. O'Shea did not break into the school in the middle of the night and steal the money," Robreno said. "He did so in the daylight."

The judge gave the former chief executive officer the maximum allowable sentence under federal guidelines, 37 months in federal prison. In addition, O'Shea was ordered to repay $900,000 to the school - though the actual amount will be less - and forfeit $500,000 to the federal government.

O'Shea, who was fired in May 2008 and now runs a landscaping and snow-removal business, already has turned over $75,000. He will begin his sentence in 45 days.

Standing with his hands clasped in front of him, O'Shea apologized for his actions. "I was blinded by greed, and I abused the trust people placed in me," he said. "I am truly sorry for my actions. I sincerely apologize."

In July, O'Shea, 50, pleaded guilty to charges of mail fraud, theft from a federally funded program, and filing a false tax return.

Prosecutors have not provided a complete accounting of O'Shea's misdeeds. However, he admitted stealing as much as $1 million between March 2002 and May 2008 from Philadelphia Academy. The charter, which opened in 1999, enrolls 1,200 students from kindergarten through 12th grade on its campuses at 11000 Roosevelt Blvd. and 1700 Tomlinson Rd.

In his plea agreement, O'Shea acknowledged that he had collected kickbacks from contractors, used school money to pay for improvements to his home in the city's Morrell Park section, pocketed money from school vending machines, and spent $145,000 on lavish executive offices.

O'Shea "lacked the experience to run a school" and turned Philadelphia Academy Charter "into a profit center for him and his family," according to the sentencing memorandum from prosecutor Derek A. Cohen. Through his crimes, O'Shea "upgraded his middle-class existence to one which included a $1 million Shore house, a boat, new cars, and the addition of an entire floor to his home."

O'Shea, a former city police officer, also admitted submitting invoices to the school in April 2008 to pay a computer company he had hired "to help destroy computer evidence in an effort to obstruct" the federal investigation.

As part of his plea agreement, O'Shea pledged to continue cooperating with the U.S. Attorney's Office. An open federal investigation has spread to other Philadelphia-area charter schools.

Peter Hardy, O'Shea's attorney, had requested a sentence of 12 to 18 months to signal that those who admit their crimes and cooperate will be treated fairly, he said.

After Robreno delivered the 37-month sentence, Hardy responded by e-mail to a reporter: "The Court has spoken, and we respect the sentence. Kevin accepted responsibility, cooperated in the investigation, and began making restitution payments before sentencing.

"He will serve his time and return to his role as a loving father, son, and husband, and as a productive member of society," Hardy concluded.

During the hearing yesterday, parents and school staffers told the judge that the damage O'Shea inflicted on the charter and its students went beyond stolen money. He robbed students of educational opportunities, they said, and bullied and verbally abused them, their parents, and the faculty.

Megan Snyder Galo was one of two parents whose complaints about Philadelphia Academy triggered investigations by the Philadelphia School District and federal authorities. Her son Evan, she said, bears academic and emotional scars from his time at the school.

The special-education coordinator had insisted on keeping Evan in a special-education class, Galo said, to protect him from bullying and verbal abuse from O'Shea and his sister, Connie, who was an administrator.

"My son Evan is currently in 11th grade, and after a year in an intensive private-school setting and year-round tutoring, he is now functioning at a seventh-grade level," Galo said. "His IQ is normal. Unfortunately, I trusted [the charter] with his life, and this is the result."

Larry Sperling, the school's current CEO, recounted Philadelphia Academy's struggles to regain its good reputation since the bad publicity generated by O'Shea's crimes.

"A label is now attached to the school," Sperling said, noting that other charter operators regarded his school as "the bad apple that spoiled the bunch."

After O'Shea's sentencing, the Pennsylvania Coalition of Charter Schools released a statement saying it "condemns the actions of those who abuse their privileges at any public school . . .. It is our hope that the other dedicated charter schools and their administrators will not be judged by the actions of the few who betrayed everyone's trust."

As a parent, O'Shea became involved with Philadelphia Academy at its founding; he later served on the board and then joined the staff.

Brien N. Gardiner, founder of the school, handpicked O'Shea to succeed him as CEO in 2007, even though O'Shea was not a college graduate.

The charter fired O'Shea in spring 2008 after an Inquirer investigation into parents' allegations of financial wrongdoing there.

After The Inquirer revealed that through a web of business interests O'Shea and Gardiner were earning more than most superintendents in the area, the Philadelphia School Reform Commission demanded changes.

The charter school was required to install a new board and CEO and to fire O'Shea, Gardiner, and their relatives as conditions for a new operating charter.

In May, when federal indictments were rumored to be imminent, Gardiner killed himself.

Yesterday, prosecutor Cohen said that as part of a separate settlement, Gardiner's estate had agreed to return $675,000 to Philadelphia Academy. That will trim O'Shea's share of the restitution to $225,000.

Rosemary DiLacqua, former president of Philadelphia Academy's board of trustees, has pleaded guilty to charges that she secretly accepted $34,000 from O'Shea and Gardiner. She later awarded O'Shea a salary of $204,000 without informing other board members and approved a consulting contract for Gardiner that would have paid him more than $100,000 annually for 90 days' work or less through 2026.

Her sentencing is scheduled for Dec. 15.