Businessman tells Street trial he was bilked for $80,000

A Vietnamese business owner this morning implicated T. Milton Street and codefendant John H. Velardi in what prosecutors allege was a scheme to defraud the businessman of $80,000 through the sale of contract rights that Street and Velardi knew did not exist.

Thanh Nguyen, owner of V-Tech Services Inc., told the federal jury how, in 2003, he was informed by Street and Velardi that he was about to get his long-pursued city contract at Philadelphia International Airport.

Instead, Nguyen testified, he was led on by the two men for about a year after paying Street $80,000 in cash, only to learn that the $3.2 million subcontract he was buying the rights to – between Street's Notlim Inc. and Philadelphia Airport Services, or PAS – had been canceled by the city in June 2003.

Nguyen testified that Street and Velardi ultimately stopped returning his calls pressing them about when the contract would begin. In July 2004 Nguyen sued Street and PAS, the prime contractor maintaining airport mechanical systems, in federal court to try to get the contract enforced or his money returned.

Assistant U.S. Attorney Anthony Wzorek showed Nguyen a June 2003 letter from the city Aviation Department telling Street his subcontract with PAS was withdrawn.

"Would you have signed that contract if you knew about this letter?" Wzorek asked.

"If I knew that, I don't give Mr. Milton Street any money," Nguyen replied.

Street and Velardi are charged in the alleged scheme to defraud a Nguyen. Street also is charged with failing to pay federal taxes on consulting fees.

Defense lawyers for Street and Velardi will shortly begin cross-examination of Nguyen and are expected to attack his credibility because, as Wzorek noted this morning, Nguyen is the subject of a federal tax and money-laundering investigation.

According to trial testimony, Notlim Inc., had been awarded the $3.2 million facilities maintenance subcontract in 2002 by Philadelphia Airport Services, or PAS, the consortium that held the $13.6 million contract to maintain baggage conveyors, jetways and passenger transport vehicles at the sprawling South Philadelphia airport.

Before the subcontract, Street, 68, a street food vendor, former state legislator and longtime political iconoclast, had been earning $30,000 a month as a PAS consultant.

But when news of the PAS-Notlim deal became public in June 2003, Mayor John Street ordered his brother to end the agreement. That left the indebted Milton Street searching for a a way to replace that income.

Prosecutors say the former mayor had nothing to do with his brother's alleged crimes.

Prosecutors say Street's search for money led to the alleged scheme by Street and Velardi, PAS' facilities director at the airport, to recoup some cash by defrauding Nguyen, who had been pursuing airport work for some time without success.

Street allegedly got more than $80,000 from Nguyen by promising him Notlim's $3.2 million airport subcontract, despite the fact that the contract no longer existed.

Prosecutors allege that PAS hired Street in 2002 as a consultant to ensure that PAS kept the lucrative airport maintenance contract.

Street, 68, of Moorestown, and Velardi, 54, of Drexel Hill, are charged with mail and wire fraud in the alleged scheme to defraud a Nguyen.

Street is also accused of failing to pay federal taxes on $2 million in consulting fees he earned from 2000 to 2004, and of entering a corrupt relationship with PAS facilities maintenance manager Matthias A. Schwabe, 39, of Malvern.

Schwabe testified Friday that he received $98,000 from Street, a payment that prosecutors allege was for future favors. Schwabe, who pleaded guilty and agreed to cooperate with the government, also testified that he used PAS money to fund a variety of purchases for Street unrelated to the airport.