Apologetic O'Shea pleads guilty to defrauding charter

After admitting to collecting kickbacks from contractors, plundering the school's coffers to pay for home improvements, and pocketing money from its vending machines - a cumulative take of more than $500,000 - the former top administrator of the Philadelphia Academy Charter School expressed his regret succinctly in federal court yesterday.

"Your Honor, I just want to say I apologize," Kevin M. O'Shea told U.S. District Court Judge Eduardo C. Robreno.

During a brief afternoon hearing, O'Shea, 50, waived his right to a jury trial and pleaded guilty to charges of mail fraud, theft from a federally funded program, and filing a false tax return.

Although prosecutors have not provided a complete tally of O'Shea's misdeeds at the Northeast Philadelphia school, the former chief executive officer admitted misusing as much as $1 million from the publicly funded academy between March 2002 and May 2008.

He faces up to 33 years in prison.

As part of his plea agreement with the U.S. Attorney's Office, O'Shea has promised to cooperate with continuing federal criminal investigations into this and other charter school operations, including appearing before a grand jury if the government requests it.

He also has agreed to forfeit $500,000 and pay any fines or restitution ordered by the court.

Robreno scheduled sentencing for Oct. 22.

O'Shea was released on his recognizance. The judge ordered him to surrender his passport.

His attorney, Peter D. Hardy, said O'Shea transferred custody of his two handguns to a third party last week in advance of the hearing.

Dressed in a gray pinstripe suit, the former city police officer spoke clearly and firmly to the judge, responding, "Yes, I do," and "Yes, sir," when Robreno asked if he understood the guilty plea.

O'Shea was accompanied by his wife, Jamie, and their three daughters, who sat behind him in the courtroom.

O'Shea had been fired from the school in the spring of 2008 after an Inquirer investigation into parents' allegations of financial wrongdoing there. The federal probe began shortly afterward and has spread to several other area charter schools.

Philadelphia Academy, which opened in 1999, enrolls 1,200 students from kindergarten through 12th grade on its campuses at 11000 Roosevelt Blvd. and 1700 Tomlinson Rd.

Nearly three weeks have gone by since the U.S. Attorney's Office announced the charges against O'Shea and Rosemary DiLacqua, 51, former president of the charter school's board.

DiLacqua, until recently a detective in the Philadelphia Police Department, is scheduled to appear before Robreno today to enter her plea to allegations that she secretly accepted $34,000 from O'Shea and the late Brien N. Gardiner, the school's founder.

DiLacqua later approved raises for both men, and signed off on a 20-year consulting contract for Gardiner that would have paid him more than $100,000 annually for 90 days' work or less.

Amid reports in mid-May that federal charges were imminent, Gardiner, 64, died of a self-inflicted gunshot wound in the parking lot of the Bethayres train station in Lower Moreland, Montgomery County.

Yesterday, O'Shea listened intently as Assistant U.S. Attorney Derek A. Cohen outlined the charges against him, including using charter funds to further personal business interests, submitting more than $40,000 in false invoices for reimbursement for personal expenses and meals, and obtaining more than $46,000 in school money for improvements to his home in the Morrell Park section.

In addition, O'Shea and Gardiner had used a nonprofit, created by Gardiner, to provide special-education services to the Philadelphia School District. The government said that the enterprise also was a profit-making venture for the two men and included real estate dealings.

O'Shea and Gardiner, Cohen said, skimmed more than $16,000 in profits from the school's vending machines and spent $145,000 on executive offices that included flat-screen TVs, lavishly appointed bathrooms, and a kitchen with granite countertops.

O'Shea also admitted submitting invoices to the charter school in April 2008 for a computer company he had retained "to help destroy computer evidence in an effort to obstruct this investigation," according to the plea agreement.

With a high school diploma and some college courses, O'Shea rose from the ranks of parent volunteer at the charter to board member before joining the staff in 2002.

At Gardiner's insistence, the charter school's board promoted O'Shea from director of operations to CEO in September 2007. The following month, on her own, DiLacqua approved raising O'Shea's salary to $204,000.

Gardiner, who had submitted his retirement papers and was collecting his state pension, remained at the school as a consultant.

After The Inquirer reported that the Philadelphia School District's inspector general was investigating the school - and that O'Shea and Gardiner, from a web of business interests, were earning more that most area superintendents - the Philadelphia School Reform Commission demanded changes.

Philadelphia Academy was required to install a new board and top administrator and to fire O'Shea, Gardiner, and their relatives as conditions for a new operating charter.

Now that O'Shea has pleaded guilty to the federal charges, lawyers from the state Public School Employees' Retirement System will determine whether he will lose his pension, said Evelyn Tatkovski, a spokeswoman. She said O'Shea had been collecting a monthly pension of $995 since informing the office he had retired April 17.

Yesterday, he told the judge he was working in landscaping and construction.