Two former top-ranking officers of the Philadelphia Academy Charter School were charged yesterday by the U.S. attorney with defrauding the Northeast Philadelphia school.
Kevin O'Shea, 50, the former chief executive - also charged with stealing $500,000 and filing a false tax return in 2006 - and another former CEO made $34,000 in undisclosed payments to Rosemary Di-Lacqua, 61, the former board president.
DiLacqua, in turn, is accused of approving a series of salary increases for O'Shea and Brien Gardiner, the school's founder, who was identified only as "BG" in the charging papers.
DiLacqua also allegedly signed a 10-year consulting agreement with Gardiner in May 2006 (later extended to 20 years) that would have paid him almost $100,000 annually for no more than 90 days of consulting.
Gardiner, also a target of the probe, died on May 13, apparently from a self-inflicted gunshot, Lower Moreland police said.
The charging document said DiLacqua did not dislcose any payments on her financial disclosure or to other board members.
U.S. Attorney Michael L. Levy said O'Shea and DiLacqua, both from Northeast Philadelphia, put their personal interests ahead of Philadelphia Academy's mission.
"Charter schools were an innovation to improve education and were never meant to be a source of personal enrichment for those running them," Levy said.
Peter Hardy, O'Shea's attorney, said O'Shea intends to plead guilty to the charges and has been cooperating with authorities since last year.
Hardy said his client apologizes to the parents and children of Philadelphia Academy, city taxpayers and his family.
An attorney for DiLacqua, a former police officer and one-time nominee for the Daily News' Fencl Award, was unavailable for comment.
O'Shea is a former police officer with a high-school diploma and had no prior experience in school administration when he was hired by Philadelphia Academy in 1999, authorities said.
By September 2002, Gardiner, then CEO, hired O'Shea as the school's director of operations for $60,000 a year.
Five years later, in 2007, O'Shea was hired to replace Gardiner as CEO at Gardiner's behest, authorities said.
When O'Shea left the school in May 2008, he was making $204,000 a year. No other board member except DiLacqua approved the salary, the feds said.
Authorities said O'Shea, both individually and with Gardiner's assistance, committed numerous frauds between March 2002 and May 2008.
In August 2007, the feds alleged, O'Shea and Gardiner used $710,000 in Philadelphia Academy funds to purchase a building on Bustleton Avenue and flip it to another charter school, Northwood Academy, that Gardiner controlled for a $1 million profit.
Northwood backed out of the deal when the federal probe became public, but authorities said neither O'Shea nor Gardiner returned the money to Philadelphia Academy.
Authorities also said O'Shea and Gardiner collected kickbacks from Philadelphia Academy vendors; submitted bogus invoices for reimbursement of personal meals, entertainment, home improvements, gas and telephone bills; used school employees to repair their vacation homes and mow their lawns; collected $34,000 in rent from entities using school facilities; and billed the school for $145,000 for office space, that included flat-screen TVs and executive bathrooms.
They even skimmed $16,000 from school vending machines, authorities said. *
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