Alternative-school chief with ties to Fattah Jr. guilty of embezzling $800K in Philly school funds

A federal jury on Tuesday convicted the head of a now-shuttered for-profit education firm with ties to Chaka "Chip" Fattah Jr. of bilking the Philadelphia School District out of $800,000 meant to educate some of its most at-risk teens.

While his students were struggling with teen pregnancies, complicated home lives, and learning disabilities, David T. Shulick — the former president of the Bala Cynwyd-based Delaware Valley High School Management Corp. — was spending money intended for their education and counseling on upgrades to his beach house in Margate, N.J., and his $1.1 million, 13-room Gladwyne home.

"He took money specifically allocated for these laudable purposes and spent it selfishly on himself," U.S. Attorney William M. McSwain said.

Jurors also found that Shulick lied about many of those expenses on his personal and corporate income taxes, listing money he spent on landscapers, housekeepers, and a $9,000 top-of-the-line speaker system as costs incurred by his business.

The panel of nine men and three women took about two hours Tuesday to find him guilty on each of the 11 counts of conspiracy, embezzlement, fraud, and tax violations with which he was charged. He faces a possible prison sentence at a hearing Aug. 16.

The case stemmed from money that Shulick – an accountant and lawyer — stole from a $2.1 million contract his company held between 2010 and 2012 to run an alternative school in Southwest Philadelphia for students at risk of dropping out.

"He ripped off those kids, cheating them of the educations he had promised to deliver," said Assistant U.S. Attorney Michael Donovan in his closing argument to jurors on Monday. "It's greed, pure and simple and ugly."

Throughout the three-week trial, Shulick's lawyers pushed back against that characterization and sought to pin the blame on Fattah, who served as Shulick's No. 2 for a time, and is the son of former U.S. Rep. Chaka Fattah (D., Pa.). Defense attorney Hope Lefeber described her client as dedicated to his work on behalf of students. She did not return calls for comment after Tuesday's verdict.

Shulick's company, which declared bankruptcy in 2015, at various times also held contracts to run additional campuses in East Falls, Warminster, and Reading. But his day of reckoning in court had long been telegraphed.

FBI and IRS agents raided his Logan Square office in 2012, and prosecutors all but called him a criminal during Fattah Jr.'s 2015 trial on bank and tax fraud charges. That case sent the congressman's son to prison for five years – in part for his role in fleecing the School District through Delaware Valley's contracts.

Fattah Jr. himself provided some of the evidence that later was used against both men.

Hoping to earn a reward and edge out Shulick to start a rival company, Fattah Jr. in March 2012 tried to anonymously report the misspending at the Southwest school campus through the district's fraud-prevention hotline.

Later, at an in-person meeting, Fattah Jr. implicated himself as he walked district representatives through Delaware Valley's budgets, pointing out how Shulick had grossly exaggerated what the company was spending on teacher salaries, employee benefits, counselors, and security staff. He did not know at the time that an FBI agent was attending the meeting.

In a statement Tuesday, School District spokesman Lee Whack thanked federal authorities for their work in both cases and said: "We look forward to receiving restitution and putting this behind us."

Staff writer Kristen A. Graham contributed to this article.