Ex-seaport museum chief charged

John S. Carter, the former Independence Seaport Museum president, had taste, a great job, and bosses who didn't watch him very closely - three things he used to live the good life.

Prosecutors charged Carter yesterday with swindling the museum out of more than $1 million worth of top-shelf goods between 1997 and 2006, a time when he was paid about $300,000 a year and lived rent-free in a museum-owned townhouse in Society Hill.

Carter allegedly engaged in a brazen but clumsy effort to cloak many misdeeds, charging a $1,100 suit as "marine water pumps," a $935 root canal operation as "boat supplies," and $6,400 worth of gym fees as "meetings."

For his summer house on Cape Cod, prosecutors said, Carter used museum money to have a $210,000 carriage house built and to buy a $275,000 power boat, a $100,000 wooden sailboat, a $6,900 tiger-maple bed, a $1,700 espresso machine, a set of escargot dishes and snail forks - and scores of other objects itemized in a government filing that exceeded 50 pages.

In a criminal information filed yesterday, Carter is charged with two counts of fraud and one count of tax evasion. He is expected to plead guilty, though the size of the loss to the museum - a key factor at sentencing - may be contested.

Carter, 57, probably faces at least five years in prison, Assistant U.S. Attorney John J. Pease said.

Defense lawyer Mark E. Cedrone said the sentence might be shorter, though he acknowledged that Carter faced "a significant period of incarceration."

"There are a lot of positives to Mr. Carter that we hope to bring to the court's attention," Cedrone said. "Mr. Carter is not the monster that this unusually long criminal [filing] suggests that he is."

Although Carter talked to prosecutors about the museum's dealings with State Sen. Vincent J. Fumo, (D., Phila.), Carter's plea agreement does not include a cooperation agreement, Cedrone said.

Fumo has pleaded not guilty to unrelated charges that he defrauded the museum by cruising free of charge on its yachts, as well as to charges that he defrauded the state Senate and a South Philadelphia charity.

Cedrone said that Carter gave a statement about Fumo to prosecutors but that his account contradicted the government's version of how Fumo used the yachts. Cedrone declined to elaborate.

Pease, the prosecutor assigned to both the Fumo and Carter cases, declined to comment on Cedrone's statement.

In their filing, prosecutors said Carter took advantage of the museum's inadequate oversight.

"He fully recognized and exploited the fact that Independence Seaport Museum had a weak and insufficient system of internal controls," the filing says.

Peter McCausland, chairman of the museum board, said a pending civil suit against Carter gave the museum good odds of recouping much of its money.

"We trusted John Carter. He was a well-respected, accomplished museum director," McCausland said. "He was well-known in the world of art and antiques and yachts. We relied on him and we also relied on our independent auditors."

McCausland added: "The lesson here is that volunteers on nonprofit boards need to understand that things can go bad just like they can in a for-profit business."

How did Carter pull off this alleged fraud for nearly a decade? The government says he lied on a grand scale, using three schemes.

First, he expensed work performed on his Osterville, Mass., home by falsely claiming it had been performed on the museum's Society Hill townhouse. That included the $210,000 carriage house.

Second, he charged personal expenses as business expenses, officials said. Those included $50,000 for a rare 1860 carved wooden eagle and a 19th-century narwhal tusk, and another $50,000 worth of electronic equipment, including four plasma televisions.

Third, he used $900,000 worth of museum money to give himself three boats and make repairs to them, officials said.

The Albacore, an antique boat that had been donated to the museum, was conveyed to Carter for $1. The Cyrene, which the museum bought for $275,000 without board approval, was a luxury power boat "with no historical value," prosecutors said. The Sadie, a $100,000 wooden sailboat, was built at Carter's direction at a cost of $71,000 to the museum, officials said.

The museum, which has had more than one million visitors since it moved to Penn's Landing in 1976, is the second waterfront unit in recent years to be stained by a senior executive's actions.

Last year, Leonard Ross, chairman of Mayor Street's committee to pick a developer to remake Penn's Landing, was sentenced to 21/2 years in federal prison for corrupting the selection process.