It seeks an accounting for the disposition of more than $115 million that flowed from the Sheriff's Office to Davis and his companies, and "the return of all ill-gotten gains established by that accounting."
Reached by telephone Wednesday night, Davis said the bulk of the money sent to his firm was redistributed to mortgage companies, utilities, and other third parties, who were owed the proceeds from sheriff's sales.
"I think they made a lot of allegations that were designed to create the impression of wrongdoing, when there was no wrongdoing," Davis said. "Everything we did was aboveboard and open, and the city knew about it. We worked with all the city agencies, the City Solicitor's Office, and the courts."
His attorney, Thomas S. McNamara, said Davis looked forward to defending himself and his companies in court.
Green, a former police officer who served as sheriff from 1988 through 2010, could not be reached for comment.
Davis had filed his own lawsuit against the city last January, alleging that the Sheriff's Office owed his company, Reach Communications Specialists Inc., nearly $2.5 million for unreimbursed advertising expenses, plus unspecified additional amounts for the abrupt firing of the firm by former acting Sheriff Barbara Deeley in January 2011.
Deeley took over the Sheriff's Office that month after Green took early retirement.
Many of the city's allegations parallel the findings of a forensic investigation by Deloitte Financial Advisory Services, commissioned by City Controller Alan Butkovitz and released in November 2011.
That probe said Reach and a related firm, RCS Searchers Inc., also owned by Davis, had pocketed at least $6.2 million in excess fees over a six-year period. It also questioned $135 million in distributions from sheriff sales and suggested that a signed contract between Reach and the Sheriff's Office may have been forged.
"The taxpayers will have their day in court, and I believe there will be a substantial recovery for the city," Butkovitz said Wednesday. He said he had participated in the selection of the private law firm, Kaufman, Coren & Ress P.C., hired by the city to develop the case.
Besides Green, Davis, and the Reach companies, other defendants in the city's lawsuit include Sheila R. Davis, James Davis' wife; Karen Coursey, Davis' sister, who worked for Reach but had a work station inside the real estate division of the Sheriff's Office; Crystal Stewart, another Davis sister who initially worked for Reach but later became an employee of the Sheriff's Office, eventually becoming director of its real estate division; Darrell Stewart, Crystal Stewart's husband, who worked for the Sheriff's Office in different jobs, at one point as supervisor of the real estate division; Tyrone Bynum, director of finance for the Sheriff's Office from 2002 until 2011; Jackiem Wright, a Philadelphia man who has already pleaded guilty to federal wire-fraud charges for accepting a fraudulent check from the Sheriff's Office and splitting the proceeds with one of the sheriff's employees; and Rory Lane Gazaway of Houston, owner of a company that allegedly received $80,000 in checks from the Sheriff's Office without providing any goods or services.
The federal investigation, directed by the U. S. Attorney's Office, has led to seven guilty pleas so far - all tied to a fraudulent check-writing scheme, unrelated to Reach Communications and the charges outlined Wednesday in the city's lawsuit. The federal probe is believed to be ongoing.
One point of contention in the city's lawsuit is likely to be the validity of a series of contracts and letter agreements between Reach and the Sheriff's Office, giving Reach major roles in advertising property sales, settling real estate transactions, collections, and computer services, among other roles.
In 2011, McNamara told The Inquirer that Reach had written agreements covering virtually all its work for the Sheriff's Office, along with documentation for the payments it had received.
The city contends that most of the contracts and agreements it has located are invalid, because the Sheriff's Office negotiated them directly with Reach and did not get required approval from the city's Law and Finance Departments.
McNamara said their approval was not required, because the Sheriff's Office was paying Reach with deposits and proceeds from sheriff sales, not city tax dollars.
Apart from that legal issue, the city cited a series of financial relationships between Davis and people in the Sheriff's Office, including Green, who bought his Mount Airy home from a company owned by Davis and, in 2007, received a $30,000 campaign contribution from Reach, three times the amount permitted by the city's contribution limits. The donation was "disguised as an invoice," the city said.
Contact Bob Warner at 215-854-5885 or email@example.com.