2 associates of Rep. Keller plead guilty to fraud charges

Posted: April 26, 2013

Two close associates of State Rep. William Keller - his former administrative aide, Lorraine DiSpaldo, and his longtime business partner, Mark Olkowski - pleaded guilty to federal fraud charges Wednesday in separate cases in U.S. District Court.

DiSpaldo, 58, an active figure in Democratic politics, told Judge C. Darnell Jones II that she misused $180,000 in state grants awarded to two South Philadelphia community groups.

Instead of spending the money for the purposes specified in the grants - to purchase police communications equipment, secure vacant lots and buildings, and maintain the neighborhood around Dickinson Square at Fourth and Tasker Streets - DiSpaldo paid thousands of dollars in state funds to relatives and associates of her codefendant, suspended Traffic Court Judge Robert Mulgrew, and to lifelong friends of Keller, federal prosecutors said.

"While there were several decent gardens built, some trees planted, and much landscaping material purchased," the U.S. Attorney's Office said in a news release, "for the most part the activities undertaken primarily served as a 'constituent service' clean-up-the-neighborhood arm for [Keller's] benefit, easy money for favored friends and relatives, a summer make-work program to benefit the teenage sons of Mulgrew's neighborhood and childhood friends, and some work on private property."

DiSpaldo, 58, faces sentencing Sept. 16 for 30 counts of mail fraud and seven related counts of wire fraud, conspiracy, filing false tax returns from 2006 to 2009, and bankruptcy fraud in a 2010 bankruptcy filing.

Mulgrew and his wife, Elizabeth, pleaded not guilty to related charges last September and are scheduled for trial before Jones, beginning June 5.

Keller has not been charged with any crimes.

In another courtroom, before U.S. District Judge Harvey Bartle, Olkowski pleaded guilty to filing false personal income tax returns from 2006 through 2009, failing to report about $148,000 in income to the IRS, and committing 15 counts of wire fraud with false applications for unemployment compensation, netting himself about $16,000 more.

Prosecutors said Olkowski, 62, of North Wildwood, had pocketed significant sums of cash received by K&O Sporting Goods, the business in which he and Keller have been partners since 1975, without reporting the money to his accountant or the IRS. He also used corporate credit cards for about $25,000 in personal expenses.

Bartle scheduled Olkowski's sentencing for July 24.

Contact Bob Warner at 215-854-5885 or warnerb@phillynews.com.

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