Phila. legislator's friend gets 3 months for fraud

Posted: August 22, 2013

A lifelong friend and business partner to State Rep. Bill Keller was sentenced Tuesday to three months in prison for cheating on his taxes and lying to collect unemployment checks he did not deserve.

"If everybody did what you did, we'd have chaos," U.S. District Judge Harvey Bartle III told Mark Olkowski, rejecting his request for a sentence that did not include prison.

Olkowski, 62, pleaded guilty in April to hiding more than $148,000 in off-the-books income from KO, the real estate venture and sporting-goods store he and Keller launched in 1975. He also admitted improperly collecting $16,000 in unemployment benefits.

Keller, a veteran Democratic legislator from South Philadelphia, did not attend, but his name still figured prominently in the proceeding, as it has since the case went public with FBI raids three years ago.

Olkowski's lawyer, Jack L. Gruenstein, noted that Keller had been a subject in the same investigation that led to the plea.

And both the judge and Assistant U.S. Attorney Paul Gray pointed out that Keller was not among more than 200 friends, relatives, and community admirers who sent the judge letters praising Olkowski.

"He has been written off by his partner of 35 years," Gray told the judge. "I guess it's safe to assume that Mr. Olkowski has been stealing from Mr. Keller for years."

A lawmaker since 1992, Keller has not been accused of any wrongdoing.

Reached by cellphone minutes after the hearing, the lawmaker sounded shaken by the news of Olkowski's sentencing and struggled to respond.

"I'm very upset," he said. "He is my friend, my lifelong friend, and he will always be my friend."

Two other associates were also swept up in FBI corruption investigations in the last year. One of Keller's former top aides, Lorraine DiSpaldo, awaits sentencing for fraud. She has admitted taking thousands of dollars in state grants dedicated to improving police communications and funneling the money to friends and associates, including some with ties to Keller.

Another associate, former Traffic Court Judge Robert Mulgrew, is awaiting trial on charges that he similarly misused grants allocated to a nonprofit in Keller's district.

Anchored in a South Philadelphia building just doors from Olkowski's home, KO once served as a sporting-goods store, and its partners dabbled in real estate. But it built a reputation producing T-shirts and other apparel for political campaigns, unions, taverns, and businesses from South Philadelphia to Wildwood, where Olkowski spends much of his time.

At his plea hearing in April, Olkowski admitted that he regularly skimmed money from KO's coffers between 2006 and 2009. Some he stashed at home - FBI agents found more than $40,000 at his home in a 2010 search. But Olkowski also let his business pick up the tab for restaurants, clothing, even gas for his wife's car.

He admitted lying to get unemployment compensation after he was laid off from a sales job at Clairol.

Federal sentencing guidelines recommended a prison term of at least 10 months. Olkowski's lawyer asked for probation, pointing to his decades of service in the community.

The letters he filed portrayed the white-haired, bear-size Olkowski as ubiquitous in South Philadelphia, donating his time and money to groups and causes. He founded the Second Street Polish Society and is a Hall of Fame Mummer. He has been a coach at all levels, including for the Philadelphia Belles, a girls basketball team that has played tournaments nationwide.

Olkowski cried as he asked the judge for mercy. "I'm a hardworking neighborhood guy [and] family man who made a series of bad decisions of which I am responsible," he said, his family filling two rows in the courtroom.

Gray said Olkowski's community work was laudable, but should not offset what he called "a large, sustained, egregious planned fraud."

He also said Olkowski has refused to talk to agents "to this day."

Bartle said he could not remember a case in which he had received so many letters in support of a defendant. That made it all the more surprising, the judge told him, "that you let greed, I assume, get the best of you."

He ordered Olkowski to surrender and begin serving his term Sept. 23.


Contact John P. Martin at 215-925-2649, at jmartin@phillynews.com or @JPMartinInky on Twitter.

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