Former aide to state Rep. Keller heads to prison

Posted: November 27, 2013

AMID A COURTROOM of tears, a former chief of staff to state Rep. Bill Keller was sentenced yesterday to 18 months in federal prison for misusing state funds.

Lorraine DiSpaldo, 58, had pleaded guilty in April to 36 counts, including mail fraud, wire fraud and conspiracy as part of a scam with codefendant Robert Mulgrew, who is now a suspended Traffic Court judge.

The two were accused of defrauding the Pennsylvania Department of Community and Economic Development, which from 1996 to 2008 awarded hundreds of thousands of dollars in grants to two community groups with which Mulgrew and DiSpaldo were associated - the Friends of Dickinson Square and Community to Police Communications.

Rather than use the grant money to support neighborhood maintenance or help the police, prosecutors said, DiSpaldo stole funds to pay her personal phone bills and to improperly pay Mulgrew's and Keller's relatives, friends and associates. Keller has not been charged with any crimes.

DiSpaldo admitted to stealing between $70,000 and $120,000 in state money from 2003 to 2010. She also admitted to filing false personal income-tax returns from 2006 through 2009 and to lying in a bankruptcy filing.

Mulgrew, who became a Traffic Court judge in 2008, was vice president of Friends of Dickinson Square, a group that is no longer operating. This group is not related to a similarly named group, Friends of Dickinson Square Park, which is active in cleaning up the park at 4th and Tasker streets in Pennsport.

DiSpaldo's attorney, Catherine Recker, yesterday asked U.S. District Judge C. Darnell Jones II not to send her client to prison, but to impose home confinement.

She said a prison term would be harsh on her client, given her age and her health. "She has very bad knees," Recker said, noting that DiSpaldo had two surgeries on one knee, including a knee replacement five years ago.

Recker described DiSpaldo as "having lost everything," except for the love of her family. "She lost her job, she lost her pension, she's lost her savings."

DiSpaldo apologized in court, saying, "I am deeply remorseful."

About 30 family members attended the hearing, including her two grown children and parents.

Assistant U.S. Attorney Paul Gray told the judge that a prison term was needed to deter others.

After imposing the sentence, the judge told DiSpaldo as some of her female supporters began crying: "If I could let you walk out, in my heart of hearts, I would do that. But unfortunately, or fortunately, as a judge I also have a responsibility to make sure this conduct does not repeat itself."

The judge said DiSpaldo could begin her prison term Jan. 7 so she could spend the holidays with her family. He ordered restitution of $120,865 and three years' supervised release after prison.

Mulgrew, 56, faces sentencing next month. On the second day of his trial in September, he pleaded guilty to one count of mail fraud and one count of filing a false personal tax return in exchange for all charges being dropped against his wife of 36 years, Elizabeth, who had been charged along with him with filing false tax returns.

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