Sources: FBI investigating SEPTA over embezzlement scheme

A train moves along the Market-Frankford Line. (Matt Rourke/AP Photo)

A train moves along the Market-Frankford Line. (Matt Rourke/AP Photo)

This article originally appeared on PlanPhilly.

The FBI and SEPTA’s inspector general are investigating a multi-year embezzlement scheme that may have cost the agency big bucks, PlanPhilly has learned.

Fran Kelly, SEPTA’s assistant general manager, said the agency “cannot confirm or deny that there’s any ongoing investigation.” 

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But sources said that FBI agents had visited the agency’s Woodland Avenue building earlier this month. And other sources described the nature of the investigation to PlanPhilly. 

The scheme allegedly involved a string of the transit agency’s facility managers who colluded with outside vendors to fabricate fraudulent supply and repair invoices. The invoices were paid, using SEPTA office credit cards, but the requested services or merchandise were never fulfilled. 

Managers and vendors are said to have pocketed the leftover proceeds. In other instances, unneeded tools or equipment were ordered and then allegedly stolen by the involved parties.

Douglas Edwards, a secretary-treasurer with the Teamsters Local 500, which represents certain SEPTA employees, said he had heard rumors about the investigation. He emphasized that federal agents haven’t contacted any Local 500 members. 

“But there are a lot of rumors if there isn’t anything going on,” he said.

Joe Coccio, secretary-treasurer with the Transit Workers Union Local 234, which represents most of SEPTA’s drivers and other blue-collar employees, also said he had heard “rumors” of the investigation. He similarly said the inquest did not involve any Local 234 members. 

“Since none of the people involved or implicated are our members, at this time we don’t have any more information,” Coccio said.

It is not immediately clear how much money or equipment the alleged embezzlement could cost the agency, which has a $1.49 billion operating budget and a $675 million capital budget.

It is also unclear when the alleged racket began — but WHYY obtained a list of several managers who are said to be under an investigation that includes both current staffers and retired employees. 

A spokesperson for the FBI field office in Philadelphia said the FBI could neither confirm nor deny the existence of an investigation, per department policy. 

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