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October 12, 2016

Indictment: Fattah Jr.'s alleged co-conspirator defrauded Philly schools

Businessman and son of former congressman falsified budgets, prosecutors say

Charges Fraud
Chaka Fattah Jr. Matt Rourke/AP

In this Aug. 14, 2014, file photo, Chaka Fattah Jr. walks from the U.S. Courthouse in Philadelphia.

A Montgomery County businessman is accused of working with Chaka Fattah Jr., who was convicted on fraud charges last year, to cheat Philadelphia schools and a bank by falsifying financial information.

David T. Shulick, 46, of Gladwyne, was charged Tuesday with embezzling funds from the school district and defrauding PNC Bank along with Fattah Jr., son of former U.S. Congressman Chaka Fattah. The senior Fattah was convicted on charges of fraud, racketeering and money laundering in June.

According to an indictment, Shulick's company, Unique Educational Experiences Inc. (UEE), operated schools in the city as well as the surrounding suburbs.

From 2010-2012, Shulick and Fattah Jr. are accused of working together to hide the true costs of UEE's services by submitting budgets to the district that included false benefits costs, inflated staff salaries and even salaries for positions that didn't exist, federal prosecutors said.

Shulick allegedly used the money for personal gain, such as paying for contractors at his personal and vacation homes.

Shulick also is accused of helping Fattah Jr. settle a loan he had defaulted on with PNC by falsely representing Fattah Jr.'s income, prosecutors said.

In a letter to PNC, Shulick allegedly threatened that Fattah Jr. might file for bankruptcy and claimed that Fattah Jr. only had a monthly income of $2,500, allegedly leaving out that his companies were paying Fattah Jr. a yearly salary of $75,000. The letter offered to settle PNC's claim for $2,500, prosecutors said.

Shulick is also accused of falsifying federal income tax returns from 2009-2011, allegedly leaving out taxable income and claimed itemized deductions.

If convicted, Shulick could face a "substantial" prison sentence, restitution to the school district and PNC and a fine of up to $3.8 million, prosecutors said.

Fattah Jr. was found guilty of 22 out of 23 fraud charges in November 2015, allegedly making false statements to banks to obtain loans and lines of credit he said were to support business ventures but were reportedly instead used for personal expenses. He was sentenced to five years in prison in February.