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"Philadelphia airport worker admits taking $83,000 from mayor's brother"

Tuesday, December 12, 2006

Airport worker admits taking $83,000 from mayor's brother
"You can't live in that environment without somehow getting caught up in it"
The Associated Press

PHILADELPHIA - A former airport maintenance manager admitted Tuesday he took
$83,000 from the mayor's brother and failed to report it on his taxes.

Matthias A. "Matt" Schwabe, 38, of Malvern, pleaded guilty to mail fraud and
pledged to cooperate in the federal prosecution of T. Milton Street, the
older brother of Philadelphia Mayor John F. Street.

Milton Street, 67, of Moorestown, N.J., was indicted last month on charges
he failed to report $30,000 a month he was receiving from Schwabe's
employer, Philadelphia Airport Services, which had a contract to run the
city-owned airport.

Prosecutors charge that Street hired himself out as a consultant to
companies that hoped to win city contracts, doing little or no work. They
say he failed to pay taxes on more than $2 million in income in recent

Milton Street, a longtime food vendor and activist who once served in the
state senate, has pleaded not guilty to the charges. Co-defendant John H.
Velardi Sr., 53, of Drexel Hill, who was Schwabe's supervisor, also plans to
fight the charges.

Schwabe acknowledged Tuesday that Milton Street gave him $83,000 in 2003 to
pay for contracting work at his suburban Philadelphia home. He also pleaded
guilty to a tax charge stemming from his misuse of his company's petty cash

Schwabe's lawyer said his client worked his way up at the airport under
several employers, eventually managing some baggage and other operations,
but still made less than $100,000. Schwabe found himself in a nefarious
environment, the lawyer said.

"You can't live in that environment without somehow getting caught up in
it," defense lawyer Harvey A. Sernovitz said after Tuesday's hearing. "Matt
didn't create that environment. He wasn't a player. But inevitably it's
going to taint anybody who's in it."

Schwabe met Milton Street on the job, he said.

"Somebody introduced him and made him understand that he was an important
person. Important for us (the company)," Sernovitz said.

Schwabe, who is married with three young children, faces about 12 to 18
months in prison under federal sentencing guidelines, but could get a break
in exchange for his cooperation. He must also pay $27,000 in unpaid federal
taxes, plus fines and interest.

Schwabe remains free on $10,000 bail pending his March 5 sentencing.

Lawyer Jeanne K. Damirgian, who represents Milton Street, declined comment
on Schwabe's guilty plea.

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