SEPTA maintenance P-card bribery and false billing scheme
Risk Mechanism
Maintenance managers and vendors colluded to submit false claims for goods and services that were never supplied, using payment mechanisms and kickback arrangements to divert operation and maintenance funds.
Case Summary
The U.S. Department of Justice stated that SEPTA maintenance managers and vendors operated a bribery and fraud scheme in the Bridges and Buildings Department, which was responsible for maintaining and repairing SEPTA stations, buildings, and related facilities. The scheme involved false billing and kickbacks, resulting in payments for goods and services that were not actually supplied.
Risk Lesson
This case demonstrates how operation and maintenance budgets can be diverted through collusion between internal managers and vendors, false invoicing, kickbacks, and weak verification of whether goods were delivered or services were performed. It highlights warning signs such as repeated payments to the same vendors, misuse of procurement cards, poor evidence of delivery or completion, and spending patterns that do not correspond to visible maintenance outputs.
Reference
U.S. Department of Justice. (2022). Two Senior SEPTA Maintenance Managers and Additional Co-Defendant Sentenced for Bribery and Fraud Scheme Against the Authority. Available from: https://www.justice.gov/usao-edpa/pr/two-senior-septa-maintenance-managers-and-additional-co-defendant-sentenced-bribery-and