Leonard Ross, a prominent financial supporter and one-time adviser to Philadelphia Mayor John Street, pleaded guilty in U.S. District Court yesterday in connection to charges stemming from a municipal corruption investigation into a planned waterfront real estate development.
Ross, an attorney, pleaded guilty to one count each of honest services wire fraud and conspiracy to commit extortion, and two counts of honest services mail fraud, according to a plea memorandum filed by prosecutors.
Ross pleaded guilty in connection with an investigation into his work as chairman of the Penns Landing Corp., a nonprofit established by the city to develop land along the Delaware River. According to prosecutors, Ross was named by the city to the corporation’s board and tapped as its chairman in January 2003. The land is owned by both the state of Pennsylvania and the city, with the main tract a 13-acre parcel located next to the Delaware River.
“It’s probably the worst day in his life, to see an otherwise exemplary career of 33 years go up in smoke because of some very bad judgment,” said James Schwartzman, Ross’ attorney. Schwartzman said Ross is facing 18 to 33 months in prison, but the judge could increase or lessen that punishment.
Ross is scheduled for sentencing on April 19. Schwartzman said Ross would not be assisting prosecutors with any other investigations that may be ongoing.
“He hasn’t been asked to and he doesn’t have any information to provide that would be good for the government to use,” Schwartzman said.
In a statement released yesterday, White said: “Leonard Ross has been my friend for more than 20 years. However, he violated the personal trust I placed in him.”
Prosecutors said Ross used his position to conspire with the late Ronald White to defraud the corporation and to threaten “economic harm” against firms seeking to develop the site. White was also a major supporter of Street’s and a prominent bond counsel in the city. White was charged following a separate municipal corruption investigation by federal prosecutors in June 2004, but died later that year before going to trial.
At the time of Ross’ appointment, White was working for the real estate development firm of Tower Investments Inc., which responded to a request for proposals to develop the site.
According to an April 1, 2003, telephone conversation taped by prosecutors along with many others via wiretaps on White’s phones, Ross told White he was extending the RFP process and taking time to select a developer so those firms interested would make campaign donations to Street, who was in the midst of a tight re-election campaign. Prosecutors said Ross’ strategy worked, with the four finalists on the project contributing more than $50,000 to Street’s campaign.
Prosecutors said Ross became involved with White after turning to him for help to obtain a loan. Ross needed the loan to pay off $120,000 of debt he had after mishandling the payment settlement of a personal injury lawsuit.
White helped Ross obtain a $150,000 line of credit from Commerce Bank. White was a member of Commerce’s board of directors at the time.
According to prosecutors, when Ross had problems getting the loan fast enough White called Stephen Umbrell, who was then a senior regional vice president with the bank. Umbrell told White he agreed to the loan but ran it by Commerce Bank president Glenn Holck because “it’s a little weird deal.”
Umbrell and Holck were indicted with White, found guilty earlier this year and sentenced in October. Holck was sentenced to 28 months in prison and a fine of $200,000, and Umbrell to 27 months in prison and a fine of $50,000, according to a spokesman for the U.S. attorney’s office.
During the course of the investigation and his time at the corporation, Ross worked for the firm of Greenberg Traurig LLP. Michael Lehr, managing shareholder and co-chairman of the firm’s national public finance practice, declined to comment.
“Our firm has been fully cooperating with the U.S. attorney’s office in this investigation and because this is a pending proceeding it would be inappropriate for us to comment further,” said Jill Perry, a spokeswoman for the firm. Perry said Ross left the firm last month.
Prosecutors said Ross was hired in February 2000 with the title “of counsel,” and paid $10,000 per month. At the time he was hired prosecutors said a letter was sent to Ross by the firm stating that he was to use his “best efforts to generate transactional legal business” for the firm in municipal finance and with people who want to do business in Philadelphia. Schwartzman, Ross’ lawyer, said his client did not receive and never signed the letter.
According to a press release online and released by Greenberg Traurig at the time of his hiring in 2000, Ross was a former law partner and served as the lead chair for the Government Organization Transition Committee, where he was responsible for interviewing and making recommendations to Street on the staffing of all city departments, as well as for appointments for all city boards, agencies, and commissions.
