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Butkovitz Urges City to Recover Millions in Sheriff's Office Overcharges

For Immediate Release:    
November 21, 2011

Contact: Harvey Rice
215-686-6696

Butkovitz Urges City to Recover Millions
in Sheriff's Office Overcharges
City Controller’s forensic investigation uncovered between $7.4 and
$11.6 million that the Law Dept. should now take action to recover
   
Click here to View Letter to City Solicitor

Cick here to View Forensic Investigative Audit

PHILADELPHIA – As a result of the findings uncovered in City Controller Alan Butkovitz’ forensic investigation of the Sheriff’s Office, Controller Butkovitz today urges the City Solicitor to recover the excess fees and overcharges made by the Sheriff’s largest vendor that range from $7.4 to $11.6 million.

Reach Communications Specialist (Reach) and RCS Searchers, Inc. (RCS), both owned by James Davis Jr., provided advertising services as well as distribution title insurance, settlement closing services, sweep account services, and deed related services for the Sheriff’s Office.  The Controller’s auditors found two letter-agreement contracts with Reach. 

In a letter sent today to the City Solicitor, Controller Butkovitz stated, “Reach supposedly operated under one of two letter agreements that our auditors uncovered – both of which bear the signature of Janet Pina who denies signing either letter agreement.  At issue for recovery is either an overcharge of $7.4 million under a 15 percent commission contract, or $11.6 million under a ‘writ’ contract.”

A summary of the overcharges and excess fees made by Reach/RCS between the two letter-agreement contracts includes the following:
Website cost $2,916,580
Excess Production Costs $672,109 / $1,214,388
Unpaid Newspaper Costs $1,142,376
Handbill Production $1,141,630
Unpaid Utility Bills $616,729
Advertising Overcharges $310,217
Cash Voided Checks $60,686
Commission Charges $0 / $4,723,173
Total(s) $7,402,606 / $11,583,500

“I now urge the Law Department to initiate civil legal actions against Reach Communication Specialists, Inc. and RCS Searchers, Inc. (RCS) based upon this Investigation to recover money due to the City of Philadelphia as a lien holder in addition to liability exposure by the City to third parties,” said Butkovitz.

“Through extensive record discovery, the Law Department will be able to determine the intended recipients of the money from Sheriff’s sales,” said Butkovitz.  “As our report clearly shows, the victims were people who had hit financial bottom and could no longer afford to keep their homes.”

Butkovitz continued, “Not only did they lose their homes, but many did not receive the residual from the sale in which they were entitled.”

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