The attorneys for former Pittsburgh Police Chief Nathan Harper said he plans to plead guilty to the tax and conspiracy crimes he's been charged with.
Lawyers Robert Leight and Robert Del Greco said Harper has acknowledged misusing nearly $32,000 in police department funds.
“The lure of the accessibility of an unmonitored account proved to be too much of a temptation,” Del Greco said. “It really lured him in. It was an irresistible temptation.”
The fund was established as repository for a $3.85-per-hour fee the city charges bars, restaurants and other businesses when they hire off-duty police to work security details.
According to the indictment unsealed Friday, Harper, of Stanton Heights, authorized others to open two Police Federal Credit Union accounts that he allegedly used to access the money from September 2008 to December 2012.
That money was spent in a variety of places, including restaurants and a Sam's Club where a 32-inch LCD television was bought.
Harper is charged with conspiracy to commit an offense against the United States and four counts of failing to file tax returns from 2008-2011.
Harper didn't appear at the post-indictment news conference Friday because his attorneys said he is "embarrassed and distraught."
"The misuse of public office for personal gain is a violation of the public's trust, and it's also a felony," FBI Agent Doug Perdue said at a Friday afternoon press conference.
Leight and Del Greco said Harper takes full responsibility for his actions. They said he faces possible prison time and the likely loss of his pension.
"This is puzzling and baffling behavior, and a sad day," said U.S. Attorney David Hickton, who noted he worked with Harper on high-profile events and investigations for several years. "The allegations represent the worst kind of public corruption."
Channel 11's Rick Earle reported that a judge signed an arrest warrant immediately following the announcement of the indictment.
"Today's indictment of Nathan Harper for public corruption violations is not an indictment of the Pittsburgh Bureau of Police. The Federal Bureau of Investigation and the Pittsburgh Bureau of Police have a successful, long-standing and collaborative partnership to advance the public service mission of our respective agencies," said Perdue, who is the special agent in charge of the Pittsburgh office of the FBI. "That being said, stemming public corruption is the FBI's top criminal investigative priority. It will not be tolerated in our community, no matter the level, the amount or the individuals involved."
Harper, 60, faces four counts of failure to pay taxes and one count of conspiracy. U.S. Magistrate Judge Robert Mitchell released Harper on $100,000 unsecured bond. He ordered the former chief to surrender his passport.
Harper, wearing a tan suit, said nothing except answering the judge's questions with "yes, sir." He was accompanied only by Del Greco and Leight.
Acting Police Chief Regina McDonald released the following statement Friday: "We are saddened to learn of the federal indictments against former Police Chief Nathan E. Harper. The Pittsburgh Bureau of Police wants to reassure the residents of Pittsburgh that our officers and civilian personnel are dedicated hardworking professionals who will continue to protect and serve to the best of our ability.
Mayor Luke Ravenstahl, who is in Bradenton, Fla., removed Harper in February amid a growing police scandal.
"Today is a sad day for the Bureau of Police, and for the City of Pittsburgh as a whole. We will continue to work tirelessly to rebuild the bureau and to ensure that Pittsburgh remains one of the nation's safest cities," Ravenstahl said in a statement Friday.
The indictment accuses Harper of working with others to send public money to secret accounts at the Greater Pittsburgh Police Federal Credit Union and tapping the accounts for personal use, including purchases and meals.
The indictment lists 14 checks meant for city accounts that went to credit union accounts labeled "Special Events" and "IPF." The largest check topped $10,000.
Authorities said he used two of eight debit cards from the credit union to withdraw cash and buy perfume, food and alcohol, an oven upgrade, a ladder, movies, a gift card and a 32-inch LCD TV.
The last transaction listed in the indictment was Dec. 20.
Between September 2008 and December 2012, Harper used $31,986.99 of the money from two credit union accounts using two Visa cards, the indictment states. It lists more than 50 transactions between April 2010 and December at places including Harris Grill, Nakama, The Wine Loft, Grandview Salon, Macy's, Hofbrauhaus and XM Radio. He spent $391.38 at Sam's Club on the TV and other items on Aug. 16, 2010; $700.85 to Houston-Starr for the oven upgrade on June 7, 2010 and $326.33 at the Capital Grille on Dec. 14, 2011.
Hickton declined to say whether his office will seek indictments against anyone else involved in the debit card conspiracy. He would not say whether Ravenstahl, whose bodyguards had debit cards from the credit union, is under investigation.
Ravenstahl has said authorities told him he is not a target.
Harper had tax problems in the past. Between 1996 and 2006, city, county and school officials filed a dozen liens on his home for nearly $6,000 in unpaid taxes and sewage, court records show. He paid the taxes before becoming chief.
Channel 11's news exchange partners at TribLIVE reported in January that a grand jury was investigating Harper's involvement with Arthur J. Bedway, 63, of Robinson, an owner of Carnegie-based Victory Security indicted on charges of setting up a shell company, Alpha Outfitters, to win a contract to install computers in police vehicles. Bedway and Harper were friends.
Hickton said the FBI is still investigating the awarding of that contract and declined to say whether Harper would be charged with any crimes related to that.
The investigation expanded into spending by police officials and employees close to Ravenstahl. The mayor and others spoke to FBI agents and federal prosecutors.
They include Sandy Ganster, manager of the police bureau's Office of Personnel and Finance, a target of an FBI search last month. Ganster entered the grand jury room at about 8:30 a.m. Friday. She left without commenting about 10:15.
Karen Palmer, an accountant in Ganster's office, left the room about 20 minutes later. She declined to comment.
Ganster, under a grant of immunity, told authorities she diverted $25,000 to $35,000 in public money over three to four years into accounts Harper ordered her to open at the credit union, her attorney, Bill Difenderfer has said.
The money came from payments that businesses -- including bars, restaurants, strip clubs, construction firms and sports teams -- made to hire off-duty police officers, often to provide security.
City officials had reason to suspect problems in Ganster's office and the Special Events Office, which coordinates off-duty work.
In a memo to Sgt. Carol Ehlinger dated Jan. 10, Officer Christie Gasiorowski said Palmer, the accountant, raised concerns about several checks she received from the Special Events Office. Gasiorowski said Palmer told her she was afraid to tell anyone else her concerns because she believed her supervisors, Tamara Davis and Ganster, along with Harper, were involved in diverting money.
Palmer told Gasiorowski that numerous checks were diverted to the credit union and she was making copies. The checks totaled more than $31,000.
According to the memo, Ehlinger said she believed one of the checks had gone to pay for a promotion party for Cmdr. Eric Holmes. Gasiorowski asked for protection for her, Ehlinger and Palmer under the "Federal Whistle Blowing Act."
Ganster, 57, of Overbrook, told authorities she brought concerns about spending to Huss <who is this?> on Feb. 9. Three days later, FBI agents seized boxes of records from the Personnel and Finance and Special Events offices at police headquarters. That week, agents also copied records at the West End credit union.
Harper ordered debit cards in the names of eight people, including himself, Ravenstahl's bodyguards, and police brass including Deputy Chief Paul Donaldson and Assistant Chief Maurita Bryant.
The FBI interviewed Davis, one of Harper's former subordinates who started a private security firm with him called Diverse Public Safety Consultants LLC.
Allegheny County District Attorney Stephen A. Zappala Jr. last month sent a cease-and-desist letter to company owners Harper, Holmes, Sgt. Barry Budd, Officer Tonya Montgomery-Ford and Davis because they didn't have a private detective license.
Bedway and prosecutors are discussing a plea deal on a charge of defrauding the government, court records show. Victory Security once employed Harper's wife, Cynthia, a former police officer.
Channel 11's news exchange partners at TribLIVE and the Associted Press contributed to this report.