Associate of Philadelphia IBEW Boss Pleads Guilty to Fraud

James Moylan is about the last person that International Brotherhood of Electrical Workers Local 98 wants to see taking the witness stand. But those fears might be realized. On October 16, Moylan, a longtime friend of John Dougherty, business manager of the powerful Philadelphia union, pleaded guilty in federal court to 17 counts of wire fraud and four counts of filing false income tax returns in connection with his theft of around $49,000 from two nonprofit groups, each in some way supported by the union. He had been charged in January following a joint probe by the FBI, the IRS, the U.S. Labor Department’s Office of Labor-Management Standards, Office of Inspector General, and Employee Benefits Security Administration, plus the Pennsylvania State Police and Attorney General’s Office.

IBEW Local 98, now with about 4,700 members, for years has held a prominent place in the overlapping worlds of Philadelphia labor, real estate and politics. A large reason was business manager John “Johnny Doc” Dougherty, who had run (unsuccessfully) for Pennsylvania state senator in 2008. His brother, Kevin Dougherty, serves on the Pennsylvania Supreme Court. Johnny Doc over a decade ago earned a reputation for cutting crooked deals with contractors, though he was never charged with anything. Early this year, his winning streak came to an end. On January 30, Dougherty and seven other persons, mostly union members or employees, were slapped with a 116-count indictment alleging a wide range of offenses including wire fraud, embezzlement and bribery. The indictment was set in motion by FBI raids on various offices and homes back in August 2016. Dougherty, the indictment stated, used local funds as his “personal bank account and as a means to obtain employment for himself, his family, and his friends.”

Two additional persons not named in the indictment also were charged. One of them was George Peltz, a New Jersey-based contractor. The other was James Moylan. Now 57, Moylan was Dougherty’s longtime chiropractor as well as an old friend. He put his Local 98 connections to good use, serving as a paid political consultant to the union and eventually winning an appointment from Philadelphia Mayor Jim Kenney in February 2016 to head the City’s Zoning Board of Adjustment. He resigned his post nine months later after the FBI’s August raids turned up potentially incriminating evidence about his relationship with Dougherty. The multi-agency investigation turned up evidence of criminal wrongdoing which in turn led to this year’s fraud and tax evasion charges. Moylan’s guilty plea was almost inevitable, especially in light of Peltz’s sentencing in May following his January guilty plea to theft, bribery and tax fraud charges. Peltz had provided Dougherty with nearly $57,000 worth of home and office improvements at no cost.

At his plea hearing, Moylan admitted to the judge that during 2013-16 he stole tens of thousands of dollars in funds from a pair of nonprofit organizations, Neighborhoods for Fair Taxes and 298 Inc. He founded and headed the first group, which was dedicated to property tax reform, receiving $50,000 in donations from IBEW Local 98. And he served as treasurer of 298 Inc., at one point using his position to secure a $25,000 check from the union for Neighborhoods for Fair Taxes. Neither of these actions were criminal. Unfortunately, instead of using the money for its intended purposes, he routed close to $50,000 of that money toward personal expenses such as mortgage payments, business expenses, dinners, travel and golf. “He said he would use the funds for civic purposes; he used them otherwise,” said Assistant U.S. Attorney Paul Gray. There is also the matter of the four tax evasion charges to which Moylan has pleaded guilty. He allegedly had concealed nearly $300,000 in income from the IRS during 2012-16 by falsely claiming certain personal expenses as business expenses.

Where does all of this fit into the larger investigation into corruption in Philadelphia given John Dougherty’s imminent trial for embezzlement and bribery? Moylan, like Peltz, thus far has declined to help federal prosecutors. This is understandable given his decades-long friendship with Dougherty. But the feds are not likely to relent given that he faces up to 20 years in prison for each of the 17 wire fraud convictions. Dougherty, to his credit, repaid his union nearly $280,000 last year, a sum representing funds he allegedly routed for personal expenses and legal fees. “Some people are vindictive,” said Dougherty in late January on the eve of his indictment. “Most people just don’t understand my industry, and I play with a lot of powerful people who aren’t fond of me.” That may be true, but the dues-paying workers in his union probably would like an explanation. Moylan probably already knows it.

Adding to the drama is that prosecutors have taken aim at Philadelphia City Councilman Bobby Henon, an electrician by training who for a while served as political director of IBEW Local 98. Henon was indicted in January on numerous counts of honest services fraud and bribery. He has pleaded not guilty and has stated that he intends to remain in office. James Moylan may be a crook, but he’s small-time. He’ll be under a lot of pressure to flip to get a light sentence.