Questions surround group tied to Councilmember Cindy Bass as its former head is sentenced in closed court hearing

The former head of a now-defunct Germantown neighborhood organization that was controlled by appointees of City Councilmember Cindy Bass was sentenced to four years of probation for embezzlement during an unusual closed-door hearing Tuesday.

Many other details about the case remain unclear.

U.S. District Judge Barclay Surrick barred the public from the courtroom during the sentencing hearing for Ingrid Shepard, the former head of the Germantown Special Services District. And many records related to the case have been sealed.

» READ MORE: Ex-head of the troubled Germantown Special Services District is accused of stealing more than $125,000

Prosecutors and Shepard’s defense lawyer declined to answer questions after the hearing.

An Inquirer reporter who witnessed part of the sentencing proceedings before being asked to leave by a security officer heard a lawyer tell Surrick about “campaign finance violations ... previously unknown.” At another point, Shepard told the judge, “I did try to alert the authorities.”

It was unclear what campaign finance violations the lawyer was referencing. Shepard’s crime had no clear connection to a political campaign. She admitted to stealing $125,000 from the Germantown organization over four years while she was serving as its president and treasurer before she was asked to resign in 2019.

Shepard pleaded guilty to one count of wire fraud in May and admitted to using the funds to cover personal expenses and to buoy two other nonprofits she ran. She has agreed to repay the amount she stole in restitution.

Bass said Tuesday she does not believe she is connected to investigators’ interest in Shepard.

“I don’t know anything about what Ingrid did, what she’s doing, what’s going on with that, except that she pleaded guilty to something,” Bass said.

» READ MORE: Philly Controller’s Office has referred its probe of Germantown Special Services District to the feds

No reason has been given on the court’s public dockets for why most of the filings in Shepard’s case are sealed. However, in filings in advance of Tuesday’s sentencing, Shepard’s lawyer, Natasha Taylor-Smith, asked the court to keep her sentencing recommendation private, saying it “contains sensitive and confidential information … [that] must not be available on the public docket.”

Shepard had been charged by way of a criminal information instead of an indictment, typically a sign that a defendant agreed to admit guilt early on in an investigation. That method is often used to charge those cooperating in larger investigations but is also used to charge defendants who agree to plead guilty without agreeing to work with authorities.

Michele Mucellin, a spokesperson for the U.S. Attorney’s Office, said Tuesday she could neither confirm nor deny that Shepard was cooperating in a larger criminal investigation.

Federal prosecutors in Philadelphia have taken an interest in matters related to several Council members in recent years, with mixed results. In 2019, they charged the nephew of then-Councilmember Jannie Blackwell with illegally soliciting payments for help securing city permits. He pleaded guilty in 2020. In 2021, then-Councilmember Bobby Henon was convicted in a bribery case centered on the politically powerful electricians union. And last year, Councilmember Kenyatta Johnson was acquitted in a separate federal bribery case related to a consulting contract for his wife.

Funded by a property tax on commercial properties in the neighborhood, the Germantown Special Services District was founded in 1995 with the purpose of cleaning and street-sweeping the commercial corridors along Germantown and Chelten Avenues.

It ceased operations in 2011 and was revived by Bass two years later after she was elected to represent the 8th District, which includes Germantown. Bass filled some of the seats on the group’s board with current or former members of her staff.

But after trash continued to pile up in the streets, local business owners in 2019 grew frustrated, and more than 100 voted against reauthorizing the district, effectively shutting it down.

The city Controller’s Office launched an audit of the district that same year. Then-Controller Rebecca Rhynhart, who has since resigned to run for mayor, said at the time that the probe was sparked by “calls of concern into our office about how the money has been spent from the improvement district.” Rhynhart’s office referred its audit to federal investigators last year.

Bass objected to the business owners who organized to shut the district down. She said they preferred a different type of neighborhood services organization called a business improvement district, which would allow taxed property owners to have a hand in how the organization is managed. A special services district, on the other hand, is governed by appointees of the local district Council member.

When the controller’s audit was announced, Bass said she welcomed the review of the organization.

“We want people to feel comfortable, and if there was something that was done inappropriately, we certainly want to know what it was,” Bass said.

Bass said Tuesday she has not been approached by federal investigators and does not have an attorney representing her in any matter related to Shepard or the Germantown Special Services District.