Former CEO at Philly music icon Kenny Gamble’s nonprofit sentenced to 7 years for embezzlement, bribery

A former executive of the community development nonprofit founded by Philadelphia music legend Kenny Gamble was sentenced to seven years in federal prison Tuesday for fleecing the organization out of more than a half-million dollars and then bribing an elected official in Milwaukee as part of a scheme to cover the cash crunch brought on by his theft.

Rahim Islam, the ex-CEO of Gamble’s Universal Companies, looted the nonprofit by awarding himself five-figure bonuses without board approval and embezzled hundreds of thousands of dollars more through reimbursements for personal expenses such as $16,000 in gym membership fees and romantic getaways with girlfriends to Orlando, Jamaica and the Bahamas.

In all —a jury concluded as it found him guilty of 18 counts including conspiracy and honest services, wire and tax fraud earlier this year — he drained nearly $610,000 from Universal’s coffers between 2011 and 2018 — all while the nonprofit struggled to come up with cash to support its core missions of providing affordable housing in blighted Philadelphia neighborhoods and educating children through charter schools it opened across the city.

“It’s a sad reality in our public life that so often idealism gives way to entitlement,” U.S. District Judge Gerald A. McHugh said as he announced Islam’s prison sentence during a hearing in federal court Tuesday.

He continued: “It’s essential that people entrusted with resources of our community know that there are consequences for taking it. … We cannot be looting charities. We cannot be taking away from vulnerable children.”

Islam, meanwhile, apologized to Gamble and the nonprofit staff for what he described as hypocritical behavior over the years.

“There’s no way to sugarcoat what I’ve done and the hurt that I’ve caused,” he said. “I can only say that I’m truly sorry and pray for the opportunity to get back and correct those wrongs.”

The punishment McHugh imposed — which also included an order that Islam repay the money stolen from Universal and $309,000 more in back taxes owed to the IRS — came nearly two years after a jury acquitted Islam in a separate case in which he was accused of paying bribes to Philadelphia City Councilmember Kenyatta Johnson and his wife, Dawn Chavous.

It fell short of the roughly 12- to 16-year sentence recommended by prosecutors and under federal sentencing guidelines and was also one year more than the six-year sentence handed down last week to former labor leader John Dougherty, who had been convicted at separate trials on bribery and embezzlement charges.

McHugh appeared to obliquely reference that case from the bench Tuesday as he lamented other recent instances of “public leaders” and “labor leaders” whose entitlement had led them astray.

But despite the seriousness of Islam’s crimes, the judge justified the break he gave the nonprofit leader by citing his advanced age and his efforts over the years to improve the lives of Black residents of Philadelphia.

Still, Assistant U.S. Attorney Mark Dubnoff noted in court before Islam’s sentence was announced: “He couldn’t have had a better opportunity to help other people than as CEO of Universal …He chose to help himself instead.”

Gamble founded Universal in 1993, well after he’d cemented his music legacy in the 1970s as the originator — along with songwriting partner Leon Huff — of soul music’s distinctive “Sound of Philadelphia.”

Hits such as Freddie Scott’s “(You) Got What I Need,” Billy Paul’s “Me and Mrs. Jones” and the O’Jays “For the Love of Money” made him a millionaire. He hoped the nonprofit he led, along with his wife Faatimah and Islam, the CEO he’d hired, Universal, could turn back decades of poverty and disinvestment in the South Philadelphia neighborhood where he grew up by expanding access to housing and educational opportunities.

» READ MORE: Who is Kenny Gamble? From Philly soul to Universal Companies, here’s what to know.

But by 2010, Universal’s real estate development wing had all but ceased operations due to its inability to fund projects, and the seven charter school campuses it operated in Philadelphia were struggling to fulfill their mission of educating children.

Former employees at Universal schools told jurors in Islam’s trial earlier this year that the nonprofit resorted to hiring under- and unqualified teachers because they could not afford to pay properly trained professionals.

Money was so tight on one campus, one Universal teacher told the FBI, that she resorted to having her students cook and sell lunches to other faculty members to raise funds to pay for basic classroom supplies like paper, pencils and textbooks.

Meanwhile, Islam was draining Universal’s coffers. He awarded himself at least $280,000 in bonuses and raises between 2011 and 2016 — salary bumps Universal’s board members said they never voted to approve.

At the same time, he submitted more than $250,000 in reimbursement requests to the company for personal expenses including car insurance, restaurant dinners, tickets to Broadway shows, family vacations, and vacations for him and a series of girlfriends.

He even charged Universal for the expense of sending one of his paramours to Seattle to attend a live taping of the Oprah Winfrey Show.

“While he was feathering his own nest, the children were suffering,” Dubnoff said in court Tuesday. “He essentially stole from school children to pay for luxuries for himself, his family, and his various girlfriends.”

And as the cash crunch at Universal brought on by Islam’s thefts intensified, the former CEO resorted to bribery to hide his crimes.

Former Milwaukee School Board President Michael Bonds testified earlier this year that Islam paid him more than $18,000 in bribes between 2014 and 2016 amid a push to expand Universal’s charter school operations in that city.

The payoffs were disguised in the form of invoices to a company Bonds owned, African American Books and Gifts. And in exchange, Bonds said he backed Universal’s efforts to operate a third charter campus in Milwaukee and to defer a $1 million payment it owed on a lease for another school operating out of school-district property.

Bonds, who pleaded guilty to bribery charges in 2019, faces sentencing next month.

Shahied Dawan, Universal’s former chief financial officer and Islam’s codefendant at trial, was sentenced to 18 months in prison last week — a punishment he earned after a jury convicted him of assisting Islam’s thefts and taking $80,000 in unauthorized bonuses for himself.

Leigh Skipper, an attorney for Universal, said Tuesday that the nonprofit was “releived that the matter is concluded, that the judge has ordered full restitution, and that it can continue moving forward with its mission of educating its charter school students and serving the community.

But as Islam learned his fate Tuesday, his attorney, David Laigaie, said the former executive was eager to make amends and put his crimes behind him.

“He’s lost his position, his salary, his standing in the community,” the defense lawyer said. “Rahim Islam is a lot more than the crimes Mr. Dubnoff addressed.”