Executive at Philly music icon Kenny Gamble’s nonprofit sentenced to 18 months for embezzlement scheme

A former executive at the community development nonprofit founded by Philadelphia music legend Kenny Gamble was sentenced to 18 months in federal prison Monday for awarding himself $80,000 in unauthorized bonuses and enabling a colleague to loot the organization for hundreds of thousands of dollars more.

Shahied Dawan, former CFO at Universal Companies, apologized to the music producer and his wife, Faatimah, who founded the charity in 2002 to expand access to affordable housing and, eventually, charter schools in Philadelphia’s impoverished communities.

He continued: “I apologize to the students, the parents, the board members, the residents, the tenants, and everyone at Universal for not doing my best at that time. I sincerely regret not using due professional care.”

That last remark, during a hearing in federal court, prompted U.S. District Judge Gerald A. McHugh to remind Dawan that his crimes extended beyond just “poor performance as an accountant.”

Instead, the judge stressed, Dawan and Universal’s ex-CEO Rahim Islam had been found guilty of embezzling more than a half-million dollars in government funding and charitable donations meant to support Universal’s mission — money they spent on themselves instead.

“Respect for the law here,” the judge said. “Is the recognition that [those] assets don’t belong to anyone here but the community.”

Dawan’s sentence — which also included a $15,000 fine and an order that the executives pay more than $190,000 in restitution — came four months after both men were convicted of covering-up the thefts by lying on Universal’s tax forms.

Both men had been acquitted in an earlier trial of bribing Philadelphia City Councilmember Kenyatta Johnson and his wife, Dawn Chavous.

In the embezzlement trial earlier this year, a jury acquitted Dawan of many of the counts on which it convicted Islam. Still, prosecutors insisted Monday that while Dawan may not have been found as culpable as his codefendant, he had ultimate control over Universal’s books and enabled Islam’s thefts for years.

“Without [Dawan’s] assistance, none of this would have happened,” Assistant U.S. Attorney Mark Dubnoff said. Without Dawan, “there’s more money for affordable housing … there’s more money for educating children.”

Evidence at trial showed that Islam awarded himself at least $280,000 in bonuses and raises between 2011 and 2016 and that Dawan paid himself $80,000 — salary bumps Universal board members testified they never voted to approve.

At the same time, Islam submitted more than $211,000 in reimbursement requests to the company for personal expenses including car insurance, dinners, gym memberships, tickets to Broadway shows, and family vacations and romantic getaways for him and his girlfriends.

Dawan consistently signed off on these expenses and hid others on the charity’s tax filings, knowing they were not legitimately tied to Universal’s work.

All the while, Dubnoff maintained that Universal was struggling to stay afloat.

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

By 2010, Universal’s real estate development wing had all but ceased operations due to its inability to fund projects, and its charter campuses in Philadelphia were failing to fund the education of children.

One former Universal teacher told investigators that money was so tight she resorted to having her students cook and sell lunches to faculty members to raise funds to pay for basic classroom supplies like paper and pencils.

Universal’s charter school portfolio in Philadelphia has shrunk since the time the men were leading the organization, though it still operates five campuses within city limits. In a statement to the court, its attorneys said the hit it took as a result of Islam’s and Dawan’s crimes extended beyond its financial losses.

“As a result of the widespread publicity surrounding their prosecution, Universal also experienced reputational harm,” they said.

Still, Dawan’s lawyer, Thomas O. Fitzpatrick, pushed for probation. He and several witnesses lauded Dawan’s commitment to both Universal’s mission, despite his crimes, and to the community in which he lives.

“He is someone who prior to this had an unblemished record,” the defense lawyer said. “And now, his record has been marred by these proceedings.”

Though the judge called a sentence of probation “inappropriate,” he ultimately agreed that Dawan deserved some credit for the life he had lived up to and after his crime. The year-and-a-half sentence he imposed was roughly half what prosecutors sought.

“I am convinced Mr. Dawan is a good man based on his family and based on the many things he has done,” McHugh said, shortly before announcing his sentence. “The question a judge faces, though, is: What do you do when a good man does something seriously wrong?”

Islam is set to face sentencing next week.