Jail could await Old City developer, again

OLD CITY is where developer Michael Yaron built his small empire in the last decade. The former Israeli soldier came to the United States with nothing, earned a doctorate from the University of Oxford in England, and later rubbed shoulders with some of Philadelphia's most powerful people.

But as he walked alone the other afternoon past his buildings on North 3rd Street and on Arch, the narrow streets seemed to be closing in on him. Yaron and three others recently were found guilty of federal wire- and mail-fraud charges in a $2 million kickback scheme to get lucrative asbestos-removal contracts at a New York hospital. He's out on $250,000 bond, but he could face up to 20 years behind bars.

Yaron, 67, has been convicted twice before, but it's been more than two decades since he walked out of a federal prison in western Pennsylvania. Despite his real-estate holdings, his charitable donations and his former role as president of a synagogue on Lombard Street he helped rescue, Yaron remains a mysterious figure.

"I have to say that I liked Michael," said former Gov. Ed Rendell. "I liked his drive, his optimism. He had the ability to find money, he had the willingness to take risks, and he believed Philadelphia could be a great city again."

A website about Yaron, michaelyaronnews.com, says his demeanor is one of "politeness, gentleness, concern, attentiveness and intelligence." If you met Yaron on the street, the website says you'd be "mesmerized" but when approached on Arch Street last week, Yaron himself declined to comment. Same for his wife, Harrise, and his son Jarred. His attorney declined to talk about his case.

The U.S. Department of Justice and former business partners have said less-than-flattering things about the man who calls himself "Dr. Yaron."

"There was no rule in life, any kind of rule or requirements, that he feels obliged to follow," said a former co-worker, who asked that his name not be published.

Yaron might be a genius, albeit an enigmatic one. After all, he wrote a doctoral thesis at Oxford on "ionization and chemiluminesence in gases." But later he was charged with dumping dangerous chemicals.

Once he arrived in the Philadelphia area in the late 1970s, he became a businessman with an uncanny ability to get back in the game after the law took him out.

Rendell said he doesn't excuse Yaron's criminal record but wishes he could have advised Yaron that he didn't have to do business that way.

In 2007, when Yaron proposed the controversial 23-story Americana, a condo project in Old City, Rendell, then governor, sent a letter of approval to the city's zoning board. Yaron, a major political donor to former state Sen. Vincent J. Fumo, former City Controller Jonathan Saidel and others, had also donated $200,000 to Rendell's re-election campaign.

Rendell said Yaron didn't buy his support for the building, which hasn't been built but still deemed a project in development on Yaron Properties' website.

"He had me, and he had me legitimately," Rendell said. "I would have done it if he had donated money or not."

Rendell said that Yaron, restaurateur Stephen Starr and the Arden Theatre were responsible for the transformation of Old City. Starr and the management at the Arden Theatre declined to comment about Yaron, but one Old City leader spoke highly of him.

"He's been nothing but positive for Old City," said Harvey Spear, a member of the Old City District's board and owner of E-Z Park.

Michaelyaronnews.com also speaks highly of him: "[Y]ou immediately sense an inner strength that commands your full attention," the website says.

Cobbling together Yaron's background from his two websites and from what he told news organizations in better times, it all began in Israel, where he claims to have been a track star as a young man. Yaron, according to an article in the Jewish Exponent, graduated from high school in 1963 and later joined the Israel Defense Forces. A 1998 Daily News article said Yaron "became one of his nation's best young Army officers, distinguishing himself in the 1967 Six Day War."

In 1968, Yaron came to America penniless, the Daily News reported, and three years later he had a degree in chemistry from the University of Miami. In 2002, he thanked the university for taking in a "poor Israeli immigrant" and donated $1.5 million toward a new athletic field that now bears his name.

Yaron earned a master's degree in engineering from the University of Massachusetts in 1973 and had his doctorate from Oxford two years later. All three universities confirmed Yaron's degrees.

Well-steeped in the subject of chemistry, Yaron first appeared in Philly news in 1983 when the Inquirer reported that he and his brother, Barak, were indicted for dumping "carcinogens and other hazardous chemicals into drains, toilets and the ground at a Bensalem industrial park."

The feds said Yaron, owner of Quality Research Labs Inc., had been dumping the chemicals for nearly eight months, beginning in 1981. He also was accused of lying to the Environmental Protection Agency when they questioned him, the Inquirer reported, and he was sentenced to six months in prison.

Barak Yaron didn't return requests for comment, but a former co-worker there who spoke on condition of anonymity said that he doubted Yaron's academic background but not his intellect. "He's very, very adept at manipulating people," the man said.

Yaron spent nearly 500 hours of community service training the poor in asbestos removal at a North Philadelphia correctional facility after the conviction, the Inquirer reported, and donated $250,000 to the program, the Greater Philadelphia Center for Community Corrections.

When Yaron was indicted in 1989 for defrauding two insurance companies out of $151,000, he begged the court for mercy and asked to be sentenced to the same program to which he'd donated the money, the Inquirer reported.

His attorney, according to the Inquirer, told the court that Yaron's lapses in judgment were related to "a debilitating psychological depression resulting from his abandonment as a child" and aggravated by serious chemical burns from an industrial accident. A co-worker at the lab said Yaron was burned by an acid used for drain cleaners.

Prosecutors balked at Yaron's request, and the judge, citing past promises Yaron had made and broken, sentenced him to a year in prison and chided him for squandering his intellect.

"He has chutzpah, he has a lot of gall . . . Mr. Yaron knows how to use the system," former Assistant U.S. Attorney Linda Dale Hoffa told the Inquirer at the time.

Yaron also once tried to use the courts to his advantage by filing a lawsuit against Northampton Township when his son, Jarred, didn't get picked for a local youth basketball league. His attorney in the case, Gary Green, still admires Yaron's passion.

"He would do anything for his son and he didn't care what the expense was," Green recalled.

A judge ordered a new tryout, and with outside basketball experts gauging Jarred's talents, he made the team. Yaron still wasn't happy, Green said, because the coach who cut his son hadn't been fired.

"The thing that rankled him the most was stupid people," Green said.

It's unclear what Yaron did after getting out of prison in 1990, but in less than a decade he was back in business - back in the money, too, and about to make his mark on Old City. Tax records show that the Yarons moved to Abington in 1995, paying more than $1 million for a large English Tudor home atop a hill on a wooded 3.6 acres.

In 1998, he donated $2 million to help rebuild Kesher Israel synagogue at 4th and Lombard streets; he later became its president. A plaque outside the doors to the Yaron Chapel there thanks him for the gift. Norman Millan, Kesher Israel's current president, declined to comment about Yaron, but Rabbi Frederick Kazan called him a "fine individual."

In several interviews with the Philadelphia Business Journal over the last decade, Yaron detailed his accomplishments and his plans for Old City, where he claimed to have spent $100 million purchasing, rehabbing and managing dozens of properties. Most of this was happening at a time when his other companies - Cambridge Environmental & Construction Corp. and Oxford Construction & Development Corp. - were under investigation for paying kickbacks for lucrative contracts in New York City.

Yaron won a 2004 award from the Preservation Alliance of Greater Philadelphia for his work on Merchants' Row in Old City, where he brought in a Starbucks, The Papery and luxury apartments. He purchased the former Seamen's Church Institute on Arch Street, which later became MTV's "Real World: Philadelphia" living quarters and is now run by his son for exhibits and special events.

The Old City Civic Association and other groups often had issues with Yaron projects but the group also praised him for preserving the historical integrity of his buildings. Richard Thom, chairman of the association's development committee, declined to comment. But vice chairman Joe Schiavo said Yaron was a smart and meticulous businessman.

"He wanted the place to be so much more better than how he found it," Schiavo said.

Business owners in Old City said they still see Yaron on the street near his office, in local cafes and restaurants, and the Yaron Properties website claims that major redevelopments are still in the works, including transforming the Berger Brothers building next to the Betsy Ross House into a mixed-use structure.

As far back as July 2010, Yaron's former attorney was asking for travel restrictions to be lifted so he could go to Israel for a business meeting and "further his commitment" to holdings in Philadelphia. Yaron's New York construction business had "collapsed" at that point, the letter stated.

Schiavo and other sources said that Yaron seems to be slowing down in Old City, particularly since he was indicted in 2010, and that many Yaron properties have been up for sale in recent years.

Rendell said he wouldn't be surprised if Yaron bounced back again.

"Maybe if he has to go to jail," Rendell said, "he'll find something productive to do."