Tartaglione fraud trial pits two political dynasties at odds in the heart of city's Badlands

No one disputes that thousands of dollars were fleeced between 2007 and 2012 from the Juniata Community Mental Health Clinic, a taxpayer-funded addiction center in a Fairhill neighborhood desperately fighting twin scourges of poverty and drug use.

But the question of just how much was stolen and who was behind the theft has pitted two powerhouse political families in a legal battle that already has brought down an elected official and now threatens to send members of both clans to prison.

A federal jury began wading into the morass Wednesday as the fraud and theft trial of Renee Tartaglione, the clinic's former board president, opened in Philadelphia.

To hear prosecutors tell it, the 61-year-old scion of one of the city's most enduring political dynasties treated the nonprofit as a personal slush fund. She embezzled more than $1 million over five years, Assistant U.S. Attorney Peter N. Halpern said, and moved the clinic into buildings she owned so she could charge exorbitant rents.

"She secretly turned the nonprofit clinic into a 'my-profit' clinic," Halpern told jurors in his opening statement. "She used her position of trust to siphon money away from patients and caregivers and into her own pockets."

Tartaglione's lawyers, however, insist that fault lies with the rival Acosta clan – one that counts two former state representatives among its ranks, including former Rep. Leslie Acosta (D., Pa.) who resigned last year after her role in the scandal was exposed by the Inquirer and Daily News.

Acosta is expected to be a chief witness against Tartaglione at trial. But defense lawyer William DeStefano has accused her and her mother of stealing the money themselves while working as clinic employees.

They later bamboozled federal agents, he told the jury, to pin the blame on anyone else they could.

"They have a motive to lie," DeStefano said. "They stole pretty close to a million bucks."

The trial is expected to continue for weeks in a 13^th-floor courtroom of the federal courthouse at Sixth and Market Streets, but the allegations at its heart played out in one of the city neighborhoods hardest hit by the heroin epidemic.

The Juniata clinic, just blocks away from the half-mile gorge along Conrail tracks known as "El Campamento," held city contracts to provide mental-health and substance-abuse treatment to the type of addicts who flock to the open-air drug market nearby.

"This is not the Main Line. We're not talking about Bryn Mawr, folks," DeStefano quipped in court Wednesday. "We're talking about a dirt-poor, primarily Hispanic, community that had a need for addiction treatment."

But little mention was made of the case's political underpinnings – impossible to separate from how the investigation has played out since Tartaglione was indicted on 53 counts of conspiracy, theft, fraud, and tax evasion last year.

Tartaglione's husband, Carlos Matos — a Democratic ward leader whom prosecutors have described as a co-conspirator but who has not been charged in the case — was deeply involved last year in the party wrangling to oust and replace Acosta, a chief witness against his wife, from political office after her role in the case became clear last year.

Tartaglione's sister, Christine M. "Tina" Tartaglione, is a state senator who represents much of Northeast Philadelphia.

Their mother, Margaret "Marge" Tartaglione, sat atop the city's election machinery for 36 years as chairwoman of the city commissioners.

Renee Tartaglione worked for her mother in the elections office, but was forced to resign after the Philadelphia Board of Ethics accused her of breaking rules barring politicking by city employees.

The allegation was that she ran the Democratic 19^th Ward in Kensington while her husband served a federal prison sentence for bribing three Atlantic City councilmen.

It was during that period that Renee Tartaglione assumed control of the Juniata clinic, which she and Matos founded in 2002.

She was named president of the nonprofit in 2007, while still working as her mother's deputy.

But prosecutors say she stacked the clinic's board and staff with loyalists who would help her  turn it into a source of income while her husband served his sentence.

Among them was Sandy Acosta, ex-wife of former State Rep. Ralph Acosta and a former North Philadelphia ward leader in her own right.

Hired to run the clinic, she brought on her daughter, Leslie — whose stint as an elected official was several years in her future — as a contract employee.

Mother and daughter, along with a third employee, have admitted to accepting checks worth thousands of dollars from the clinic for work they did not perform, and both now maintain that they cashed the checks under orders to kick the money back to Tartaglione.

They pleaded guilty last year to money-laundering charges and agreed to cooperate with federal investigators.

But DeStefano balked at their claims Wednesday.

"These three lieutenants, the three amigos, the three dishonest, unfaithful, greedy employees, said, 'Let's do this,'" he said. "When Carlos [went to prison], these three women started embezzling money hand over fist."

Meanwhile, prosecutors allege, Tartaglione was lining her pockets in another scheme.

In 2007, she purchased the building that housed the clinic's headquarters at 2254 N. Third St. and raised the rent to more than five times the $4,800 the clinic had been paying.

She moved the nonprofit to another building she owned at 2637 N. Fifth St. in 2012 and began charging rent as high as $75,000 a month — well in excess of what government assessors calculated as fair market value for a neighborhood of buildings that DeStefano described Wednesday as "bombed-out shells."

But the defense lawyer maintained Wednesday that those rents were justified by the significant amount of their own money that Tartaglione and Matos spent in outfitting their buildings to accommodate the rapidly expanding clinic.

"What landlord goes out and buys a building so the clinic will have a better place to stay?" he asked jurors. "Common sense will tell you that this has to be reflected somewhere in the rent."

The trial is expected to continue Thursday.