IN THE UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF PENNSYLVANIA. JENELLE FRANCES SCOTT, on behalf of herself and all others similarly situated, Plaintiffs v. 10-cv- THE PHILADELPHIA HOUSING AUTHORITY, 7 ‘THE PENNSYVANIA INSTITUTE OF 10 4723 AFFORDABLE HOUSING PROFESSIONALS, PHA-TENANT SUPPORT SERVICES, INC., JURY TRIAL DEMANDED CARL GREENE, (individually and in his offici capacity), DIANE ROSENTHAL, (individually and in her official capacity) KIRK DORN, (individually and in his official capacity), RICHARD ZAPPILE, (Individually and in his official capacity) and, ASIA CONEY(individually and in her official capacity) Defendants :_ CLASS ACTION COMPLAINT Plaintiff, Jennelle Frances Scott, on behaif of herself and all others similarly situated, by and through her undersigned counsel, complain of defendants, as follows: 1 PRELIMINARY STATEMENT 1. Defendant, the Philadelphia Housing Authority (PHA) has an annual budget of $345,000,000. (http://www.pha.phila,gov/aboutpha\, funding\index.htm|, attached as Exhibit “A”) The United States Department ofHousing and Urban Development (HUD) provides most of defendant, the PHA’s, funding. Defendant, the PHA, receives this federal funding through the Moving to Work Demonstration Program (Moving to Work) and the Annual Contributions Contract (ACC). Because Defendant, the PHA, receives Federal funding, it must disclose, among other things, lobbying activities it pursues to influence Federal transactions. In defendant, the PHA's, Annual Reports to HUD Defendant, Carl Greene (Greene), did not disclose any lobbying activities. 2. Plaintiff, Jenelie Frances Scott (Scott), began working for defendant, the Philadelphia Housing Authority (PHA), in October 1989 in the capacity of Clerk Typist. In September 2001, she became the Administrative Assistant to defendant, Car! Greene, who is the Executive Director of defendant, PHA. She was promoted to this position after interviewing with defendant Greene. Soon after plaintiff began working as defendant, Greene's, administrative assistant, she was compelled to contribute money and gifts to defendant, Greene, for parties that she was required to attend. Defendant, Richard A. Zappile, the PHA Chief of Police, “said that he organizes four parties a year for top managers and attorneys who do contract work for the agency, and that participants, including Greene, pay their own way. ‘They are privately run and the money goes towards the dinner.” (See PHA chief also accused of sex harassment, The Philadelphia Inquirer, August 19, 2010, attached as Exhibit “B.") For defendant, Greene's 1.2 anniversary. defendant. Zannile sent an e-mail lanuary 29 to 24.senior staffers and others for a party at the Prime Rib. (See Top PHA staff solicited to honor Greene, The Philadelphia inquirer, August 20, 2010, Exhibit “C.") The payment for that party was in cash or in check made out to defendant, Zappile. (Id.) Defendant, Zappile, had previously organized Greene's 10% Anniversary Party. (Id.) Defendant, Zappile, sent invitations on defendant, Greene's stationary, seeking donations for defendant, Tenant Support Services, Inc. (TSSI), a PHA non- profit on which defendant Greene was a board member. (Id.) Invitees were asked to donate $1,000.00 to $5,000.00. (Id.) Defendant, TSSI claims that it “is committed to improving the lives of public and assisted housing residents through innovative support services and programs.” (See http://tssi-phila.org/about_us.htm|, attached as Exhibit “D.") But the money TSSI received from defendant, Zappile’s, solicitation, went towards a lavish 10 Anniversary party for defendant Greene. Defendant, TSSI received more than thirty-eight thousand dollars ($38,000.00). (See Sweet deal at PHA: figure salary, $654-a-month rent, Philadelphia Daily News, August 21, 2010, Exhibit “E.”) Approximately half of the money went to pay for the party, “which left TSSI with a $21,934 profit.” (/d.) However, defendant, PHA’s spokesperson Kirk Dor (Dorn), claims that “all the proceeds had gone to a scholarship fund for students living in public housing.” (Id.) Presumably, defendant, Dorn, wasreferring to the Carl R. Green Achievement Scholarship. (See Pathway to a Higher Education, Exhibit “F.”) 3. __ In addition to the money demanded for gifts and parties for defendant, Greene, Plaintiff, Scott, was forced to donate a portion of her paycheck to a non-profit corporation defendant, Greene, created—defendant, Pennsylvania Institute of Affordable Housing Professionals (PIAHP). On March 16, 2006, Maria Johnson, an employee of defendant, PHA, incorporated defendant, PIAHP. (See PIAHP Articles of Incorporation attached as Exhibit “G.") In its Articles of Incorporation, defendant, PIAHP, claims it is “exempt from income tax under Section 501(a) of the Internal Revenue Code as an organization described in Section 504(c)(6) of the Code.” (Id.) ion of “Regulation 1.50:1(c\(6)-1 defines a business league as an associ persons having a common business interest, whose purpose is to promote the common business interest and not to engage in a regular business of a kind ordinarily carried on for profit. Its acti ies are directed to the improvement of business conditions of one or more lines of business rather than the performance of particular services for individual persons.” (See Exempt Organizations- Technical Instruction Program for FY 2003, IRC 501(c)(6) Organizations, page K- 3.)Representatives of defendant, PHA, told employees that the sole purpose of defendant, PIAHP, was to lobby HUD in an attempt to prevent funding cuts that were forcing defendant, PHA, to lay off employees. In fact, James Lamond, a former Philadelphia Housing Authority Police Officer, attended a meeting where he overheard discussions regarding Defendant, PIAHP. At that meeting, Officer Lamond heard that Defendant, PIAHP, “would be used to solicit federal funds from HUD." (See Affidavit of James Lamond, attached as Exhibit “H. Defendant, the PHA, required employees to contribute a portion of their weekly paycheck or make a lump sum annual contribution to defendant, PIAHP, to fund the aforementioned lobbying activities. However, based upon the fact that defendant, Greene, never disclosed any lobbying activities for HUD funding, it appears that defendant, PIAHP's, stated purpose is questionable. This is further supported by the fact that, on or about January 9, 2010, defendant, the PHA, announced that it laid off twenty-two percent (22%) of its workforce. Yet, defendant, PHA, continued taking money from employees’ paychecks that went to defendant, PIAHP. Defendant, Dorn, is listed as the President of PIAHP. He claims employee payments to defendant, PAIHP, were voluntary. (See Sources: PHA staff forced to Join Greene party, Daily News Article, August 20, 2010, Exhibit “I.”) Defendant, Dorn, also referred to defendant, PIAHP, as a fund that pays for social and adiicatinal avente fd \ Ha elaime that the nlan for defendant PIAHP “was toreach out and form a network of similar entities. [It] really didn’t get that far.” (Id.) Astonishingly, he admitted that the employees pé “to join something that [was] going to improve their careers.” (Id.) 4. On behalf of herself and all others similarly situated, plaintiff seeks to permanently enjoin defendants’ deduction of monies from Class member paychecks and the pattern, practice and policy of unlawfully taking and converting employees pay to the benefit of defendant Greene and unlawfully using federal grant monies for the personal profit of defendants. Plaintiff also seeks to enjoin defendants from soliciting monies for defendant, Greene's, parties and gifts. At all times relevant hereto, defendants Greene, Rosenthal, Dorn, Zappile and Coney did combine, conspire, and agree to deprive plaintiff and plaintiff class of those rights secured to them pursuant to the Fifth and Fourteenth Amendments to the Constitution of the United States, 42 U.S.C. § 1983, the PHA Moving to Work Program, the Anti- ickback Statute, 42 U.S.C. § 1320 by wrongfully collecting monies which personally benefited defendants, including Defendant, Greene, in violation of plaintiffs’ federal and state protected rights, Moreover, the plaintiff and plaintiff class seek compensatory and puniti damages for violations of state law claims under the Wage Payment and Collection Law, 43 Pa.Stat.Ann § 260.1, et seq., the Anti-Macing Statute, 25 P.S. § 2374 and conversion. Defendants’ wrongful and deceptive acts violated plaintiff and plaintiff class’ rights, immunities and privileges as guaranteed by the