Ex-Museum Chief Charged With Scamming $1.5 Million for Clothing, Espresso Machine

PHILADELPHIA – For 17 years, officials at the Independence Seaport Museum thought they had a capable, trustworthy leader as their captain.

Instead, the man at the helm used the museum as his "personal piggy bank" to fund a lavish lifestyle that included boats, artwork, jewelry, upscale clothing and high-end housewares, U.S. Attorney Patrick Meehan said Monday.

John S. Carter, 57, of Osterville, Mass., was charged Monday with tax evasion and defrauding the maritime institution out of more than $1.5 million. Carter's lawyer said he plans to plead guilty.

"Mr. Carter expects to plead guilty to the charges set forth in the information, although he doesn't necessarily agree with all the details set forth in the information," his attorney Mark Cedrone said Monday. "He is prepared to accept responsibility."

Authorities say Carter, the museum president, took advantage of lax financial controls to be reimbursed for all kinds of personal purchases. Chinese doors, plasma TVs, a diamond ring, gourmet cookbooks -- all were inappropriately charged to the museum, authorities said.

The museum even unwittingly paid for a two-story carriage house to be built next to his Cape Cod home after Carter said the money was being used to purchase maritime art, according to court documents.

"He spent with reckless abandon, went to extraordinary lengths to conceal his fraudulent activities, and abused the trust placed in him by the museum," Meehan said.

The museum filed a lawsuit in Massachusetts against Carter in January that accuses him of defrauding the institution of $2.4 million. He was fired last year.

Museum board chairman Peter McCausland said he hoped Carter's guilty plea might help expedite the civil suit. He noted the museum, once struggling, has been improving its finances and hopes to name a new president next month.

"Looking back on it, do I wish we were more vigilant and caught it earlier? Certainly," said McCausland. But, he added, Carter "was a very trusted employee."

The charges filed Monday cover alleged offenses dating to 1997, including that Carter spent more than $335,000 in museum funds to build a carriage house and make other property improvements.

Carter also used about $50,000 in museum funds to buy a wooden eagle that once decorated an old riverboat and a 19th century narwhal tusk, the information says.

Carter's appreciation of boats also ended up wrongly costing the museum about $900,000, authorities said.

In 1997, the museum transferred the title of the Albacore, an antique sailboat, to Carter's personal company for $1 -- a transaction never approved by the museum's board of directors, authorities allege. Between 1998 and 2004, Carter submitted fraudulent invoices to get the museum to pay for more than $408,000 in renovations to the vessel; he eventually sold the boat for $190,000 and kept the proceeds, the information says.

In 2002, the museum bought a $275,000 power boat at Carter's direction, though the board of directors never approved it, authorities said. Carter claimed he was holding the boat to resell later at a higher price, but instead transferred ownership of the vessel to his company, changed its name and used it for personal pleasure, according to court documents.

In 2005, Carter commissioned a Maine company to build a $100,000 wooden sailboat for his personal use. The museum paid about $71,000 of the bill after Carter submitted fraudulent invoices, the information says.

Carter is charged with tax evasion for failing to report the museum funds as income. He is also charged in a fraud scheme involving ownership of a life insurance policy.

The Independence Seaport Museum opened in 1961 as the Philadelphia Maritime Museum. After moving several times and adopting its current name in 1995, the museum now has a waterfront building on the Delaware River and owns the Spanish-America War cruiser USS Olympia and the World War II-era submarine USS Becuna.