A former Baltimore City tax collector admitted Friday that for nearly a decade he accepted bribes in exchange for erasing residents’ outstanding municipal water and property tax bills, which prosecutors said cost the city more than $1.2 million.
Joseph Gillespie, 35, admitted to accepting payoffs as part of a plea agreement after federal prosecutors charged him in a separate wire fraud conspiracy case. U.S. Attorney Erek Barron said Gillespie and another defendant fraudulently obtained nearly $139,000 worth of COVID relief loans in 2021.
In addition to the $139,000, Gillespie also used his position as an employee of the city Department of Finance’s Bureau of Revenue Collections to collect more than $250,000 in payments between early 2016 and September 2023 in exchange for erasing property owners’ outstanding debts to the city, according to court documents.
Gerald Ruter, Gillespie’s attorney, said in an email that his client accepted responsibility for the bribery scheme, in addition to pleading guilty to conspiracy to commit wire fraud.
“He will continue to work in his community and make amends for the mistakes he has made,” Ruter wrote. “He has expressed his remorse.”
If a U.S. District Court judge accepts the agreement, Gillespie will be sentenced to serve between two and five years in prison, according to court documents.
The city first hired Gillespie in June 2006 to work for the finance department in the Abel Wolman Municipal Building on Holliday Street, according to a statement of facts. Beginning in 2016, Gillespie began “routinely” taking payments from residents who owed money to the city for outstanding water bills, citations, taxes and other financial obligations and marking them as paid in exchange for receiving bribes.
The payments were typically 10% to 15% of whatever the resident owed, and in exchange, Gillespie “remov(ed) or extinguish(ed) these financial obligations….thereby causing losses to the city…in excess of $1,250,000,” prosecutors said. Gillespie also accepted payments, without officials’ permission or knowledge, in exchange for delaying or postponing bill due dates, which prevented the city from placing liens on properties and auctioning them at an annual tax sale.
Once he received a resident’s payment, Gillespie would then mark the person’s financial obligation as “paid” in the city’s records system and send the person a photograph reflecting that they had paid when they had not, according to prosecutors.
Undercover FBI agents recorded multiple video and phone conversations in which Gillespie spoke in detail about his bribery scheme, according to prosecutors. In one recording, Gillespie confirmed accepting a $100 payment per property saying, “yeah, that’s basically how I do.”
Gillespie had help from multiple other people to carry out his bribery scheme, according to the statement of facts. He told an undercover agent during a phone conversation he “had a girl” in “water” (the city’s Water and Wastewater Bureau) who could “wipe some shit out,” meaning she could extinguish someone’s financial obligation. One co-conspirator referred “multiple” people to Gillespie in exchange for receiving their own bribes, while another co-conspirator paid Gillespie $2,500 in exchange for Gillespie erasing almost $12,000 worth of funds owed by that person to the city.
In another covert video, an agent recorded Gillespie saying he had the power to “wipe a bill off” of a person’s record or “put paid next to ‘em,” even when that person had not fulfilled their obligation to the city. During the same conversation, the agent recorded Gillespie saying, “there was a couple, extra miscellaneous bills that y’all had that I wiped off …. That sh– gone now.” In exchange for delaying payment on eight properties, Gillespie asked for and received $800 in cash from the agent, according to the statement of facts.
Gillespie’s scheme ended in September 2023, the same month he was indicted, according to court documents.
In addition to the bribery scheme, Gillespie paid a co-conspirator to help him apply for loans starting in July 2020 from Cross River Bank and the U.S. Small Business Administration to cover “various purported businesses.” Prosecutors said Gillespie falsely claimed that his real estate business, JAG Investments, had five employees and generated $20,000 in gross revenue in 2019 to receive loans from the federal Paycheck Protection Program.
In a March 2021 application, Gillespie claimed JAG had 19 employees and a monthly payroll of almost $56,000. He also doctored a tax form claiming he had paid his employees a total of $276,209.72 in 2019. In reality, JAG had no employees and did not report withholding income taxes or paying anyone that year, according to prosecutors. Gillespie also fabricated a February 2020 Wells Fargo bank statement to support the application for PPP funds, prosecutors said.
In exchange for submitting all of the documentation and applying for the loans on his behalf, Gillespie paid the co-conspirator a “kickback” that equaled about 27% of the loan amount, or $38,000, according to court documents.
The same day, Gillespie researched “ppp loan audit,” “ppp loan how to pay myself,” and “what can PPP loan be used for” on YouTube. Gillespie then hired a payroll services provider to “make it appear” as though the loans were being used for legitimate purposes, according to the statement of facts. The provider withdrew money from JAG’s bank account and made about $60,000 worth of payments via CashApp and Zelle to supposed JAG employees, including Gillespie, his brother, his friends and associates, and one of his fellow bribery co-conspirators.
None of the people who received payroll payments worked for JAG, according to federal prosecutors. Gillespie used the money to pay himself, resolve “various personal debts,” and to buy and renovate several properties in Baltimore, according to the statement of facts.
Sentencing is set for Dec. 9.
