The grant is part of the commission’s publicly funded program to support small businesses in Erie County that are owned by or serve the BIPOC community, for Black, Indigenous and people of color.
A week after his fitness business won the grant, Spearman pleaded guilty in federal court in Erie to a felony count that he distributed nearly 38 grams of crack cocaine in 2017.
Spearman, 55, who was indicted on that single count in February 2021, faces a term of probation to two years in federal prison at his sentencing on Sept. 12.
The May 24 guilty plea has led Diverse Erie to review the grant it awarded to Spearman’s business, Personal Results Fitness, at 524 W. 17th St., near Walnut Street in Erie’s impoverished Little Italy neighborhood.
A day after the Erie Times-News informed Diverse Erie’s chief administrative officer of Spearman’s guilty plea, Diverse Erie said it is investigating Spearman’s case.
Diverse Erie’s solicitor said the commission will not disburse the $15,000 grant to Spearman’s business until the investigation is over and until the commission discusses the matter at its next meeting, on July 18.
“The commission is investigating the recent information it has received regarding Mr. Spearman’s guilty plea and how that will impact the grant,” the solicitor, Tim Wachter, told the Erie Times-News on Thursday. “The grant was issued to his business, not to him individually, and the commission does not perform criminal background checks on the owners of business applicants.”
Wachter also said that Diverse Erie had yet to receive an executed grant agreement from Spearman’s business. The agreement details all the reporting requirements for Personal Results Fitness, Wachter said. Until Diverse Erie receives a signed agreement and it completes its investigation, “it is under no obligation to fund the grant,” Wachter said.
Spearman’s grant application for Personal Results Fitness lists him as the sole proprietor and owner. The application, which the Erie Times-News obtained through a request under the Right-to-Know Law, states that Personal Results Fitness was established in 2007 and that it provides “training and education to the community.”
The application states that Personal Results Fitness serves underprivileged youth, “most of whom are young black men,” and that Spearman and his team train many of them to wrestle and box. Personal Results Fitness intends to use the grant money to expand its gym, according to the application.
The application does not mention Spearman’s criminal history.
Diverse Erie said it did not know about Spearman’s criminal case
Diverse Erie had been unaware of the active criminal case against Spearman, said Wachter and Diverse Erie’s chief administrative officer, Gary Lee.
Lee said Diverse Erie does not perform criminal background checks on grant applicants partly because of the large number of applications it receives.
For its latest round of grants, Diverse Erie received 75 applications and awarded a total of $300,000 in grants to 25 businesses, including Spearman’s. Diverse Erie uses Erie County’s share of pandemic-era American Rescue Plan money to fund the commission’s Small Business Mini Grant program. Diverse Erie was originally known as the Erie County Diversity, Equity and Inclusion Commission.
Lee also said the grant process is “predicated on being for a business,” meaning that Diverse Erie’s evaluates the applicants using business-related criteria. He said Diverse Erie considers such factors as applicants’ personal and business taxes, number of employees, level of sales and areas of concentration.
Diverse Erie must also abide by the anti-discrimination regulations the Erie County Human Relations Commission. Its ordinances prohibit discrimination based on “criminal history” as well as a number of other factors, such as race, sex and gender identity.
‘We look at it from a business standpoint’
For Diverse Erie, grant recipients are businesses located in Housing and Urban Development Qualified Census tracts that primarily serve beneficiaries earning less than 60% of the median income in Erie County. The grants range from $5,000 to $20,000.
“We look at it from a business standpoint,” Lee said. “It is strictly based on the business — on the application itself.”
In light of Spearman’s criminal case being “active,” the situation warrants further review, Lee told the Erie Times-News on Wednesday, when the newspaper informed him about Spearman’s guilty plea.
“Now that we know of it, the commission is going to take a look at it,” Lee said.
“That may be something we have to take into account,” Lee said. “We may have to revisit that, because it is government money.”
Lee on Wednesday said he would discuss the matter with the commissioners and Wachter, the solicitor.
Wachter then commented on Thursday.
Spearman says fitness business is for ‘at-risk youth’
After he was awarded the $15,000 grant, Spearman said the money would boost his business.
“We deal with over 100 at-risk youth,” Spearman, who is Black, told the Erie Times-News on May 17. “We’ve been a quiet organization for years, but it’s time for us to start getting a little exposure so we can make sure that these kids have what they need.”
“This is a big help,” Spearman also said. “This will be a part of the money that will go towards our extensions on the back of our gym. I’m very grateful for this board agreeing to take care of my facility in Little Italy where there’s a lot of at-risk youth and poverty.”
Spearman has been free on a $10,000 unsecured bond since he was indicted on Feb. 17, 2021. Following his May 24 plea hearing, which the Erie Times-News attended, Spearman said that he had been charged “a long time ago.”
“I just want it to get it behind me,” Spearman said of why he pleaded guilty.
He declined further comment when the Erie Times-News contacted him Thursday about Diverse Erie’s decision to investigate his case.
Spearman is due a break at sentencing under plea deal
The Erie Times-News published a story on Spearman’s indictment after the case was unsealed on March 31, 2021. The Pittsburgh-based U.S. Attorney’s Office for the Western District of Pennsylvania, which includes Erie, issued a news release on the indictment. The Erie Times-News story and the news release are still accessible on the internet.
The case took several years to resolve because Spearman’s lawyers filed several motions to extend deadlines for filing pretrial motions, according to court records. Spearman in February 2023 got a new court-appointed lawyer, adding to the defense’s need for more time.
By pleading guilty, Spearman admitted to selling 37.9 grams of crack — about 1.3 ounces — for $2,800 in an undercover buy on July 14, 2017, according to evidence Assistant U.S. Attorney Paul Sellers presented at the plea hearing. Sellers said the FBI captured the exchange on audio and video and watched it under surveillance.
Spearman was indicted on a count that he distributed more than 28 grams of cocaine. A federal conviction for having at least 28 grams of crack — about an ounce — typically triggers a mandatory minimum sentence of five years.
Spearman escaped the mandatory minimum sentence as part of the plea deal. He pleaded guilty to distributing “a quantity” of crack rather than an amount that was more than 28 grams, according to the plea letter. The letter states that the change reduces Spearman’s potential sentence to probation to two years in federal prison, according to the federal sentencing guidelines.
The U.S. Attorney’s Office agreed to the change in accordance with what is known as the “Garland memo,” after U.S. Attorney General Merrick Garland, Sellers said in court. The memo, which Garland issued on Dec. 16, 2022, directs U.S. attorneys to apply sentencing standards for powder cocaine to crack cocaine cases, when appropriate.
The change is meant to eliminate the sentencing disparities for defendants convicted of distribution related to powder cocaine as compared with those defendants convicted of distribution related to crack. Before the memo, the length of federal sentences for crack were typically more than those for offenses related to powder cocaine, with a larger percentage of Black defendants sentenced for crack.
Spearman was sentenced for crack before
Spearman’s current case in U.S. District Court in Erie is not his first.
In March 1996, he was sentenced to two years and nine months in federal prison and three years of supervised release, according to court records. Spearman, then 27, received the sentence after he pleaded guilty in October 1995 to a count that he possessed several grams of crack with the intent to distribute in Erie in 1994, according to court records and the Erie Times-News’ accounts of the case.
Spearman returned to federal court in Erie in July 2021. He was not a defendant. He was a witness for the U.S. Attorney’s Office in the cocaine case against Adelfo Rodriguez-Mendez, who ran what was known as the East Coast Monster Garage in the 400 block of West 12th Street in Erie.
Rodriguez-Mendez, known as “Mexican Mike,” was convicted at trial of using the garage as a base for a drug-trafficking ring from August 2015 to June 2017. He was sentenced in February 2022 to 18 years in federal prison.
Rodriguez-Mendez argued that the evidence was insufficient to convict him. The presiding judge, Stephanie L. Haines, cited the testimony of Spearman and other witnesses when she rejected Rodriguez-Mendez’s arguments in an opinion issued in December 2021.
The U.S. Attorney’s Office, Haines said in her opinion, presented testimony of witnesses including “Steven Spearman, all of whom testified as to Defendant’s knowledge of, and active participation in, the drug distribution activities occurring at the East Coast Monster Garage.
“The testimony from these individuals detailing events involving Defendant that took place over multiple years suggested a longstanding pattern of illicit activity between them and the Defendant and others, from which a rational juror could conclude that Defendant understood that he was participating in a drug distribution conspiracy.”
Contact Ed Palattella at epalattella@timesnews.com or 814-870-1813. Follow him on X @ETNpalattella.
This article originally appeared on Erie Times-News: His Erie business got DEI grant. Then he pleaded guilty in crack case
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