Thursday, January 17, 2019

LA Charter Schools Founder Pleads To Embezzlement

The founder of Los Angeles charter school network Celerity Educational Group pleaded guilty Tuesday to conspiracy to misappropriate and embezzle public funds.
Vielka McFarlane admitted in a plea agreement filed in federal court in Los Angeles that she misspent $2.5 million in public education funds intended for Celerity students.
The felony charge stems from the 57-year-old Sylmar resident's habit of using her charter schools' credit cards to pay for expensive clothing, luxury hotel stays and first-class flights for her and her family, according to the U.S. Attorney's Office.
The bulk of the funds -- which partly came from the U.S. Department of Education -- were used without authorization to purchase a building for another charter school in Ohio. McFarlane also admitted improperly using public funds to pay the security deposit, rent and renovations at a soundstage and recording studio in Canoga Park, which was rarely used by students.
McFarlane founded Celerity Educational Group in 2004 and served as its CEO until April.
"When anyone repurposes public school funds for self-serving reasons, students suffer," First Assistant U.S. Attorney Tracy L. Wilkison said last month. "This case involving the former CEO of Celerity demonstrates our ongoing efforts to protect and safeguard public funds, and to hold accountable those who improperly use those funds for their own gain."
Between 2009 and 2013, McFarlane used credit cards issued to Celerity Educational Groups and Celerity Global Development to buy luxury items from the Salvatore Ferragamo boutique in Beverly Hills and high-end shops in Tokyo, customized recreational bicycles for her and her spouse, and purchase more than $5,000 in leather-making equipment used by a for-profit company in which McFarlane and her family members were partners, according to her plea agreement.
She also admitted to illegally using a school credit card to purchase round-trip airfare for her and family members to attend President Barack Obama's second inauguration in January 2013.
McFarlane further acknowledged that she did not reimburse Celerity Education Group or Celerity Global Development for any of the payments described in the plea agreement prior to the government's criminal investigation.
McFarlane, who is scheduled to be sentenced May 13, faces up to five years in federal prison, federal prosecutors said. She agreed to forfeit items purchased with public funds and may be ordered to pay $250,000 in restitution, the plea agreement states.

In June 2017, the U.S. Attorney's Office entered into an agreement with Celerity Educational Group, now known as ISANA Academies, in which ISANA recognized and acknowledged the misconduct committed by McFarlane, agreed to cooperate fully with the government's investigation, and agreed to implement certain reforms designed to ensure that similar conduct does not occur again.

WOMAN ALLEGEDLY EMBEZZLED FROM COLUMBUS HS BAND BOOSTER CLUB

A Columbus High School Band Booster is reportedly charged with embezzlement.
Tonya Danyel Holmes was arrested last week.
Sources told WCBI the investigation centers around checks and the band booster club.
Columbus police are only confirming more than one check was involved.
Columbus Schools Superintendent Cherie Labat confirmed to WCBI that a band booster was arrested and that person was not an employee of the district.
However, she did not identify that person.

Inwood woman accused of embezzling from South Berkeley Little League

 An Inwood, W.Va., woman accused of embezzling more than $5,000 from South Berkeley Little League over the course of several months allegedly told police that she needed the money because she was “down on her luck,” according to Berkeley County (W.Va.) Magistrate Court records.
Tabatha Chris Montanio, 37, of Lobo Lane was charged on one felony count of embezzlement, court records said.
She was released on a $10,000 bond, records said.
The embezzlement by the defendant, who was identified as the Little League committee’s treasurer, allegedly occurred between December 2017 and August, according to a complaint filed by West Virginia State Police Trooper G.W. Merkich III.
The transactions in question include several personal checks and cash withdrawals, including payments to Musselman Middle School Cheer Team, O’Roke Photo, FirstEnergy, Potomac Edison and “Fuzzy Tail,” court records said.
Memorandum entries list the defendant’s address, records said.
The total amount allegedly taken was $5,199.37, court records said.
The alleged embezzlement, which was reported to police in August, was discovered when the organization attempted to put a down payment on a suppression system for its concession stand required by the state fire marshal’s office.
When league officials provided debit-card information to the contractor, the organization discovered its account had insufficient funds, court records said. Little League officials told police that the funds only were to be used for the organization.
Organization officials also told police that Montanio passed a background check to be part of the committee, court records said.
When Montanio first was told about the Little League group’s claims, Merkich said the defendant didn’t say anything, then admitted she took the money from the organization, records said.

Aurora mom accused of stealing $21,000+ from parent-teacher group affiliated with child's school

 An Aurora mom has been charged with stealing more than $21,000 from the Parent-Teacher Community Organization at Village East Elementary School.
Police began investigating Ashley Ann Green after the school's principal, John Cramer, told them about suspected fraudulent activity involving the PTCO's FirstBank account.
Green became treasurer of that organization in 2016.
The arrest affidavit alleges that Green, 26, who lives about a block away from the school, made multiple ATM withdrawals, wrote checks out to herself, and failed to pay bills related to the group's fund-raising activities.
Las Vegas trip
The affidavit alleges that some of that ill-gotten money was spent in Las Vegas.
A bank statement included as evidence shows Green made two FirstBank debit card purchases at Lobster Me Grand Canal, a lobster roll eatery inside the Venetian Hotel, wrote out a PTCO "counter check" to herself for $1,100 and withdrew $300 from an ATM on Las Vegas Boulevard South.
Denver7 tried to contact Green to ask if she gambled the PTCO's money away. Her husband answered the door and said, "she's not here." We left a business card requesting a return phone call but have yet to hear back.
Oversight questions
Denver7 also reached out to the Parents' Council, a committee that oversees all PTCOs in Colorado.
We wanted to ask about the impact of the alleged theft on students, and why it took so long to catch the fraud.
Council President, Kristine Ritter, said she was not going to comment about anything and said, "no one from the council would comment."
Residents whose children or grandchildren attend the school were not happy to learn about the alleged embezzlement.
"If that's going to impact my grandchild's education, then I'm very upset about it," one woman said. "You know, I thought it was a good school and things were going good. She's getting a good education, but if that kind of stuff is happening, then that's very unsettling."
School district response
Abbe Smith, the executive director of communications for Cherry Creek Schools, called the alleged embezzlement, "very unfortunate."
When asked what the PTCO's funds would normally be used for, Smith replied, "The money can be used for things like purchasing technology. That could be computers or cameras. It can be used for all kinds of things -- reading programs, field trips, gym equipment or teacher appreciation."
Green has been charged with theft. Her next court appearance date has not yet been set.
Jefferson County case
similar case is being prosecuted in Jefferson County , where the previous treasurer of the Jefferson Academy Elementary PTO, Jessica Tafoya, allegedly stole more than $58,000.
She was the only authorized user of the PTO bank account from the time she was appointed as treasurer, in October of 2015, until September of 2017.
When a second individual was given authority to use the account, Tafoya sent an email to the PTO president saying she felt like "dog shit" and owed the PTO money.
She allegedly used the PTO's funds at gas stations, fast food stops, Kohl's, Target, Walgreens, Best Buy, Estes Park, Komotodo Sushi Bar and Gateaux Bakery.
Tafoya has been charged with theft of between $20,000 and $100,000.
Her next court date has not yet been set.

Paris Academy founder and friend face charges of embezzlement in Michigan


An online school closed abruptly in June, and now the founder of that school and her friend face embezzlement charges.
The Paris Academy was accused of inflating enrollment numbers back in late June.
Criminal charges have now been authorized.
Paris Academy operated out of a building in Saginaw Township. Shortly after the school was closed, the founder Nancy Paris, told ABC12 she had done nothing wrong.
"I think that this was politically motivated, and there were people in powerful positions that did not want this model to continue," Paris stated in September.
But these criminal charges indicate the Michigan State Police and the Saginaw County prosecutor's office disagree.
Three embezzlement charges, including one for more than $100,000, have been issued against the 47-year-old Paris. She also faces a conducting a criminal enterprise charge, which is a twenty year felony.
Also charged in the case is her friend, 46-year-old Jeffrey Machiela, who faces two additional firearm related charges, including felon with a firearm.
The complaint shows that Paris and Machiela share the same address.
The Paris Academy began operations in 2016 and Paris claims the academy had clean audits. The school receives per pupil funding from the state just like a traditional public school, but she says the state recently created new rules for cyber schools. She claimed her last student count in 2017-18 was 715 students, but the state did an audit and showed it only had 562.
That would mean the cyber school received $1.1 million more than it was allowed.
The criminal complaint claims the accused converted Paris Academy money for their own use, but its not clear if the charges are related to the possibility the school was using fake students to inflate its numbers.
We could not Paris or Machiela for comment and as of late Tuesday afternoon, both had not been arraigned as of yet. 

Woman accused of embezzling $230K from Michigan school

An Eau Claire woman has been charged with stealing nearly $230,000 while serving as secretary/treasurer at a private school in Berrien Springs.
Sarah Kurtz, 50, was arraigned Thursday before Berrien County Trial Court Judge Charles LaSata on a charge of embezzling $100,000 or more, a 20-year felony. 
Berrien County Prosecutor Michael Sepic said Kurtz is alleged to have taken the money between 2011 and 2018 while working for the Village Seventh-Day Adventist School. Last November a letter from Village Seventh-Day Adventist Church and School officials to church and school families stated that the school had been “defrauded approximately $229,000.” A copy of the letter was provided to The Herald-Palladium by a school parent.
At that time, Sepic said an investigation was underway by state police, but no charges had been filed. He said Friday it is now alleged that in her position as secretary/treasurer, Kurtz allegedly embezzled money by means of automatic bill payments, use of the school’s debit card for personal purchases, fund transfers to a personal account, and by cash payments. 
At her arraignment Thursday, bond was set at $10,000, with 10 percent posted for her release, Sepic said. Future court dates have yet to be set because, Sepic said, LaSata disqualified himself from hearing the case and other judges might do the same. Sepic said Friday he had not yet seen LaSata’s disqualification sheet so could not state a reason for the disqualification.
Sarah Kurtz is the wife of Berrien County Sheriff’s Lt. Martin Kurtz, who until recently was commander of the Marine Division. Sheriff Paul Bailey said Friday that with the retirement of Dan Jewell, Kurtz will become the department’s training lieutenant, and Fred Laesch will be in charge of the Marine Division. Bailey said the re-assignment had nothing to do with the case against Kurtz’s wife.
Sepic said that as part of the investigation, police looked into whether Martin Kurtz was aware of his wife’s activities related to the alleged embezzlement, and no evidence of that was found.
In the letter last fall to school and church families, the church pastor and school principal said that through restitution or insurance, the school will recover the lost funds. The officials said further that stricter internal controls and tighter systems of accountability have been implemented, and that the school’s budget is on solid ground.

Former Pappy Chuck’s owner stole $167,000 from Bellefonte church, police say

The former owner of Pappy Chuck’s Candy Shoppe embezzled more than $167,000 from St. John Lutheran Church, according to Bellefonte police.
Pastor William Osman and a member of the church’s congregation met Jan. 2 to discuss money that was missing from the church’s bank account. The two found inconsistencies and believed the church would be out of money in two years if the trend continued, according to court documents.
The investigation led police to the church’s treasurer, Chuck Kormanski, who held that role since 1998.
Police said the 56-year-old from Bellefonte wrote himself 379 checks over the past seven years, totaling $167,420.12. The first check was signed Dec. 25, 2011.
“With all the evidence collected to date, it appears (Kormanski) did write himself checks with the intention to deceive and steal from the St. John Lutheran Church over the past seven years for his own personal gain,” police wrote.
In a Facebook post, St. John Lutheran Church said it continues to cooperate with law enforcement and relieved Kormanski of his duties.
“We involved the Bellefonte Police Department as soon as we learned of this situation and we continue to be transparent with the congregation concerning what is happening,” the post said. “Meanwhile, we are continuing with our regularly schedule(d) worship services, as well as praying for everyone involved and affected by this situation.”
Kormanski was charged with 379 felony counts of theft by unlawful taking, 379 felony counts of theft by deception and 379 felony counts of receiving stolen property.
He was arraigned Monday by District Judge Kelley Gillette-Walker, who set monetary bail at $75,000. Kormanski did not post bail and is being detained at the Centre County Correctional Facility.
Kormanski opened his business in April and closed in December.
His preliminary hearing is scheduled for Jan. 23.