New president, new rules at San Jose school club after it was robbed of $30,000 in California

The money was meant for field trip buses, a kindergarten handwriting program and jump ropes.

Instead, some of the $30,000 stolen from a club that supports a south San Jose elementary school was spent at a nail spa, a piercing salon and Frederick's of Hollywood.
The embezzlement forced the resignations of two top leaders at the Baldwin Elementary Home and School Club. Both mothers, charged with felony grand theft, are headed back to court Thursday.
The scam also exposed lax financial oversight by the club's board and school administrators, and prompted the current club leader to crack down on how club money is spent.
"We've got to make sure this doesn't happen again," said Cheri Villarreal, 37, who took over as president of the club in September. "We have to be certain our books are where they should be, and that no one's stealing."
Prosecutors in July charged the former club president, Jennifer Lee Vasquez, 42, and Treasurer Wendi Marie Hayes, 28, with stealing about $15,000 each over six months. Villarreal estimated the club, which is a parental organization similar to a PTA, raises between $30,000 and $50,000 a year for things the Oak Grove School District can't cover -- in this case, to pay for buses for field trips, books for a kindergarten handwriting program, extra assemblies, and for an on-site counselor for the roughly 500 students at Julia Baldwin Elementary.
By the end of this summer, both women had paid back most of the money. Neither they nor their attorneys returned calls and e-mails seeking comment, although the court file indicates both women were tearful, apologetic and cooperative.



Vasquez is scheduled to enter a plea Thursday. Hayes pleaded not guilty in September. They each face a maximum of three years in prison if convicted.



Villareal, who has an accounting background, said the club had money in reserve to cover the loss until it is fully reimbursed. This isn't the only club or PTA that's been hit by such a scandal; similar crimes can be found in every state.



It happens "far more often than we'd like," said California State PTA Treasurer Diane Foote of Sunnyvale. "And it just makes me sick every time."



Foote added: "It's not just mothers either. It just kills me when it's the staff, like the librarian or someone like that who abuses the trust given to them. Transparency is the only way to avoid this. With good controls, anyone can stop this."



Such controls weren't in place last year at Baldwin.



"Having completely trusted Jen and Wendi," the vice president at the time wrote in her court filing, "I never asked to look at the bank statements."



Those statements showed Vasquez and Hayes used the club's charge and debit cards at Netflix, JCPenney, Old Navy and gas stations. On Nov. 30, 2009, the card was used to spend $60 at Splendor Nails. In January, the cards were used to spend $109.80 at Frederick's of Hollywood and $19.64 at the Piercing Pagoda.



Wells Fargo executives in March spotted the charges, including $2,000 and $3,000 withdrawals last Thanksgiving, and contacted the club's vice president, court records indicate.



When San Jose police contacted Vasquez and Hayes in April, the women said they had mixed up their club cards with their personal cards. Then, a police officer noted, Vasquez said she had been "short on cash," and borrowed the club's card with the intention of paying it back, although she later "lost track of how many times she used it."



E-mail exchanges show the school and Assistant Superintendent Chris Jew tried to work with the women, telling them they would keep the case quiet if they paid back the money. The case became public in November after an anonymous tipster called the Mercury News.



"Nobody knew except a handful of people," Villarreal said. "But we're a tight-knit community. People have been asking how they can help. A few even sent us fruit baskets."



Now, Villarreal is keeping tight reins on the club's purse strings and following general practices for most home and school clubs and PTA groups. Club members may no longer use debit cards. Two people must sign every check, and two members must count the money together in the staff lunchroom. Anyone who wants to purchase an item must fill out a form, which the principal must approve. The club is looking to upgrade its insurance in case of future theft, and an independent tax accountant has been asked to look at the books quarterly.



The toll has been hard on the school community, whose children, teachers and parents raised money through walk-a-thons, sold candy and cooked for barbecues.



"When I first heard, I cried," Villarreal said. "I got the chills. Holy cow. I was shocked and disappointed. But I wasn't going to turn my back on the club when they needed me most. I want to turn this into something positive. We have to show our children the right way to be."