Friday, January 31, 2014

Former Carterville School Treasurer Pleads Guilty to Embezzlement, Theft

A former Williamson County school official has admitted to stealing. Thursday morning, Todd Frazier pled guilty to embezzlement and theft. 
Frazier, 31, was fired from his job as Carterville school district treasurer two years ago after funds turned up missing. 
He was indicted on more than a dozen charges last May, but Thursday, he only admitted to one. Frazier and the judge agreed, he abused his position of trust when handling the Carterville School District's money.
Frazier walked out of the federal courthouse in Benton with a smile on his face. When asked if he would like to say anything on camera, he replied, "No comment, thank you."
School leaders fired Frazier in February 2012 after an audit revealed missing funds. He was indicted on 16 counts and first pled not guilty to embezzlement, theft, forgery, wire fraud, lying to the FBI, and attempting to access computer files at the Bank of Herrin.
Thursday morning, he pled guilty to one count of embezzlement and theft. "It was just a guilty plea. He pleaded guilty straight up," said his attorney John Stobbs.
Frazier admitted to pocketing between $70,000 and $120,000 in the fiscal year ending in June of 2010.   
Judge Phil Gilbert found him guilty. He faces up to 10 years in federal prison, a fine of $250,000 and mandatory restitution.
According to his lawyer, Frazier no longer lives in the area. "He lives in Michigan, which is where he was born and raised." When asked if Frazier had a job, Stobbs replied, "Not yet."
Frazier will return to court for his sentencing on May 8.
Carterville Superintendent Bob Prusator says the district has changed some of its policies and procedures, like contracting out payroll services, to ensure this doesn't happen again.
BENTON -- Former Carterville School District Treasurer Todd Frazier stood in a federal courtroom Thursday morning and pleaded guilty to embezzlement and theft.
Frazier was fired from the school in February of 2012 after an audit revealed missing funds. Federal investigators accused him of defrauding the district over a four year period.
Frazier, 31, now of Grand Rapids, Michigan, was indicted on 16 separate counts. He first pled not guilty to embezzlement, theft, forgery, wire fraud, lying to the FBI, and attempting to access computer files at the Bank of Herrin.
On Thursday, he admitted to pocketing between $70,000 and $120,000 in the fiscal year ending in June of 2010. Judge Phil Gilbert found him guilty.
His sentencing is scheduled for May 8. Frazier faces up to 10 years in federal prison, a fine of $250,000, and mandatory restitution.

Ex-Girl Scouts official pleads guilty to embezzling $370,000

A former top official for the Girl Scouts of Greater Los Angeles on Wednesday pleaded guilty to one count of mail fraud and one count of money laundering.

Channing Smack, 51, of Marina del Rey, was also ordered to pay about $370,000 that prosecutors say he embezzled from the youth organization known for its annual cookie sales.
Girl Scout officials say about $250,000 of that amount has already been recovered.
“We were outraged that a trusted member of our staff would violate the fundamental values we teach our girls every day,” said Carol Dedrich, the organization's chief external relations officer.
Smack had been accused by federal prosecutors of laundering $50,000 of the estimated $370,000, a federal offense that carries a maximum sentence of 10 years in federal prison.

Smack was arrested Dec. 17 after he started to cash in some of the stolen money.
According to an affidavit by FBI Special Agent Ryan Bell in support of the federal criminal complaint, Smack withdrew $64,500 on Monday, Dec. 16 from accounts believed to contain proceeds from the scheme.

The alleged withdrawal occurred an hour after he was confronted by FBI agents, authorities said.
Smack was responsible for managing the organization's 22 Los Angeles area properties. Girl Scouts officials became suspicious of Smack's actions and hired private investigators, who uncovered his alleged connection to a private contractor who supposedly did work on the properties.

In the last two years, Smack approved invoices for services supposedly provided by a firm called ZB Land Maintenance & Engineering, which is registered under the name of Smack’s deceased brother, Zachary Bryan Smack, according to an affidavit in the case.

The Girl Scouts issued 23 checks to ZB that totaled $368,278 between August 2012 and October 2013, according to the court document.
FBI agents obtained evidence showing most of the checks to ZB were deposited into one of two bank accounts opened under the names of the company and Smack’s deceased brother.
According to the affidavit, bank surveillance photographs show an individual who looks like Smack using the bank accounts to make deposits or withdrawals.
Federal authorities served seizure warrants on three bank accounts believed to contain embezzled funds — the ZB account and two personal accounts in Smack’s name, into which he is believed to have transferred funds derived from the Girl Scouts checks.

During an hour-long interview Dec. 16 when he was confronted by FBI agents, Smack asked FBI agents: "What am I looking at?"
When agents asked what he meant by that, Smack answered, "Am I going away for life?"
Smack is scheduled to be sentenced May 27.

Saturday, January 25, 2014

Accused school embezzler gets psychological evaluation

A psychological evaluation has been ordered for a Tazewell County woman accused of embezzling from the school system.
Willie Kathy Hicks was scheduled for trial Jan. 14 on 15 counts of embezzlement and one count of money laundering.  Monica Gonzalez, attorney for Hicks asked Judge Jack S. “Chip’ Hurley, Jr. to have Hicks evaluated for competency to stand trial
Hurley granted the request and scheduled the next hearing in the case for April 21. Assistant Commonwealth’s Attorney Melanie Menefee said Hicks would likely be sent to Marion for the evaluation.
Hicks was indicted by the grand jury in October of last year and is accused of taking $300,000 from the school system during her years of employment in the central office and later as secretary and bookkeeper at Tazewell Middle school.
The Virginia State Police investigated the case after receiving a report of missing funds from Tazewell Middle School.  Hicks was released on bond by a magistrate following her arrest and retained the services of Gonzalez prior to her arraignment in circuit court last October.

Former McBain school secretary charged with embezzling student fundraisers

 A former secretary for McBain Rural Agricultural Schools has been charged in Missaukee County with stealing funds collected for student fundraisers.

Dawn Lynette Boonstra, 43, of McBain, has been arraigned in 84th District Court on a count of embezzlement by an agent or trustee of more than $1,000 but less than $20,000, according to court records. Boonstra was a secretary at McBain High School and had worked for the school system for 14 years, according to Superintendent Mike Harris.

Boonstra was fired from her position in December prior to the Christmas break, Harris said.

The secretary had been watched for “some time,” said Harris, who described the funds that were taken as internal accounts for student fundraisers.

Exactly how much money is suspected of being missing is still in the process of being determined, although Missaukee County Prosecuting Attorney William Donnelly Jr. said he is comfortable that the amount is more than $1,000 but less than $20,000. Forensic accountants are looking into the matter and intend to come up with an estimate, Donnelly said.

The matter came to the school’s attention when a shortage in the fund was not enough to cover expenses, according to Donnelly.

“It's too bad,” Donnelly said.

Boonstra was released on a personal recognizance bond.

Embezzlement by an agent or trustee of more than $1,000 but less than $20,000 is punishable by a maximum of five years in prison and/or a fine of $10,000 or three times the amount in question.

A preliminary exam is scheduled for 1:30 p.m. on Feb. 19.


As parent-run youth sports programs go, this one seemed to be thriving. More than 100 third- through sixth-grade girls competed in volleyball against girls from five other programs, learned skills from high school players and got to attend summer camps.

But when Northview Public Schools officials discovered the nonprofit program’s treasurer had embezzled thousands of dollars from the group, they realized they needed to require tighter financial controls – not just of the volleyball program but all community-based groups that use their facilities.    

The embezzlement of nearly $18,000 from Northview Girls Youth Volleyball, which is not affiliated with the school district, reveals the need for all districts to closely monitor community organizations that use school facilities and serve students, but are not formally affiliated, officials say.

 “We’re a reflection of the issues in the community,” said Mike Paskewicz, superintendent of Northview Public Schools. “Anytime you’ve got adults and money mixed, there’s a possibility of inappropriate behavior.

“The thing I always remember is that 99 percent of our adults are doing the right thing for the right reasons,” Paskewicz added. “They handle those funds appropriately.”

Tennille Maas-Rasmussen, however, did not, authorities say. The former treasurer of Northview Girls Youth Volleyball pleaded guilty in Kent County Circuit Court on Dec. 4 to embezzlement over $1,000 and less than $20,000. She is scheduled to be sentenced Jan. 27.

Officials say Maas-Rasmussen embezzled the funds over three years, from January 2010 until early this year, when the program director discovered funds missing from its accounts. Maas-Rasmussen has reimbursed $3,000 of the stolen funds.

Stricter Accounting Required

After learning of the alleged embezzlement in February, Northview school officials moved quickly to tighten financial controls. All youth sports organizations using their facilities, including Rocket football and basketball, and club sports such as lacrosse and crew, were asked to submit program summary sheets. Officials then recommended changes to strengthen financial checks and balances.

A key change was to require all the groups to have at least two signatures on any movement of funds. That was to prevent the kind of misuse practiced by Maas-Rasmussen, who could cash checks and move funds into her personal account with her signature alone, Paskewicz said.

Northview Girls Youth Volleyball now requires two signatures to pay a bill, cash a check or make any other transaction, said Kelsey VanZanten, the program’s director since 2010. She and a co-director are named on a checking account at a bank that neither uses for personal accounts, she said.

“We’ve really tightened it down,” said VanZanten, a teacher at East Oakview Elementary whose daughter was in the program. “Nothing can happen without two people’s signatures.”

The group’s funds come from fees of $45 per player, fundraisers, concession sales and T-shirts, VanZanten said. The money is spent on uniforms, volleyball nets and volleyballs at $25 apiece for 18 teams. The nonprofit program’s 36 coaches all volunteer, she said.

The teams practice at North Oakview Elementary and host games at Highlands Middle School. They compete against teams from the Kenowa Hills, Rockford, Sparta, Coopersville and Tri County Area school districts. Like other community sports groups, they are charged for use of school facilities, must file financial reports and have their volunteers undergo state police background checks.

Similar Problems Elsewhere

Other Kent County districts have faced financial abuses by parent-based groups in recent years, and have also taken measures to prevent them.

 In 2011, a former treasurer of Lowell Area Schools Athletic Boosters pleaded guilty to embezzlement, was sentenced to jail time and ordered to repay the boosters $98,588, authorities said. The boosters are a nonprofit separate from Lowell Area Schools.

Superintendent Greg Pratt said the athletic boosters subsequently revised their policies, and that the school district reached out to other groups to make sure they had adequate safeguards. The school district works closely with groups such as a wrestling club and band boosters and regularly reviews procedures with community nonprofits, Pratt said.

 “All these people have such great intentions,” Pratt said. “They work really hard on behalf of their organizations, and they want to see a tremendous amount of success. But that can really go awry very quickly by one person’s poor choice.”

In Caledonia Community Schools, the former treasurer of the Caledonia Elementary School PTO was sentenced in 2006 to five years’ probation for embezzlement and ordered to repay more than $45,000, according to authorities. Superintendent Randy Rodriguez, who was principal of Caledonia Elementary at the time, said she made restitution in full.

To discourage such incidents, the district has given PTOs and sports boosters software programs to help manage their bookkeeping, Rodriguez said. The schools encourage groups to perform audits as registered nonprofits, and this year began requiring organization leaders to attend presentations by the district finance director.

“It brings a consistency to how our organizations manage money,” Rodriguez said. “It doesn’t change with each new board or treasurer that comes in.”

Worthwhile Risks, Personal Hurts

Though they can’t completely eliminate the risk of financial or other misdeeds by community-based organizations, officials say, the risk is more than offset by significant benefits.

“We wouldn’t be able to provide near the enrichments to our kids without the support of our parents and our community,” Rodriguez said. “We couldn’t do it without them.”

“The positives far outweigh the negatives,” Pratt agreed. “We have thousands of volunteers giving thousands of hours across Kent County (who) enhance our students’ lives by what they do.”

However, Pratt admitted such incidents hurt the schools’ image, adding, “We always want to be good stewards. When you have someone close to you who broke that trust, it feels like a reflection on the whole community, especially in a small community like ours.”

That broken trust can hurt on a personal level, too. VanZanten, head of Northview Girls Youth Volleyball, said she was friends with Maas-Rasmussen and had one of her daughters in class. VanZanten called the incident “devastating” for herself and sad for all involved.

“You trust somebody and give them the benefit of the doubt,” VanZanten said. “You never suspect they’re making such poor choices.

“I hope we don’t have to go through something like this again in Northview. It shows you really have to be careful.”

Sentence continued in ex-pastor embezzlement case

An ex-pastor who pleaded no contest to stealing money from a Clearlake church had his sentence hearing continued Tuesday afternoon at the Lake County Courthouse.

Bruce Stark, 63, will have to wait for his sentence for roughly a month after Judge Andrew S. Blum granted the defense and the court time to study evidence that could affect Stark's sentence.

Stark faces up to three years in state prison, Deputy District Attorney Sharon Lerman-Hubert said.

Defense attorney Thomas Quinn, who said a proper punishment for Stark would be probation, asked for the continuance after saying that he had evidence that suggests Stock stole significantly less than the nearly $100,000 the prosecution alleges.

Quinn also challenged an alleged 1970s, out-of-state murder conviction cited in the probation office's sentence report and said that, based on the language in the report, the allegation did not apply to Stark's situation.

If found true and relevant, the conviction allegation could have an impact in Stark's sentence length.

Judge Blum said he understood Quinn's interpretation but that he did not have enough information at the moment to make a ruling. He then said that he found cause for a continuance and added he would further study Quinn's allegation.

Stark was arrested after allegations that that he stole tens of thousands of dollars in cash and property from the Hilltop Apostolic Church while he was a pastor from 2002 to 2007. His wife Shanell Stark, who pleaded no contest to a misdemeanor charge related to the embezzlement and was sentenced to serve probation time, reportedly held a secretarial position at the time of the alleged theft.

Church members first brought concerns of vehicle theft, misappropriation of church funds and theft of church property to the attention of law enforcement in 2008, Clearlake Police Department (CPD) Sgt. Nick Bennett previously stated.

CPD Det. Carl Stein conducted an investigation, which included reviewing numerous cash transactions and loans involving church property in which Bruce allegedly converted the funds for his personal use, according to Bennett.

Bruce's sentencing hearing was rescheduled to Feb. 18. He awaits his hearing out of custody and resides in Stockton.

Woman accused of embezzling more than $100K from Watertown school while benefits coordinator

A Watertown woman is accused of embezzling more than $100,000 from the local school district.

Authorities allege that 42-year-old Denise Trively took the money between June 2012 and October 2013 while she was benefits coordinator for the district. She's been suspended since last November.

Trively could face up to 15 years in prison and a $30,000 fine if convicted of felony grand theft embezzlement. A telephone listing for her could not be found.

Ex-con turned pastor pleads guilty to embezzling $3 million

A convicted felon who masterminded a massive ponzi scheme nearly three decades ago, then became a fraud investigator and pastor after getting out of prison, pleaded guilty Wednesday to defrauding San Diego Community Bible Church and its congregation out of more than $3 million.

Barry Minkow, who is currently in custody after his conviction on unrelated securities fraud charges, admitted his guilt in the embezzlement case in a hearing before Magistrate William Gallo.

Minkow, who pleaded guilty to conspiracy to commit mail fraud, wire fraud and bank fraud, faces up to five years in prison when he is sentenced April 7.

“Barry Minkow pled guilty today to embezzling more than $3 million in money intended as church donations (while employed as a pastor) and concealing it all from the IRS,” said Joel P. Garland, Acting Special Agent in Charge of IRS Criminal Investigations for the Los Angeles Field Office.

“Barry Minkow has admitted not only his fraud, but his omission of over $890,000 in unreported income and over $250,000 in tax,” Garland said.

Minkow, 46, admitted to a litany of improper conduct that continued for more than a decade, including opening unauthorized bank accounts on behalf of the San Diego church, forging signatures on church checks, using funds drawn on legitimate church accounts for his personal benefit, and charging unauthorized personal expenses on church credit cards.

In addition, Minkow confessed to diverting SDCBC member donations for his own benefit and embezzling money intended as church donations.

The former Reseda business whiz was convicted in December 1988 of swindling investors out of more than $26 million through ZZZZ Best Co., a carpet-cleaning enterprise he started when he was 16.

The fast-talking, charismatic young salesman convinced investors — and many in the mainstream media — that ZZZZ Best was making $43 million a year restoring buildings that had been damaged by fire or flood.

Before its collapse in 1987, the company’s stock value soared to $200 million and Minkow was hailed as a business genius. He began sending money to Israel, buying fast cars and living the high life that was soon to come to an end.

In prison, Minkow became a born-again Christian and began evangelizing. He also cooperated in a class-action lawsuit in which ZZZZ Best shareholders recovered about 95 percent of their losses,

He was paroled in late 1994, after serving less than a third of a 25- year sentence in which he was also ordered to pay nearly $26 million in restitution, and went to work at a church in Chatsworth.

In 1997, Minkow became the pastor at SDCBC and founded the Fraud Discovery Institute, a for-profit entity which was billed as being aimed at the detection and prevention of fraudulent business practices.

Through the work of FDI, Minkow garnered national media attention as a fraud detection expert, and his turn-around story was profiled by CBS’ “60 Minutes” in 2006.

Sunday, January 19, 2014

Former K-State Employee Guilty Of Embezzlement

A former employee at Kansas State University's biosecurity research institute has been sentenced to 60 days in federal prison for embezzling research funds.

The U.S. Attorney's office says 51-year-old Linda Miller must also pay $14,000 dollars in restitution under the sentence she received Friday.
She had pled guilty in October.

Miller worked from August 2007 to January 2013 at the institute on the Manhattan campus.

In her plea, Miller admitted altering three checks received by the institute and depositing the money into her personal bank account.

CPS seeks assets of theft suspect who died 2 years ago

The Chicago Board of Education filed a civil lawsuit in hopes of recovering more than $500,000 allegedly stolen by a now-deceased North Side high school employee in an elaborate, decadelong fraudulent billing scheme.

The target of the lawsuit, Roberto Tirado, a former technology coordinator at Lake View High School, initially fled to California upon learning of the accusations against him, authorities said. He was subsequently found dead in January 2012 in a hotel room in Mexico, and there were no signs of foul play.

On Monday, the Board of Education, which operates Chicago Public Schools, sued in an effort to recover the money.

Because the body was found two years ago, Monday was the last day the board could have initiated the process to retrieve the money they believe Tirado took. A claim against a deceased person must come within two years of his or her death, according to probate law.

Tirado's death has made the process required to retrieve fraudulently obtained funds more complicated.

"It's often difficult to collect on a judgment when somebody is alive, so yes, the fact that he is dead, the fact that he had relations in another country, are all complicating factors," according to Marc Lane, a Chicago probate lawyer.

In the lawsuit, a lawyer employed by the board, James Vega, is named as the representative of Tirado's estate. Lane said the board employee has a right to represent Tirado's estate because nobody in his family stepped up to claim his assets in the two years since Tirado's death.

"You get all the way down the line, and the very last choice is a creditor of the estate," Lane said.

But the move angered Tirado's attorney, Kevin O'Rourke, who said the family should have been notified before an estate claim was opened.

"I believe the estate filing is improper," O'Rourke said. "Every time I do an estate, we send notice to everyone. We give them seven days' notice."

In the lawsuit, CPS is asking for the $534,224 that it alleges he stole, as well as 9 percent interest, plus an additional penalty that legally can't exceed three times the amount that he took. CPS also requested to be reimbursed for attorney fees and court costs.

"This gives them a shot at claiming $2 million plus rather than $500,000," Lane said.

If the board proves its case, it will have a right to initiate a search into any bank accounts and any other assets Tirado may have had. The board does not know if Tirado's estate has any money to recover. But if he used the money to buy a house or car, the board could try to claim those assets, Lane said.

Tirado's family, including his widow and his father, has declined requests for comment. However, Tirado's lawyer, O'Rourke, said the family was upset when a report was released by the CPS inspector general this month with accusations against the man.

Citing the inspector general's report, the board alleges that in his role as technology coordinator at Lake View between 2001 and 2011, Tirado lined up nine former classmates and students to pose as CPS vendors. Tirado made false purchase orders for $419,747 to the vendors from the district, as well as $114,477 in improper reimbursements on his personal American Express account, the lawsuit alleges.

Tirado resigned during the investigation, withdrew $70,000 from a personal account and told his wife he was going to California to visit one of the vendors, according to Inspector General Jim Sullivan.

Donna Kurzynski, a special education teacher at Lake View said Tirado was well-liked and that staff and students were surprised when rumors of the embezzlement started. O'Rourke has previously said Tirado was "a very nice kid" and has said his client denied any wrongdoing.

A official said CPS does not comment on pending litigation, and Sullivan, who recommended that CPS try to retrieve the funds, said that he is not engaged in the legal process.

The matter is expected in court Feb. 27.

Former Brighton charter school leader gets 10 years probation

A former school leader was sentenced to 10 years of probation for stealing federal grant money last week.

Robert Hughes, 60, pleaded guilty to embezzlement of public property in September after prosecutors said he stole almost $20,000 from a federal education grant intended for Eagle Ridge Academy.

Hughes was also sentenced to 60 days of home detention.

The grant had been awarded to the Brighton charter school to purchase about 350 Netbook computers for students, software and other program materials, according to the arrest affidavit.

The school district's annual audit found irregularities, and as school officials investigated more, they found that even though receipts and invoices showed purchases of 500 computers totaling $135,000, only 153 computers worth $79,210 were located.

Hughes had set up a fake company and bank account with the initials of Eagle Ridge Academy Foundation to disguise diverted checks.

Hughes was initially also charged with one count of felony theft.

After the Brighton school district and the state launched their own investigations, Hughes resigned from his post in August 2012 citing health problems.

The district agreed to pay back the grants that were misused, requiring the charter school to reimburse the district eventually.

Prosecutors in Adams County have also filed a motion to request $166,975.75 in restitution for the school district and will also request $87,024.25 in restitution for Traveler's Insurance.

Saturday, January 18, 2014

Former city clerk charged with embezzlement

A former city clerk for the city of Havana, Kan., was charged Monday with embezzling funds from the city and her church, U.S. Attorney Barry Grissom said.
Diana L. Cox, 67, was charged with one count of bank fraud and one count of wire fraud. A criminal information filed in U.S. District Court in Wichita alleges Cox stole approximately $14,658 from the city of Havana in August, 2011 while she was city clerk. The thefts took place after she falsely reported to Arvest Bank in Caney that the city had changed its policy to require only one signature on checks written for city business. The charges also allege she devised a scheme to steal more than $44,568 from Cross Point Baptist Church in Caney. She transferred money from church’s accounts to make her daughter’s mortgage payment.
If convicted, she faces a maximum penalty of 30 years in federal prison and a fine up to $1 million on the bank fraud charge, and a maximum penalty of 20 years and a fine up to $250,000 on the wire fraud count.

Accusation of embezzlement

A total of at least $185,000 was embezzled by a UVM employee over a six-year period ending in late 2012, according to the Burlington Free Press.
Jody Farnham, an employee of the College of Agriculture and Life Sciences, recently pleaded guilty to a federal charge of embezzlement the Burlington Free Press said.
As an employee, Farnham provided administrative support to theVermont Institute for Artisan Cheese, according to the Burlington Free Press.
The Vermont Institute for Artisan Cheese provides educational, research and consulting assistance to cheesemakers
It also offers courses and workshops in artisan cheesemaking, theBurlington Free Press said according to the charging document.
The institute aims to help make the cheesemaking industry more self sustaining, and make it more robust, according to TomVogelmann, dean of the College of Agriculture and Life Sciences. 
According to the Burlington Free PressFarnham altered the tuition checks of enrollees in the cheesemaking program at the University and made herself a co-payee. 
She then deposited the checks into her personal bank account.  
In addition, Farnham is accused of embezzling cash tuition payments from enrollees and using UVM credit cards for her own personal purchases, according to Burlington Free Press.
An anonymous letter was received July 17, 2012, “alleging redirection” of registration funds for the institute’s workshops, according to a statement from Vogelmann in a Burlington Free Press article.
After the anonymous letter was received, “we started an investigation of the finances,” Vogelmann said. 
According to VogelmannUVM auditors received that record, and eventually called upon UVM police to assist with the investigation.
The FBI also assigned an agent to work on the case July 19, 2013.
Farnham resigned Jan. 28, 2013, effective Feb. 15, 2013, Enrique Corredera, a University spokesman, said.
The institute’s losses rose to $243,343, according to Corredera
Vogelmann attributed recent losses to a drop in the demand for workshops, and he pointed out the institute ran up a shortfall of about $50,000 after the alleged embezzlement had ended.
When asked why the embezzlement wasn’t detected sooner, Corredera said. “Part of UVM’s mission is to foster economic development. Such activity often requires subsidizing programs that lose money but will lead to economic growth. That was the case with VIAC.
Corredera added that the Vermont Institute of Agriculture’s inconsistent profit and lack of a constant flow of revenue made it difficult to notice the embezzlement.
“It’s surprising to me that someone would do this,” Alison Staffin, a first-year CALS student said.
Contrary to Farnham’s actions, University employees are typically thought of as people who are looking to help students, Staffin added. 
There needs to be a higher rigor of security regarding how finances are handled, according to Vogelmann
A new layer of extra control will be implemented. In addition, extra time and money will be spent on the security of the finances, according to Vogelmann
The Vermont Institute for Artisan Cheese has now shifted its focus to science and research, mainly regarding issues in food safety, according to Vogelmann.
This research is a  “critical need for the cheese industry,” said Vogelmann, due to the fact that there is a shift in clientele, as most Vermont cheese artisans are already sufficiently trained, and most of the artisans at the workshops were from out of state. 
“It’s very unfortunate that we had this incident occur, but it’s really a small part of the overall activity,” said Vogelmann

Still more questions in case of deceased CPS worker who stole school funds

A day after Chicago Public Schools filed a $1.6 million lawsuit against him for allegedly embezzling funds, Roberto Tirado’s mysterious case continues to offer more questions than answers, including: could he really have acted alone?

Two years ago this week Tirado was found dead in a hotel room in Tijuana, Mexico, according to the U.S. State Department.

Back in Chicago, the Lake View High School graduate had been a well-respected wrestling and swim coach at his alma mater where he also served as the school’s technology coordinator.

It was in that role that Tirado allegedly misappropriated nearly half a million dollars from school funds, over 10 years, through nine fake vendors, according to a CPS Inspector General’s report released this month.

“The vendors were actually individuals [he] knew when he went to high school or they went to high school when he worked there,” Inspector General Jim Sullivan told WBEZ. “So he created those vendors for CPS. And, over the course of a number years, he issued purchase orders and caused them to be paid in excess of $400,000.”

The report recommended that CPS try to recover some of the lost funds, and yesterday, CPS filed its lawsuit against Tirado’s estate to do just that.

Still many, like former Lake View special education teacher M.L. Rembert, wonder how a single employee could divert so much money through bogus vendors without setting off alarms.

“I’m still in a state of shock,” Rembert said. “I can’t believe that administrators that worked with this individual could, without checks and balances, not be aware of this. I find it so appalling. This was not the individual that I knew.”

Tirado’s alleged misappropriations were discovered during a routine audit of the school triggered by the arrival of a new principal Lilith Werner in the summer of 2011.

When the auditor discovered unusual reimbursements to Tirado, she brought in the CPS Inspector General’s office, which Sullivan, says, found “more serious issues.”

These included funneling the money through bogus purchase orders to vendor P.O. boxes that Tirado had established in Evanston, according to the IG’s report. In addition, more than $114 thousand of reimbursements from the school went to Tirado’s personal American Express card.

The report said that Tirado did not cooperate with the Inspector General’s investigation on the advice of legal counsel. But Tirado’s lawyer, Kevin O Rourke, did tell the IG’s office that: “Mr. Tirado stated that everything he’d done was at the behest of his school principal.”

Sullivan confirms that O’Rourke shared this information, and that IG representatives interviewed former Principal Scott Feaman.

Feaman isn’t named in the report, but he oversaw the school for all 10 years in question, including when Tirado allegedly reaped more than $114 thousand in credit card reimbursements. District rules prohibit most personal reimbursements of more than $500 a month. And in a statement CPS says principals are “required to monitor school spending.”

So how did Tirado get away with so much money?

According to the report, Tirado may have received help from two Lake View high school clerks who who did not observe the proper checks and balances to prevent fraud. The two were recommended for disciplinary action, and no longer work at Lake View. But the IG said reimbursing monthly amounts over $500 should have required additional scrutiny from a higher authority.

“You can exceed that $500 limit with a little more oversight,” Sullivan said. “So to explain how that happened and this fell through the cracks, I really can’t explain that at this point.”

However, Sullivan says by the end of the investigation, “we didn’t think there was enough evidence to make any [disciplinary] recommendation for Principal Feaman who had already left CPS employment by that time.”

When Feaman retired from Lake View in 2011 he was honored by Chicago’s city council for 36 years of service to CPS. WBEZ made multiple attempts to reach Feaman for comment through phone, email and even a visit to his home. In one call to his household someone picked up the phone and responded, “we have nothing to say” before hanging up.

Lake View’s current principal Lilith Werner also did not respond to requests for comment on the matter. Nor did the two clerks who were implicated in the IG’s report.

While the IG’s part of the investigation is closed, Tirado’s friends and associates say they’re still left with many questions.

They ask why someone with access to so much money would have continued to work multiple jobs. Others question how he died in Tijuana (his lawyer O’Rourke says he still doesn’t know). Some ask why, after dying in January of 2012, Tirado's body was not transferred to Chicago until March.

Sullivan’s office confirms that it never identified the body when it returned.

Tirado’s family did not respond to interview requests but, after the report came out, one aunt sent WBEZ a note saying:

"As you can imagine, the family was taken aback by the report and had a number of questions regarding the content. We feel that it is unfortunate that Robert is the one being targeted as he is no longer with us. On a personal note, I can share that this caused the family a great deal of pain. It was the reopening of the wound of having lost Robert."

O’Rourke says that the family was further shocked by the Monday lawsuit that designates a CPS employee, rather than a family member, as the personal representative of Tirado’s estate.

Josh Conlan was a student at Lake View from 2001 to 2003. He says that Tirado, was a challenging wrestling coach who inspired him to pursue a degree in physical education. Conlan feels the charges don’t fit the man he knew.

“Im picturing Robert Tirado in my head right now and I can’t see anything you are saying,” Conlan said. “Half a million dollars at that time? There’s gotta be other names attached to it. Knowing what I know about him, I can’t specifically say that he is a mastermind of that sort. And it just seems to me like they are trying to find a fall guy. And that’s just wrong.”

Several others echoed Conlan’s comments. But the IG says that $330 thousand dollars did end up in Tirado’s account. What happened to all the money after that is still unclear, but documents that emerge from the CPS lawsuit may shed light on that.

No criminal charges have been filed in the matter and Sullivan said that the FBI lost interest in the case after Tirado was declared dead.

It’s difficult to know what Tirado was thinking in the months between the audit and his disappearance, and he left few clues. But one friend, who asked to remain anonymous, shared a letter in which Tirado said he felt like a failure who “let down so many people.” He closed the letter with a warning: ‘Be careful to whom you talk.”

O’Rourke confirmed that his client was depressed.

“Mr Tirado’s life was [Lake View high school] which is why when asked him to leave and said get off the school grounds now, it was devastating to him.”

The lawyer also contends that, until the end, Tirado maintained he was simply following orders.

“They were using the funds basically off-budget as a way of circumventing the CPS budgeting rules,” O’Rourke said. “And Mr. Tirado told me that this was a common practice at many schools.”

Inspector General Sullivan responds that, although he has seen cases involving suspicious reimbursements to personal credit cards before, fake vendor schemes are “certainly not commonplace at CPS.”

And while the IG acknowledges that he’s investigated bigger cases of misappropriation in CPS, “it’s still a large amount of money that could have been used otherwise for appropriate purchases at the school.”

While the IG’s report offers information about dates and dollar amounts, other details are frustratingly out of reach for friends like Rembert.

“I look at this and say ‘this can’t have happened,’” she said. “There’s more to it than meets the eye. I just wish the investigation had been more thorough. Roberto’s dead now. So, of course, this is the end of it. The man is dead. So I guess because he’s dead we won’t really ever get to the truth.”

FCPS employee resigns amid embezzlement charges

An Alexandria man who resigned from Fairfax County Public Schools on Friday was arrested Monday and charged with taking school computers and selling them.

Fairfax County Police say Craig Soderberg, 60, of Lady Anne Court in Alexandria, was charged Monday with two counts of embezzlement after a three-month investigation revealed that he was allegedly taking used laptop computers from a warehouse where older FCPS equipment was stored, refurbishing them, and then selling them online.

Police said they removed more than 1,200 computers from Soderberg’s home after a search on Jan. 9.

Soderberg had worked for FCPS for nearly 16 years. The school system hired him as a buyer technician in 1998 before promoting him to manager of a Springfield warehouse located at 6800 Industrial Road, according to FCPS spokesman John Torre.

Soderberg was placed on administrative leave on Jan. 9 and resigned Jan. 10, three days prior to his arrest, Torre said. Police said they began an investigation in October after receiving a request from the FCPS Internal Investigations Section concerning the allegation. According to Torre, the internal FCPS investigation began in June.

Soderberg’s arrest comes two months after two other FCPS employees were also charged with embezzlement.

In November, a prominent middle school principal, her son, and her former finance aide were all charged in an another alleged embezzlement scheme that police said could go back three years and potentially bilked the school system out of more than $100,000. That case is scheduled to be heard in Fairfax County District Court in February.

“The timing probably is coincidental,” said FCPS Superintendent Karen Garza. “On the other hand, it is so unfortunate when we’re able to identify situations like these.”

Soderberg is currently scheduled for a preliminary hearing on April 7 in Fairfax County General District Court. No attorney information is yet listed for him in court records

Harambee charter CEO to surrender to federal authorities

West Philadelphia charter school chief executive Masai Skief has agreed to turn himself over to federal authorities this week while he waits sentencing on embezzlement charges.
Skief, 32, CEO of the Harambee Institute of Science Technology Charter School, said in court papers filed Monday that he would not dispute federal prosecutors' allegations he had used a debit card to steal money from Harambee after he pleaded guilty to embezzlement charges in August.
Prosectors asked a federal judge last week to revoke Skief's bail because he had violated his plea agreement, which barred him from having access to Harambee funds.
Skief agreed to be placed in custody, pending his sentencing hearing Jan. 22 on two counts of wire fraud in connection with embezzling $88,000 from the charter and the related nonprofit, Harambee Institute.
Skief asked U.S. District Judge Paul S. Diamond to give him until noon on Thursday to surrender.
The judge has not ruled

Chesterfield church embezzlement suspect expected to take plea in Virginia

A Chesterfield woman accused of embezzling more than $500,000 from a church where she worked is expected to take a plea deal in court Thursday.
Jerri Hunter, 39, is expected to plead guilty to five counts of felony embezzlement. A church spokesperson said the theft took place while Hunter worked at the Chester United Methodist Church over six years.
Chesterfield prosecutes said that if Hunter accepts the plea, she will be sentenced sometime in spring or summer.

Former Church bookkeeper accused of embezzlement in Wisconsin

Accused of embezzling more than $70,000 from the St. John the Baptist Catholic Church in Webster and the Sacred Heart Catholic Church in A&H, Michelle M. Blake, 34, Webster, is free on a $10,000 signature bond following her bail hearing last Thursday.
The tale began when Father Michael Tupa, parish priest, and Lawrence French, the church's internal auditor, found some inconsistencies in the QuickBooks accounting program, the program Blake used when she worked as secretary/bookkeeper for the churches from Oct. 2010 to Sept. 2013.
Tupa and French took their concerns to the Webster Police Department. From further investigation, it appeared the defendant was falsifying the church's computerized financial records to cover up her thefts.
According to the probable cause statement attached to the warrant for Blake's arrest, during the time of her employment she had written 47 checks to herself from the St. John the Baptist's checking account totaling $42,959.61 and 30 checks from the Sacred Heart's checking account totaling $34,904.22.
To cover the fact she was allegedly writing checks to herself, Blake falsified records when she entered the activity into Quickbooks, listing a different vendor name under the same check number as she had written to herself.
Further investigation showed the checks in question were written and cashed by the defendant at various banks in the area.
A search warrant executed at the defendant's residence located an envelope which contained several un-cashed checks from  parishioners written to Webster Area Catholic Churches.
Blake, according to the probable cause statement, had acquired a stamp with Father Tupa's signature. Tupa told police he never authorized such a stamp.
The two counts of theft from a business setting in excess of $10,000 are Class G felonies and each carries a maximum penalty of up to 10 years in prison, up to a $25,000 fine or both.
An initial appearance for Blake has been set for 2 p.m. on Wednesday, January 22 in Burnett County Circuit Court.

Thursday, January 16, 2014

Burlington, Wisconsin schools investigate lunch money irregularity

The Burlington Area School District is investigating an “irregularity” in the bank deposits of students’ lunch money.

The deposits in question happened in December and were made by an employee of Aramark, the district’s food service provider, according to a letter about the matter sent home to parents Friday.

“In late December our system of financial checks and balances identified a bank deposit irregularity regarding a food service fund deposit made by an Aramark employee,” the letter said, explaining an internal investigation followed and revealed “other December deposits were compromised. ...

“The deposits in question,” the letter continued, “are student lunch purchases and do not involve any property tax or state aid funds. The status of checks written to the Burlington Area School District for food service (as well as) cash deposits to individual student accounts (is) being reviewed and we will be letting you know the status of your checks and deposits as soon as possible.”

The cash and checks could have been for a single meal or for a student to have some money put on their food service account; credit card payments were not impacted, Superintendent Peter Smet said.

He would not say more about exactly what happened or how much money was involved, since an investigation is ongoing.

That investigation involves “a complete audit of the food service fund” and is being conducted by the school district, Aramark and the City of Burlington Police Department, the letter said. Aramark and police officials did not respond to Journal Times inquiries.

However, the letter said the Aramark employee involved is no longer assigned to the Burlington Area School District and that the company is being helpful.

“Aramark has assured the Burlington Area School District that the school district and student food service accounts will be made whole for any possible loss due to this matter,” the letter said. “... Aramark has served the Burlington Area School District since 1999 without any previous incidents and is cooperating fully in the matter.”

Sunday, January 12, 2014

Ex-Chicago school employee accused of embezzlement

 A watchdog is accusing a former Chicago public high school employee of embezzling nearly $420,000 in a fraudulent billing scheme involving fictitious vendors.

The allegation is part of an annual report by the school district's inspector general, James Sullivan.

The report doesn't identify the former employee or the high school where he worked as a technology coordinator.

Chicago Public Schools said in a statement it "takes seriously any abuse of school resources and has created rigorous safeguards in its procurement process."

The inspector general's report says that during its investigation the technology coordinator resigned, withdrew $70,000 from a personal bank account, traveled to California and was found dead in Tijuana, Mexico.

The employee allegedly issued fraudulent payments to nine purported vendors, directing most of the money to his own account.

A technology coordinator at a North Side high school embezzled nearly $420,000 from Chicago Public Schools in an elaborate, decadelong fraudulent billing scheme, according to an investigation highlighted in the district inspector general's annual report.

The suspect, Roberto Tirado of Lake View High School, resigned as the investigation was underway and in January 2012 was found dead in a hotel in Tijuana, Mexico, according to Inspector General Jim Sullivan, whose report was released Friday.

The investigation found that from 2001 to 2011, Tirado lined up nine former classmates and students to pose as CPS vendors. He then had checks issued to them from the district delivered to a post office box he opened in Evanston, according to Sullivan's report.

Tirado allegedly forged the names of the vendors on the checks, countersigning his own name under theirs before depositing the money into his own account, the report said. An audit performed when a new principal took over at Lake View showed more than $144,000 in suspect reimbursements to Tirado's personal credit card. That triggered the investigation.

Tirado, then 36, resigned during the investigation, withdrew $70,000 from his personal account and told his wife he was going to California to visit one of the vendors, according to Sullivan. When he died in Mexico, there were no signs of foul play, Sullivan said.

"It's all very mysterious," Sullivan said of the events in Tirado's final months.

Sullivan's report suggests that his office is able to uncover only a fraction of the fraud and waste afflicting the school district. He said the watchdog office remains "critically under-staffed and under-funded."

As a result, he wrote, slightly more than 1 in 5 of the 1,460 complaints the office received led to an investigation. That, he wrote, "creates a substantial risk that waste, fraud, financial mismanagement and employee misconduct go undetected."

The misconduct the inspector did uncover spanned a wide spectrum.

In one case, a principal and school programmer at Hirsch Metropolitan High School allegedly boosted enrollment figures with "ghost students" at the start of the school year in 2011 to reach a threshold that could qualify the school for an additional assistant principal.

The school officials allegedly did the same thing later that year to secure nonteaching positions. The scheme, allegedly directed by the principal, worked by using the names of students who initially were projected to come to the school but failed to attend. The pair allegedly falsified grades for the phony students.

The principal retired and was deemed ineligible to be rehired. The programmer faces disciplinary action, according to Sullivan's report.

In another case, the report describes how lax standards allowed a contractor to provide "inferior" computer tables rather than the tables the district ordered. Those tables had to be replaced, costing the district $90,000. The contractor, Frank Cooney Co., agreed not to do work for CPS for 18 months and to pay a $225,000 fine, according to the report. Three CPS employees who left their jobs before or during the inquiry were deemed ineligible to work at CPS.

Also in the report, the former principal of Ogden International School was accused of falsifying three hotel invoices as news reports surfaced about excessive travel and lavish entertaining at the school. The principal, Kenneth Staral, also had an associate's airfare paid through school funds. Staral and his assistant principal were relieved of their duties over the summer, and Staral subsequently resigned.

In another investigation at Ogden, the inspector general found that an assistant principal submitted two sets of reimbursement requests for about $10,000 in spending — pocketing money that, according to the report, he had no right to receive as well as more than 650,000 credit card reward points.

Over three years, the inspector general wrote, the assistant principal repeatedly "gamed the purchasing system." He eventually resigned and has been deemed ineligible to be rehired, while the district is still negotiating to recoup some of the money.

At Harvard Elementary, a failing school taken over six years ago by the privately run Academy for Urban School Leadership, a principal falsified grades to allow students to graduate, according to Sullivan.

Other investigations found that high-level central office administrators reported their income falsely so their children could receive free or reduced meals; employees hired relatives despite nepotism policies; and substantial money was wasted on overtime pay.

The office worked with federal investigators in the case against Tirado, but the report said no criminal charges have been filed. Sullivan recommended that CPS initiate legal action to recover the fraudulent payments — most of which ranged from about $5,800 to nearly $57,000.

Tirado's attorney, Kevin O'Rourke, said his client denied any wrongdoing.

"Mr. Tirado asserted his innocence," O'Rourke said. "He really was a good kid. His life was wrapped up in that school. It was devastating for him to have to remove himself."

Sullivan said Tirado chose not to cooperate with investigators on the advice of his lawyer.

Tirado's widow declined comment.

Donna Kurzynski, a special education teacher at Lake View, said Tirado was well-liked. She said staff and students were surprised when rumors of the embezzlement started. At the time Tirado left Lake View, in late September 2011, many people assumed it was because of illness, she said.

Leominster man pleads not guilty in Ashburnham Westminster hockey association embezzlement in Massachusetts

A Leominster man indicted last month on charges of embezzling nearly $30,000 from the Ashburnham Westminster Youth Hockey Association pleaded not guilty at his arraignment Thursday morning in Worcester Superior Court.

A Worcester County grand jury handed up indictments Dec. 10 charging Roger Lee, 50, of 232 Mechanic St., Apt. 2, Leominster with two counts of larceny of more than $250 by a common scheme. Mr. Lee is alleged to have stolen about $29,000 from the youth hockey program in 2010 while serving as its treasurer and bookkeeper.

Accompanied by his lawyer, Sean Smith, Mr. Lee entered not-guilty pleas and was released on $10,000 cash bail that was posted when the charges against him were still pending in Gardner District Court. The case was moved to Worcester Superior Court as a result of the indictments.

Judge James R. Lemire continued the case to Feb. 24 at the request of Mr. Smith and Assistant District Attorney John A. O'Leary

Club’s president faces embezzlement charge in La Crosse, Wisconsin

The former president of the Retreat Sportsman’s Club faces a felony theft charge after admitting to Vernon County Sheriff’s Department investigators that he embezzled more than $4,000.
Bryce K. Nelson, 50, of De Soto was bound over Dec. 30 for trial in Vernon County Circuit Court on a Class I felony charge of theft in a business setting.
According to a criminal complaint filed Dec. 16, a sheriff’s department investigation was conducted with the cooperation of the trustees of the Retreat Sportsman’s Club starting in late September 2013. Trustees told Sheriff John Spears and Investigator Matthew Sutton they believed Nelson, who had been president of the club since 2003, had been using a club debit card to make personal purchases.
Club trustees said deposits had not been made from profits earned at the club’s trap shooting events. Food and beer are served at these events, which usually led to $1,000 deposits in the club’s accounts. No deposits were made from May to August 2013.
Nelson told Sutton in October that beginning in late 2011 he used the club’s debit card to make personal purchases and that he took money from the club that was raised at its trap shooting events, according to the criminal complaint.
Nelson, in a statement to Sutton, said the number he had come up with “in his head” to make restitution was $7,000.
Sutton used a spreadsheet he had been given by the club, added Nelson’s admissions about taking cash and figured the total amount taken was  $4,336.56.
Nelson made his initial appearance Dec. 30, waived a preliminary hearing in the case and was bound over for trial. Nelson will be able to enter a plea at his arraignment at 10:30 a.m. Jan. 27.

Principal charged with embezzlement, stealing students’ lunch money in Vermont

Former Readsboro Central School principal Michael Heller turned himself into state police Monday, following an investigation into misused funds from two grants the school received in 2013.

Heller, 40, of Fairfax, faces charges of embezzlement, fraud, and petit larceny after police investigated the misuse of more than $4,000 in grants, which police say Heller used for personal expenses such as hotels, food, and shopping. After interviewing the principal’s secretary, police say they also found evidence that Heller had allegedly pocketed around $200 in student lunch money.

The investigation began after Windham Southwest Supervisory Union superintendent Richard McClements contacted state police to report suspected fraud and embezzlement following a financial audit. McClements said that the WSSU had asked Heller for invoices related to expenses from two grants that totaled approximately $4,000. All school district business offices are required to review expenditures from grants, however, according to McClements, the district was not being provided statements, only excuses for their absence.

Following a set deadline, the district accessed the bank statements from the grant account and saw the financial transactions on the account were clearly not for their intended purposes. According to police, after Heller was questioned by the Readsboro School Board, he provided a manufactured list of transactions in an attempt to cover up illegal activity, one that was obviously not a bank original, according to McClements. This in turn has resulted in charges of forgery.

Heller, who had been RCS principal for 16 months, resigned at a school board meeting on Monday, December 16. According to a letter sent to educators and staff at the school on Tuesday, December 17, Heller resigned to focus on health and family, and it was with a “heavy heart” that he was leaving. When Heller was hired he described Readsboro as a school in a rebuilding stage, one that needed to focus on both community and accountability.

According to State Trooper Lauren Ronan, the two grants Heller is accused of siphoning money from include a $5,000 Lowe’s Toolbox for Education Grant for school improvement projects, and a $1,000 theater grant from Macy’s, intended to help fund the school’s production of “Yes, Virginia.” While Trooper Ronan would not specify how many individual transactions were made and in what amounts, she said that in Vermont, each count of embezzlement of over $100 is a felony. Ronan did say that the number of transactions related to the embezzlement charges was in double digits.

While McClements would not speak about Heller’s resignation, as it is a personnel issue, he did say that having a principal, or any employee, charged with a serious offense is a major disappointment. “One of the things that made America the great nation it is is the public school system,” said McClements. “It gives all children the opportunity to rise above whatever state their families may have come from, and become whatever they choose to be through hard work. So we have a sacred trust to run our organization for the benefit and good of the children, and what’s disappointing is when some individual crosses that line. It’s a betrayal of our responsibility to children.”

Heller was processed and released and cited to appear in Bennington Superior Court on January 27. Heller could not be reached for comment. Readsboro School Board members also refused to comment.

Woman pleads guilty of taking church money in Oklahoma

A woman accused of embezzling thousands of dollars from the Stillwater First United Methodist Church has pleaded guilty to the theft of more than $141,000 from the church.

Dana Sue Eckhart pleaded guilty to embezzlement in excess of $25,000 on Jan. 3 at the Payne County Courthouse.

The 43-year-old former church financial manager was arrested in May. Starting in 2009, Eckhart embezzled more than $141,000 from the church by writing unauthorized checks and using the church’s credit card.

An audit of the church’s finances found that Eckhart wrote 33 checks to her or her husband, 17 checks to other people and 46 checks to a bank that the church didn’t have an account with.

Eckhart made more than $60,000 of checks payable to herself and $9,000 to her husband. Bank checks totaled more than $67,000.

In her plea Eckhart states, “I used money that belonged to the church which I had access to in an unauthorized manner,” according to the court documents.

Associate District Judge Stephen Kistler ordered a pre-sentence investigation until Eckhart is sentenced at 1:30 p.m. April 4. She is free on a personal bond until the sentencing. -

BISD problems rooted in unprofessional system in Texas

Two Beaumont Independent School District employees could face up to 10 years in prison after being indicted on federal charges of embezzlement Wednesday.

Finance Director Devin Wayne McCraney, 35, and former Comptroller Sharika Baksh Allison, 43, were named in a 19-count indictment charging them with conspiracy and 18 counts of fraud for allegedly devising schemes in which they embezzled more than $4 million using 18 separate wire transfers to bank accounts under their personal control, according to a press release from the office of John M. Bales, United States Attorney for the Eastern District of Texas.

“McCranie and Allison are crooks and should be held accountable,” Bales said at a press conference at the U.S. Attorney’s office, 350 Magnolia Street, on Wednesday.

After receiving several tips, Bales said, FBI agents arrived at the BISD administration building Nov. 7 to investigate allegations that someone set up bogus accounts and diverted district funds. Agents also visited the homes of McCraney and Allison.

According to a 13-page indictment released by the U.S. Attorney’s office, beginning in 2010, McCraney — one of three BISD employees with the authority to make a wire transfer without the authorization of a second person — began wiring money from the district’s Bank of America account to three bank accounts under his control.

In an attempt to make the transfers appear legitimate, McCraney included notations on the transfer instructions such as “Workers Comp Special Funding” and “Tax Adjustment.”

McCraney was responsible for 13 fraudulent transfers totaling $2.7 million.

On April 27, 2012, the indictment stated, Allison registered under an assumed business name of “Milimann Consultants” — similar to Milliman USA, a company that provides BISD with yearly actuarial analysis of its self-insured workers compensation program. Between April 27, 2012, and Aug. 23, 2013, either McCraney or Allison made five wire transfers from BISD’s Bank of America account to a Capital One account owned by “Sharika Allison d/b/a (doing business as) Milimann Consultants.”

The indictment also stated that McCranie and Allison must forfeit “any property constituting or derived from proceeds obtained directly or indirectly as a result of the said violations.”

No trial date has been set for McCranie and Allison, but Bales said they will appear in court next week to ensure they understand the charges against them. After that, the next step is an arraignment, where they will formally enter a plea and the jury will set a deadline for motions to be filed.

Bales said a trial must occur within 70 days of the initial court appearance. But, he said, he doesn’t think the trial will take much time to reach a verdict — and that the verdict will include a prison sentence.

“They were caught red handed,” he said. “The jury should resolve charges pretty quickly — and with the amount of money stolen and the abuse of trust committed, they’re going to prison.”

Bales said there was no evidence of any other employees involved in a case he called “breathtaking in scale and very disturbing in boldness.” He added that he hoped the district filed a claim to regain its funds.

“BISD is the victim,” he said.

A statement released by BISD communications specialist Nakisha Myles said that the district has been made aware of the indictments, and has and will continue to fully operate with all agencies involved.

“Our primary achievement is and always has been the educational achievement of our children,” the statement said. - See more at:

The shocking charges of multi-million-dollar embezzlement at the Beaumont ISD go way beyond the actions of two employees. It is clear this happened - or dragged on for years - because of a sloppy, unprofessional mindset that permeates the district's leadership.

The district has had one auditor for 11 years, when the clear accounting guideline is to change auditors every three years. With a new set of eyes looking at the BISD's books, the alleged fraud might have been detected sooner.

The amount of money allegedly embezzled is hard to determine because BISD has not reconciled its bank accounts since November 2012. Again, that should be done quarterly at the least, and preferably monthly.

It's mind-boggling to think that blunders like this could occur in a major public school district. Yet it's more understandable in a district that often treats tax dollars like Monopoly money, as evidenced by trustee's refusal to claw back $2 million from the Calvin Walker settlement. Or in a district that hires someone like Naomi Lawrence-Lee as assistant director of finance and purchasing after she resigned under pressure as the Jefferson County purchasing agent for misuse of public funds. Or in a district that often doesn't require basic professional qualifications, as in the case of a chief financial officer who isn't a certified public accountant.

In a district like that, embezzlement was a crime waiting to happen. Potential law-breakers could think their offense won't be detected - or worst of all, that some officials simply might not care.

This district desperately needs a forensic audit - and leaders who care deeply about doing the right thing the right way all the time.

Feds: Guilty of embezzlement, Harambee charter-school CEO resumes embezzling

The U.S. Attorney's Office has asked a federal judge to revoke West Philadelphia charter school chief executive Masai Skief's bail on grounds that he is continuing to steal money from the charter - even as he awaits sentencing for embezzlement.

In August, Skief, 32, the son of the late founder of the Harambee Institute of Science Technology Charter School, pleaded guilty to two counts of wire fraud in connection with embezzling $88,000 from the charter and the related nonprofit, Harambee Institute. He used the money on personal expenses, including a down payment on a house.

Since then, however, Skief has used Harambee's debit card 40 times, racking up charges of $11,000 in cash and purchases, according to documents filed in U.S. District Court on Thursday.

"Following the entry of his guilty plea, the defendant walked out of the courthouse and resumed the fraud that resulted in the criminal charges to which he pleaded guilty," the government said in its filing.

Federal investigators said Skief used the card five times within nine days of his guilty plea.

Prosecutors have asked U.S. District Judge Paul S. Diamond to revoke Skief's $50,000 bail and detain him. He is scheduled to be sentenced Jan. 22.

Neither Skief nor his attorney, Scott A. Coffina, could be reached for comment.

First Assistant U.S. Attorney Louis D. Lappen said Skief's actions were unusual.

"Most people who sign a plea agreement do not go out of the courtroom and then return to the criminal activity they had pled guilty to," Lappen said Friday.

In the filing, prosecutors said that Skief had continued to be involved with Harambee's finances in violation of the terms of his plea agreement. He also failed to report to Pretrial Services on Sept. 9, as he had been directed to do.

When confronted, Skief said he woke up late that day and did not have time to report to Pretrial Services "because he was dealing with 'school business,' " court documents said.

Prosecutors said that Skief's actions demonstrate "an arrogance that is difficult to understand."

Skief, who had been a science teacher at the charter school earning $40,000, became CEO at Harambee and the related nonprofit in December 2007 after his father, John, died unexpectedly at age 59.

In the plea agreement, Skief admitted stealing more than $79,000 from Harambee Institute, which owns the charter school's building, and taking $9,000 from a scholarship fund created in the memory of his father. At the time of the plea agreement, sentencing guidelines suggested a prison sentence of at least 21 to 27 months.

Wednesday, January 1, 2014

Embezzlement from college is top crime story

Pointing to what he portrayed as a “mountain of evidence,” Judge Paul M. Bowman sentenced a former Washington College Dining Services employee to 15 years in prison for conducting a theft scheme of more than $100,000. The judge suspended eight years, meaning that Wendy Sue Marker will serve seven years of active incarceration. She also is to make restitution of $10,000, which represents the amount of money the college paid out of pocket to its insurance carrier.
Sentencing on Aug. 16 in the Circuit Court of Kent County lasted for nearly an hour.
Marker, 48, of Worton, entered an Alford plea in June. She did not admit guilt, but acknowledged that the prosecutor had enough evidence for a conviction. She told the judge that it was in her best interest to make the plea.
The Office of the Kent County State’s Attorney dismissed the remaining charges.
During sentencing, Marker continued to maintain her innocence.
Kent County Assistant State’s Attorney Hallie Salmi told the court that Marker had conducted an elaborate scheme that spanned at least half a decade. Salmi portrayed it as a “theft of entitlement.” Co-workers told the prosecutor that Marker presented herself as someone who was overworked and underpaid, that she was owed the money.
Marker was arrested Oct. 11, 2012, two days after a grand jury returned a 21-count indictment. Her arrest came after the college’s accounting department, while conducting routine analysis, uncovered cash discrepancies related to the Dining Services department. According to testimony, “irregularities” were discovered as the college was preparing a budget for the next fiscal year. Specifically, when the dining hall director reviewed the receipts from as many as five venues – including the main dining hall, the Java George coffeehouse on the first floor of Hodson Hall and a quasi-convenience store in one of the dormitories – she determined that the projected revenue was not being met.
The college initiated an internal investigation that produced 16 file boxes of documents.
Once Marker was placed on administrative leave on April 24, 2012, “all shortages ceased,” according to Salmi