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Education


Four are facing federal charges of bilking Ohio charter school
Accused of splitting some $400,000 in kickbacks
Story by M.L. SCHULTZE AND KABIR BHATIA


 
In The Region:

Four people are facing federal charges accusing them of defrauding a Northeast Ohio charter school of more than $400,000. WKSU’s M.L. Schultze has more on the indictments announced today.

LISTEN: Outline of charges against the four

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The indictment accuses 65-year-old Joel Friedman of Mayfield Heights and three others of fraud and conspiring to launder money. Friedman was chairman of the Greater Heights Academy in Cleveland Heights.  The indictment says he worked through employees and contractors to set up phony invoices and collect kickbacks.

Mike Tobin of the U.S. attorneys office says the scheme began in about 2006.

“They came up with a plan where people who worked for him would send artificially inflated invoices to the school. He would instruct those invoices to be paid, the money would go to the other people and then they’d  essentially split the money up. It was a way to plunder the school’s treasury or their own gain.”

Tobin says some of the bills were for purely ficticious items, others were wildly inflated for security and consulting services.

The academy shut down abruptly in November 2008, and was declared unauditable in in 2010. At one time, it enrolled close to 1,000 children and it collected more than $21 million from the state in just five years.

Also charged in the case is a Maryland consultant, Jeffrey Pope, Friedman’s secretary, Marianne Stefanik, and  another employee, Virgil Holley.

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