Chicago Schools Bilked Out of $870k in Fraud Ring

cps

With the help of colleagues and vendors, a former employee of Chicago Public Schools has allegedly stolen over $870,000 through the fraudulent billing of the district for goods and services.

A half dozen former CPS employees were involved in the operation, which is currently under a criminal investigation by the Cook County state’s attorney office.  CPS would like the vendors and business owners who were involved in the theft to be banned from doing future business with the school.

The majority of the fraud took place at Clark High School.

The billing fraud is just one of many issues currently under investigation by the inspector general.  Names of schools and employees are not listed.  According to Inspector General Nicholas Schuler, the office is currently examining 280 complaints made during the 2014 fiscal year, ranging from fiscal impropriety to reporting false student data and ethics violations.

The office received a total of 1,335 complaints, causing the investigation to begin.  Schuler said that because more complaints cannot be looked into, the district’s ability to analyze its massive employee list and multibillion-dollar budget.

“As previously reported by this office, the inability to investigate more complaints creates a substantial risk that instances of fraud and employee misconduct go undetected,” Schuler wrote in his report.

The fraud conducted at Clark High School held the inspector general’s focus for the majority of the year, causing four investigations to determine that an operations employee “orchestrated multiple fraudulent purchasing and reimbursement schemes that resulted in the theft of $876,427″ between 2009 and 2014.

The employee, referred to as “Employee A” in the report, has since resigned and has received the designation “do not hire” for the district.  Some of the other employees involved have also either resigned or been fired, writes Juan Perez, Jr. for The Chicago Tribune.

According to the report, the employee stole over $33,000 between 2012 and 2013 through the submission of false reimbursements for items supposedly needed by the school.  A co-owner of a CPS vendor supplied the fake invoices at Employee A’s request in order to cover some of the missing paperwork, reports Becky Schlikerman for The Chicago Sun Times.

The employee received over $111,000 in kickbacks from two district vendors between 2009 and 2013.  The money came from over $216,000 worth of purchases at two high schools, which the inspector general said “either all or substantially” all of was found to be fraudulent.

Within the same time period, the employee filed more than $518,000 worth of fake purchase orders with two owners of district vendors.

While the investigations continue, the election for Mayor in the city is nearing.  Ald. Bob Fioretti is running against Mayor Rahm Emanuel in next month’s election.  Fioretti said the citizens are angry over the amount of crime taking place in the city, and that if he were to win he plans on hiring 500 additional police officers.