New York State Department of Education (DOE) employee Keisha Relf Davis and an accomplice have been indicted for stealing more than $2.5 million from the state through the transfer of funds to NYC-area driving schools that were never in existence.
Davis was a vocational counselor for the DOE's Office of Adult Career and Continuing Education Services' Vocational Rehabilitation program, offering state-funded access to programs likes driver's education to New York residents who have certain disabilities and other functional limitations.
"Taking advantage of a government job to steal millions of dollars from New York taxpayers is a shameful violation of the public's trust," said Attorney General Eric Schneiderman.
Program director for the Americana Commercial Driving School and also the Roadway Driving School, Steven Washington, has been charged along with Davis with 19 felony counts including grand larceny and bribery, and may be sentenced to as many as 25 years in state prison.
The owners of the two driving schools each plead guilty to grand larceny for their roles in the scheme last month.
The indictment states that Washington had charged non-disabled drivers $300-500 and made copies of their social security cards in return for driving lessons. He then gave their information along with the cash, in the form of a bribe, to Davis who created and approved documents stating that the students had received their training through the state program, without the student's knowledge.
The driving schools in turn received almost $5,000 in illegal state aid for each of the 540 students.
According to records, Davis would keep the cash payments, Washington took 12% of the state aid, and the owners pocketed the rest.
Davis' bail is set at $100,000 and Washington was remanded.
In another case of fraud in NYC, nine daycare centers in Brooklyn and Staten Island are under investigation for stealing from taxpayers and hiding unsafe conditions.
Four owners have been arrested so far, one of whom was found to be a convicted felon. The owner of Next to Home, Owen Larman, had been found guilty of conducting a $12 million mortgage fraud scheme in 2007. He served three years in prison.
All daycare staff in the State of New York are subject to a background check through the State Office of Children and Family Services. Staff members must hold specific education certificates. Anyone with a record of child abuse is not allowed in the field.
Larman was listed as a board member for the preschool, and therefore not subject to as strict a check.
"I'm horrified by people who did this to our children," said Department of Investigation Commissioner Mark Peters, charging that the alleged criminal behavior by the operators "jeopardized the health and safety of children served by the programs."
Larman was arrested for collecting $60,000 from the city for running the daycare, but never leased the space or enrolled any children.
Next to Home, which has four locations, was the worst offender, having billed the city for 80 children they claimed were attending the school who did not exist. At one location, investigators discovered rat poison and droppings, rotten milk in the fridge, and a fire alarm hanging off a wall.
A second area preschool was found to have forged documents for one employee, including creating fake fingerprint files for background checks. When the employee was questioned, she fled. Authorities are still searching for her.
The centers are responsible for 400 children. Although none of the locations were part of the city's new prekindergarten program, more inspections will take place at those locations to ensure they stay up to par.