Wednesday, October 21, 2015

Federal Probe of Privatization in Michigan Child Welfare Fraud Widens

Michigan has a long history of child welfare fraud and it all began with Maura Corrigan, former Michigan Supreme Court Legislative Lobbyist, former Director of Michigan Department of Human Services and now, national scholar with the American Enterprise Institute, when she spearheaded the nation's scheme for privatization.

To provide a brief background on Michigan's practices of redirecting federal funds for the purposes of inurement through contracts, kickbacks or an opulent shopping spree, allow me to highlight just a few of the major triggers that have forced the fed's hand to probe child welfare in Michigan:










I would mention the Great Detroit City Hall Scandal, but I believe it is already understood as it is ongoing.

Despite all the federally funded child welfare programs, the rate of child poverty continues to climb which is the best indicator one can chose to measure the effectiveness of its administration of privatization.

Campaign 2016 is going to be lots of fun and quite messy, but at least we know our tax dollars are going to a really good cause to pay the dedicated investigators at the FBI to finally do their jobs and stop child welfare fraud in Michigan.

FBI target gave away Maserati amid federal probe


Top officials, bank records focus of school probe


A sweeping federal corruption probe of the Education Achievement Authority began more than 16 months ago and is focused on current and former top officials as well vendor payments, documents show.

Subpoenas and other records released Tuesday by the EAA show the FBI and the U.S. Attorney’s Office sought the personal e-mail addresses of former chancellor John Covington. They also sought banking and e-mail records for former EAA chief of staff Tyrone Winfrey, the husband of Detroit City Clerk Janice Winfrey, and a handful of current and former principals, including Kenyetta (KC) Wilbourn, a former Mumford High School principal who told the Free Press last week that she had cut a deal to plead guilty to bribery and tax evasion as part of an FBI probe of kickbacks.

None of the individuals named in the documents has been charged with a crime.

Covington, who was the chancellor when the EAA opened in 2012, told the Free Press on Tuesday he has not been contacted by the FBI. He abruptly resigned in June 2014 after critics raised questions about lackluster academic achievement as well as the district's finances.

“When I left the EAA, I had an agreement with them that I would not talk about the authority, which was fine with me," he said. "I have no idea what’s going on with the FBI probe. I have not been contacted by the EAA, the FBI or anyone.”

Winfrey, who currently serves as director of parent and community involvement for the EAA, could not be reached for comment.

EAA spokesman Robert Guttersohn said the EAA is cooperating with the probe.

“We commend the EAA staff who found and reported these issues to the authorities,” Guttersohn said. “The EAA has and will continue to work closely with the FBI. When the EAA was informed of the investigation, Chancellor Veronica Conforme immediately implemented greater controls and more stringent surveillance over use of district finances. Any misuse of funds is intolerable."

The subpoenas, issued in May and June 2014, also cover records related to:

  • Former Pershing High School Principal Gregory King
  • Former Denby High School Principal Tracie McKissic
  • Former Mumford High School business manager Georita Bates
  • Former Central High School Principal Steve McGhee, who became the EAA's director of career and technical education
  • Current Bethune Elementary Principal Antoinette Pearson
The EAA is a controversial district created by Gov. Rick Snyder in 2012 to reform Michigan’s lowest-performing schools. It operates 15 schools in Detroit.

Among the companies named in the subpoenas are Futures Education, a company with offices in Dearborn that provided support services for special education. The EAA told investigators that it didn’t have invoices for more than $740,000 from the company, according to the records.

The records also show investigators seeking contracts, invoices and other records related to a wide range of other companies that did business with the EAA. Investigators wanted to see records relating to $114,000 in invoices from a company called Detroit Media Specialists, but district attorney Michelle Crockett wrote to an investigator in July 2014 that "The EAA has no financial records/files related" to the company.

Detroit Media Specialists and another company named in the records, Inner City Sporting Goods, don't appear to be incorporated in Michigan, according to corporation records on the State of Michigan's website.

Crockett also told the investigators that the EAA had no records of contracts with Allstate Sales, World Wide Sales, Educating Hands, Gloria P. Davis, Conari Consulting and Learning Gizmos.
The district also had no record of almost $1 million in invoices from Educating Hands, Top Flight Education, M.A.D.E. Training, Beyond Basics, Ingrid Walton and Alkebu-Lan Village. It's unclear from the records if those invoices were paid.

Records show that FBI officials began exchanging e-mails with Crockett as early as May 2014, seeking records. Over the next few months, Crockett provided information to Brenda Jeanetta of the FBI’s public corruption division and met with her repeatedly at a Starbucks.

The FBI asked EAA officials specifically about contracts and payments made to Esperanza, a now-defunct nonprofit, and to Follett Educational Services, a textbook company.

Records show Covington and Cecilia Zavala, Esperanza's former chief operating officer, signed contracts for Esperanza to provide a conflict resolution program at a handful of EAA schools. An invoice report showed the EAA paid Esperanza $1.6 million in 2012-15.

In June, Wayne County prosecutors charged Zavala and Rudolfo Diaz, the former principal at Western International High School, part of the Detroit Public School District, with embezzling thousands of dollars from Esperanza Detroit. Authorities said the money was supposed to be used to serve at-risk students.

Crockett sent Jeanetta an invoice report showing the EAA paid Follett Educational Services more than $65,000 in 2012-15.

Bates, Mumford's former business manager, lost her job in 2014 after officials in the district discovered she’d signed off on a $500,000 contract with Pearson, an international educational services company, according to an e-mail from Crockett to FBI special agent Douglas Wood. EAA board approval was required on any contracts over $250,000, and only Covington was allowed to sign off on contracts that large, the e-mail said.

“K.C. acknowledged … that Georita was not in the right role as business manager, and offered to transfer her to another position so that this issue would not arise again,” Crockett wrote. Bates was reassigned to another job at the school.

But that transfer left Wilbourn serving as her own business manager, Crockett wrote.




Last October, Crockett told Jeanetta she had talked with Wilbourn about having vendors in her building without the knowledge of central office staff, something she discovered when Wilbourn tried to secure payment for a woman who was assisting with a foreign language program.
“It appears that she (Wilbourn) is contracting with these individuals on her own,” Crockett wrote.
Wilbourn quit the EAA on Nov. 19, 2014, around the time federal officials searched her downtown Detroit apartment.

She told the Free Press last week she was planning to plead guilty to federal charges of accepting a $58,000 bribe and tax evasion.

Wilbourn, once a rising star in Detroit Public Schools, once drove a Maserati and was known for carrying around a baseball bat at school to keep order. She was hailed as a turnaround specialist at Denby High School before she moved to Mumford High. Both were DPS schools that eventually became part of the EAA.

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