HBCU, SEC, DOE, DOJ And The Child Welfare Fraud Network

Rock on, my good man, rock on.

I have no idea as to why the DOJ will not pick up this particular qui tam.

Oh wait!  Yes, I do know why the DOJ will not pick up this particular qui tam.

See, it goes like this.

"There's a network," Wilbourn-Snapp said. "It's so deep."

This Historically Black College University grant came from the U.S. Department of Education, where, in turn, Wiley College contracted with Rice Capital Access Program, where, in turn, it cranked out some jacked up municipal bonds with the City of Detroit where it had to file for bankruptcy.

The SEC approved the structured municipal bonds for Detroit.

This would mean that the DOJ would have to investigate the SEC, which is something we know they would never do...

So, in essence, higher education gets funding from the U.S. Department of Education to play the privatized investment game, and this is why there is a powerful movement which does not want "free education".

It would take away their play money because I can already see there were lots of individuals got kickbacks or any other form of defalcation one wishes to call it.

This case is deeper than basic mismanagement.

This is just another, highly sophisticated fraud scheme and I have no doubt that there are other officers than just Cristal Baron, Chief Financial Officer for Rice Financial Products who have funded political campaigns through federal programs intended to provide a future for children and laundered lots more money through the Clinton Foundation.

This is just another reason why Detroit went bankrupt.

Ex-Wiley College employee sues, claims financial mismanagement

MARSHALL — A fired Wiley College employee has filed a federal lawsuit against his former employer, claiming he was let go after offering proof to school administration of financial mismanagement by college President Haywood Strickland.

The lawsuit, originally filed in March 2016 at the Marshall federal courthouse, states Roderick Strong is suing on behalf of himself as the United States.

The lawsuit states Strickland and Wiley College violated the False Claims Act in regards to a $24.4 million federal Department of Education loan given to Wiley in 2011 as a member of the Historically Black Colleges and Universities.

 The False Claims Act permits citizens to file a lawsuit on behalf of the U.S. government without the United States' involvement in the litigation.

 Strong states in the lawsuit that he was Wiley College principal financial analyst from 2011 to 2015 and was in charge of securing the college's federal HBCU loan.

 This past week, Strong filed an amendment to the lawsuit, adding Rice Financial Products Co. through its subsidiary, Rice Capital Access Program, and Wesley Peachtree Group as defendants.

 Both financial organizations were originally assigned as overseers and issuers of the federal loan to Wiley College but did not properly vet the college or check for the college's compliance to loan requirements, the lawsuit states.

 Neither financial company returned calls for comment regarding the lawsuit. Strong's attorney, Renee Higginbotham-Brooks, refused to answer why the case was filed a year ago but none of the defendants served. She also refused to comment on why the case has been sitting for a year and why the amendment adding the two financial groups as defendants was recently filed.

 In addition, Higginbotham-Brooks refused to comment on why Strong waited a year after his dismissal from the college to file the lawsuit.

The attorney also said Strong would not comment about his case.

 Strong states in the lawsuit that not only did Strickland mismanage loan monies and use the college's funds as his "personal cash cow," but that he also forced Strong to falsify documents in order for the college to receive approval for the loan and to continue receiving loan funds.

 Strong is suing for three times the amount of the $24.4 million federal loan plus a civil penalty against each defendant for each violation of the act.

Strong is also suing for his attorney's fees, expenses and costs and is requesting to be reinstated at the college with the same seniority status that he would have had before the "unlawful discharge."

 Strong is requesting a jury trial.

 Wiley College officials said they were not aware of the lawsuit and have not been served.

 "Wiley College has not been served with a lawsuit by or on behalf of Mr. Roderick Strong and has not had an opportunity to review his allegations," university spokeswoman Tammy Taylor said in a statement.

"As Wiley College has not had an opportunity to review those allegations, the college is unable to make a detailed statement at this time.

The college does, however, plan to defend itself from baseless claims and allegations and will be referring this matter to counsel."

 Allegations In the lawsuit, Strong states that, "Prior to and continuing after Wiley College's application for the HBCU loan,

Strickland has operated Wiley College as a personal cash cow through a variety of means including:

• setting up and operating an enormous number of accounts, which convolutes the accounting process; 
• being the sole authority to approve expenditures, make payments, and sign all of the college's checks; terminating the auditors who called attention to accounting irregularities; 
• giving inflated valuations of donations for tax purposes, many of which had to be subsequently written off presumably in return for payment; insisting that the Wiley College Business Office not report any additional income outside his salary; 
• reporting no taxes due to the Internal Revenue Service on the monthly cash payments to himself in addition to his salary and numerous transfers he made of Wiley College's money into his brokerage accounts, including presumably federal financial aid and Title III funds; 
• and diverting and spending grand and pledge donations." 

 Strong also states in the lawsuit that throughout his four years at the college, he wrote many memos and spoke out against the defendants' non-compliance with the terms of the HBCU loan and with IRS regulations, employee compensation and fringe benefits.

 "For example, Strong wrote a letter to the director of human resources, advising that payments and wire transfers from Wiley College operating accounts to Strickland were taxable income to him and that income and payroll taxes should have been deducted.

The official responded that Strickland had directed the payments not to be reported to the IRS." 

Strong also states that he expressed these concerns to both financial institutions overseeing the loan. 

The lawsuit also contains four pages' worth of allegations describing how Wiley College broke the loan agreement.

 Strong states Strickland highly inflated the value of the campus' property and highly overstated the college's net revenues, both of which were to serve as the required security for the HBCU loan, using the insured value instead of the appraised value.

 Strong states in the lawsuit that the HBCU loan was to be used to finance construction of a living learning center with a 500-bed student housing facility ($14.5 million), renovation of the Fred T. Long Student Union Cafeteria ($3.3 million), Jackson Hall ($100,000), resurfacing of parking lots ($175,000), a refund of the $3.4 million Wiley College Endowment Fund Loans, refund two outstanding board of trustee notes including the Batten Loan ($159,618 of the original $250,000 amount) and the Scott Loan ($515,206 of the original $750,000 amount) and payment of the loan escrow fund deposits and transaction costs.

 Strong states the college falsely reported its enrollment growth, income and expenses and pro forma projections for the five years following the loan application.

As evidence of this, Strong states from 2011 to 2015, the college had trouble paying its bills on time, had to lay off employees and twice switched down to a four-day work week due to a lack of funds.

 In the lawsuit, Strong also states the college received $750,000 in the HBCU loan to repair the J. Jack Ingram Residence Hall, which was damaged in spring 2015 flooding, "however Strickland spent the money and did not make any repairs."

 The residence hall still sits abandoned in a state of disrepair.

 He also states that loan funds were used for non-loan purchases.

 "One such misuse resulted in liens being placed on the Living Learning Center when the contractor and sub contractors were not paid," he states in the lawsuit.

"Another misuse resulted in Wiley College's endowment account having less than $150,000 balance as of June 2015, since the $3.4 million HBCU loan proceeds for replenishment of the endowment account were transferred to an operating account and spent."

 Strong states in the lawsuit that Strickland purposefully created some 1,800 to 2,500 general ledger accounts and business accounts and gave himself the sole authority to sign all checks, sign off on each and every expenditure, authorize wire transfers or college funds.

 "When (Strickland) was out of town," the lawsuit states. "no college business could get done." 

Strong also states in the lawsuit that the college has failed to make timely payments on its HBCU loan with some getting paid more than 30 days late. Strong's attorney refused to comment on when the case might go to trial.

SEC Audit of Rice Securities 2013 by Beverly Tran on Scribd