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Published in Print: July 14, 2004, as Schools Probe in City Yields Theft Charges

Schools Probe in City Yields Theft Charges

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In what was described as a first step toward rooting out corruption in the New Orleans public schools, federal investigators said early this month that nine current and former district employees had agreed to plead guilty to theft charges.

Eight of the individuals allegedly took part in a kickback scheme in which a district clerk gave false travel reimbursements and other payments to employees, with the understanding that he would receive half the amount back. Those charged include teachers, secretaries, and paraprofessionals. Altogether, they stole about $70,000, investigators said in announcing the pleas on July 2.

Another payroll clerk allegedly stole about $250,000 by issuing checks to herself under her maiden name. A 10th individual, who is not a district employee, also is accused of paying kickbacks to a district official to win contracts with the school system.

Those charged are scheduled to appear in court on July 19 to enter their pleas.

The criminal charges stem from a three-month probe, led by the FBI, that also included investigators from the U.S. Department of Education and the Internal Revenue Service, along with local law-enforcement agencies.

Jim Letten, the U.S. attorney for the eastern district of Louisiana, predicted that more school district staff members would be implicated in the coming months. "Individuals who have been stealing should be squirming right now," he said in an interview last week.

Invitation to FBI

The investigation is part of a larger campaign by Superintendent Anthony S. Amato to rid the Orleans Parish district of waste and abuse, which, by many accounts, has cost the 70,000-student system many millions of dollars.

Hoping to stop the hemorrhaging of money, Mr. Amato took the unusual step this spring of inviting the FBI to set up shop in the district’s central office.

"I knew for a fact that I do not have the resources or the skills to uncover a systemic approach to criminal intent," he said last week. "This is not just a single event; these are not people working in isolation. These are well-planned out, large-scale thefts."

Mr. Amato, who was hired in February of 2003, is under the gun to fix long-standing fiscal-management problems that have allowed fraud to go undetected. A state auditor’s report in March blamed a lack of financial controls for the disbursement of paychecks to people who no longer work for the schools.

Vol. 23, Issue 42, Page 7

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