Philanthropy Update

Heads of Fake Fund Found to Be Guilty of Cheating Schools

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A father and his son were convicted last week of 33 felony counts in U.S. District Court in Minneapolis for defrauding school districts nationwide of more than $600 million.

A jury found J. Tyron Lewis and his son, Cameron J. Lewis, the chairman of the board and the chief executive officer, respectively, of the National School Fitness Foundation, guilty of various counts related to money laundering and wire, mail and bank fraud, court documents show. No sentencing date has been set.

The Lewises promised hundreds of districts that if they bought fitness equipment for students from the American Fork, Utah-based foundation, the NSSF would pay back over a three-year period the $150,000 to $221,940 the districts had spent on the equipment. The Lewises said that the NSSF would do so with money from donations and grants. ("Risk Seen in Deals Offered By Fitness Group," March 17, 2004.)

That didn’t happen, prosecutors said. Districts didn’t get their money because the Lewises were running a “Ponzi” or pyramid scam. The foundation declared bankruptcy in 2004.

“Cameron and Ty Lewis … misled school districts and banks about NSSF’s payments, omitted material facts about NSFF’s financial condition and fundraising success, … and received millions of dollars through kickbacks from NSSF vendors, [and] payments made by NSSF … in the form of ‘loan repayments,’ home renovations, and home-repair projects,” documents say.

Vol. 26, Issue 15, Page 12

Published in Print: December 13, 2006, as Heads of Fake Fund Found to Be Guilty of Cheating Schools
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