Wednesday, May 1, 2013

It Was So Easy...Until Someone Started Watching

by Gary Snyder

All five of the school's board members have been accused of stealing almost $2 million from The Cleveland (OH) Academy of Scholarship, Technology and Leadership Enterprise (CASTLE).

Here's how they did it:

  • With undisclosed ownership and/or financial interest he laundered approximately $858,000 from CASTLE in the following companies: Educational Management Alliance (EMA), Kids 2000, Leadership Training Institute (LTI), Cross Tech EduServe, and 2K2 Technologies. He used these companies to launder approximately $858,000 from CASTLE. He was CEO.
  • CASTLE paid $478,785 in excess of the stated lease terms with no evidence of additional arrangements or board approval for the excess payments to these that he was partial owner. He was board chair.
  • He used shell companies and laundered and stole $367,344 from CASTLE. He was a business associate of the CEO.
  • CASTLE issued 30 checks to his companies totaling $200,000 without evidence that goods or services were provided. He was a board member.
  • He withdrew money from the company that the aforementioned board member stole.
  • He laundered and stole $144,905 from CASTLE through his position as treasurer of CASTLE.
  • He laundered and stole $8,829 from CASTLE. He was the brother of the CEO.
  • He gave a gave a kickback of $5,000 to the CEO on the sale of a bus.
  • They laundered and stole 33 checks from CASTLE totaling $106,625. She was the wife of the CEO.
  • He was the owner of a real estate management company and negotiated the lease for CASTLE.  On five separate occasions, he gave kickbacks to the CEO totaling $6,425.

Nonprofit Imperative gathers its information principally from public documents...some of which are directly quoted. Virtually all cited are in some phase of criminal proceedings; some have not been charged, however. Cites in various media: Featured in print, broadcast, and online media outlets, including: Vermont Public Radio, Miami Herald, National Public Radio, Huffington Post, The Sun News, Atlanta Journal Constitution, Wall Street Journal (Profile, News and Photos), FOX2, ABC Spotlight on the News, WWJ Radio, Ethics World, Aspen Philanthropy Newsletter, Harvard Business Review, Current Affairs, The Chronicle of Philanthropy, St. Petersburg Times, B, USA Today Topics,, Responsive Philanthropy Magazine, New York Times...and many more Nonprofits: On the Brink (2006) Silence: The Impending Threat to the Charitable Sector (2011)
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