Four People Indicted for Defrauding Cleveland Heights Charter School of $400,000
|U.S. Attorney’s Office November 21, 2013|
Four people were indicted on charges of wire fraud, mail fraud, and conspiracy to launder money for their roles in a scheme to defraud a Cleveland Heights charter school of more than $400,000, said Steven M. Dettelbach, United States Attorney for the Northern District of Ohio.
Indicted are Joel B. Friedman, 65, of Mayfield Heights; Jeffrey A. Pope, 46, of Bowie, Maryland; Marianne Stefanik, 64, of Parma; and Virgil B. Holley, 51, of Cleveland Heights.
“These defendants are accused of taking money intended for students and using it to enrich themselves,” Dettelbach said.
“Joel Friedman and his co-conspirators violated the trust of taxpayers and the students of Greater Heights Academy,” said Kathy Enstrom Special Agent in Charge, IRS-Criminal Investigation, Cincinnati Field Office. “Running a charter school does not give you a license to steal.”
Friedman served as chairman of Greater Heights Academy, a charter school located in Cleveland Heights. Stefanik worked as Friedman’s secretary at the school. Pope operated a consulting business in Maryland known as R&D International. Holley worked as Friedman’s employee at GHA in various capacities, including starting Holley Enterprises to provide security at GHA.
Around 2006, Friedman approached Pope with a proposition for Pope to make extra money. Friedman and Stefanik provided Pope with legitimate previous orders to use as templates, which he then used to create fraudulent invoices on R&D letterhead. Stefanik then processed the payments, knowing the invoices were false. Friedman then called Pope and instructed him on how much of the money he could keep and how much he should return to Friedman, according to the indictment.
The defendants caused a loss of approximately $287,269 to GHA and its students as a result of the scheme, $14,000 of which was retained by Pope, according to the indictment.
Beginning in 2006, Holley, at Friedman’s suggestion, began submitting false invoices to GHA for work that Holley Enterprises did not perform. Upon receipt of a check from GHA, Friedman would tell Holley whether the payment was for a legitimate invoice or whether the proceeds were to be diverted to Friedman personally or an entity Friedman controlled, according to the indictment.
As a result of this scheme, the defendants caused a loss to GHA and its students of approximately $117,000, according to the indictment.
This case is being prosecuted by Assistant United States Attorney Robert J. Patton. The case was investigated by the Federal Bureau of Investigation and Internal Revenue Service-Criminal Investigations.
If convicted, the defendant’s sentence will be determined by the court after consideration of the Federal Sentencing Guidelines, which depend upon a number of factors unique to each case, including the defendant’s prior criminal record, if any; the defendant’s role in the offense; and the unique characteristics of the violation. In all cases, the sentence will not exceed the statutory maximum, and in most cases it will be less than the maximum.
An indictment is only a charge and is not evidence of guilt. A defendant is entitled to a fair trial in which it will be the government’s burden to prove guilt beyond a reasonable doubt.