Head of Charter School Pleads Guilty to Fraud Charges

PHILADELPHIA—Masai Skief, 32, of Philadelphia, Pennsylvania, pleaded guilty today to an information charging him with two counts of wire fraud, arising from the abuse of his leadership positions at a Philadelphia charter school, announced United States Attorney Zane David Memeger. Skief was the chief executive officer of Harambee Institute of Science and Technology Charter School (“Harambee Charter School”) and the president and chief administrative officer of a related non-profit organization, Harambee Institute Inc. (“Harambee Institute”).

Harambee Charter School, a non-profit corporation, was established to educate children from kindergarten to eighth grade, and it promoted itself as Pennsylvania’s first African-centered charter school. Harambee Institute was a separate non-profit corporation that had been established to provide students with educational services and vocational training. Harambee Institute owned the school building that was used by Harambee Charter School and collected rent from the school. For its students, Harambee Charter School created a scholarship fund intended to benefit those who intended to attend a “historically black institution of higher education in the United States.”

During a guilty plea hearing before the Honorable Paul S. Diamond, Skief admitted that he engaged in a scheme to improperly obtain the funds of both the scholarship fund and Harambee Institute. First, Skief improperly withdrew $9,000 from the scholarship fund in order to purchase a house for himself in Philadelphia. Then, through his control of the bank accounts of Harambee Institute, Skief converted for his own personal use approximately $79,000 from Harambee Institute. He did this primarily through a series of improper cash withdrawals from the bank accounts of Harambee Institute.

Skief also made substantial efforts to conceal his illegal activities, both during and after the fraud. In particular, he attempted to disguise a significant portion of his improper cash withdrawals from the accounts of Harambee Institute as labor costs for Harambee Institute, when there were no such labor costs associated with the improper withdrawals. Skief directed an accountant to create IRS forms to reflect this false information. Skief also directed others to lie for him to federal agents and to a federal grand jury about the use of the funds that the defendant had unlawfully converted.

A sentencing hearing is scheduled for November 14, 2013. Skief faces a maximum possible sentence of 40 years in prison and an expected advisory sentencing guideline range of at least 21 to 27 months’ imprisonment, plus full restitution to the scholarship fund and to the Harambee Institute.

“Masai Skief stole scholarship money, mortgaging children’s futures to help buy himself a house,” said FBI Special Agent in Charge Edward Hanko. “His further theft from the education non-profit taught Philadelphia’s kids a harsh lesson about unmitigated greed.”

“Today’s action shows that Mr. Skief not only abused his position of trust for personal gain but did so at the expense of students. That is unacceptable,” said Special Agent in Charge Steven Anderson, of the U.S. Department of Education Office of Inspector General Mid-Atlantic Office. “OIG will continue to aggressively pursue those who misappropriate education funds for their own purposes. America’s students and taxpayers deserve nothing less.”

The case was investigated by the Federal Bureau of Investigation and the United States Department of Education Office of Inspector General. It is being prosecuted by First Assistant United States Attorney Louis D. Lappen and Assistant United States Attorney Joseph J. Khan.