Thursday, July 22, 2010

From Alleged Felner Co-conspirator Thomas Schroeder's PreTrial Memo

Federal indictments allege that from 2001 to 2008 former Education Dean Robert Felner and alleged co-consprator Thomas Schroeder used a sham entity called the National Center on Public Education and Prevention (NCPEp) to execute a scheme to defraud.

In May, Felner was sentenced to 63 months in prison for his role in defrauding U of L and the University of Rhode Island of $2.3 million. Felner pleaded guilty to nine federal charges, including income tax evasion. In addition to prison time, Felner must pay restitution of $510,000 to U of L, $1.64 million to the University of Rhode Island and $88,750 to the Rock Island County Council on Addiction in Illinois.

Schroeder is essentially charged with mail fraud.

Count 1 charges that the two men executed their scheme using NCPEp to defraud the National Center on Public Education and Social Policy, a division of the University of Rhode Island (NCPE-URI), the Rock Island County Council on Addiction (RICCA), and the University of Louisville (UofL).

Count 2 charges they conspired to use NCPEp to launder the proceeds of the fraud charged in Count 1.

Count 3 charges that they conspired to defraud the Internal Revenue Service through, among other means, the use of NCPEp.

The government alleges Schroeder and Felner fraudulently used NCPEp to divert funds that were intended as payment for work actually completed. They diverted funds from three school districts, Santa Monica, Buffalo, and Atlanta. The invoiced work was never completed.

In all instances, NCPEp was invoicing the three school districts, RICCA, and UofL for work it did not complete. The only distinction was that Schroeder, on behalf of NCPEp, personally invoiced the three school districts and UofL, whereas Felner, on behalf of NCPEp, personally invoiced RICCA. The money from all three victims was laundered through NCPEp bank accounts controlled by Schroeder and/or Felner. RICCA was not aware of Schroeder’s involvement with NCPEp. Similarly, NCPE-URI and UofL were not aware of Felner’s involvement with NCPEp.

From its inception NCPEp was deliberately created as a subterfuge and from 2001 through 2008 NCPEp did no work. Instead, NCPEp was used exclusively to launder money stolen from URI, RICCA, and UofL. Schroeder’s fingerprints were all over NCPEp from the beginning in 2001 through the execution of a federal search warrant in 2008. NCPEp never filed a tax return.

Check out Page One Kentucky for more.

No comments: