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theschoolboards
04-29-2011, 09:02 AM
From the NY Times (http://www.nytimes.com/2011/04/29/nyregion/consultant-to-schools-stole-millions-officials-say.html) by Fernanda Santos:
Aided by lax oversight and by corporations that profited from his scheme, a former technology consultant stole $3.6 million over six years from the Department of Education to finance flashy cars and real estate speculation, federal authorities said on Thursday.

The investigation revealed another embarrassing lack of supervision in one of the city’s technology projects, just four months after federal authorities charged seven people in what they called an $80 million scheme to steal from CityTime, an automated payroll system that ballooned in cost to more than $700 million, nearly 10 times over budget. It also comes as the Education Department plans to invest more than half a billion dollars next year to upgrade Internet access in every school.

As in the CityTime case, the charges revealed on Thursday revealed the enormous responsibilities and power given to technology consultants working on city projects.

The former consultant, Willard Lanham, 58, surrendered to federal authorities on Thursday on charges of mail fraud and theft from a billion-dollar school-wiring and Internet-access project financed partly by the federal government.

Mr. Lanham, who was being paid $200,000 a year by the city, used layers of contractors and subcontractors to hide his scheme, and each of them profited a little from it, according to the federal complaint. He hired several people, including a brother, to work on the city contract, then billed another company for those hires, marking up the invoices. The company, for its part, charged Verizon or I.B.M., the two major vendors, more than what it had paid Mr. Lanham.

According to a report by Richard J. Condon, a special investigator for the city schools, Verizon and I.B.M., in turn, billed the Education Department, also marking up the amounts. Verizon marked up the bills by $800,000, and I.B.M. by $400,000, said Mr. Condon’s report, which he had forwarded to the federal authorities. “I.B.M. and Verizon, by their silence, facilitated this fraud,” the report said.

read more>> (http://www.nytimes.com/2011/04/29/nyregion/consultant-to-schools-stole-millions-officials-say.html)