Dallas Charter School Kickback Scheme

Former school CEO gets seven-plus years in prison 

A federal judge sentenced former Dallas charter school CEO Donna Houston-Woods to seven years and three months in prison Thursday for accepting a kickback to steer a school technology contract to a friend, The Dallas Morning News reported.

Assistant U.S. Attorney Russell Fusco chided Houston-Woods, 66, during the sentencing for pocketing a $20,000 bonus from Nova Academy after her October trial and asking for a $300,000 severance, a request the school’s board denied.

“She goes right back to the school like nothing happened,” Fusco said.

Senior Judge Sidney Fitzwater said it was “outrageous” that the school board paid Houston-Woods the bonus before she resigned, indicating the payment showed the mismanagement of the school, the newspaper reported.

A federal jury convicted Houston-Woods of three counts of wire fraud and one count of conspiracy to commit mail and wire fraud. She was found to have received a $50,000 kickback from ADI Engineering owner Donatus Anyanwu to steer a contract to his firm to connect the school to high-speed internet.

But ADI Engineering botched the job and even after it was clear the firm could not complete the contract, Houston-Woods falsified documents so the firm could continue to receive federal money – and allow her to get her kickback, the Morning News reported.

Anyanwu was sentenced to 30 months in prison before Houston-Woods’ hearing. They are jointly responsible for paying back $337,951 in restitution, the newspaper reported.

Fitzwater noted that Nova Academy is now ineligible to receive more federal funds because its administrator defrauded the program.

The newspaper reported that Houston-Woods did not apologize during her brief remarks to the judge, instead speaking about how she had given money to needy students and her staff.

“I have never wanted to take anything from anybody,” she said.

A document presented during Houston-Woods’ trial showed that she wagered nearly $110,000 in an Oklahoma casino after receiving the kickback.

-In October a trial began for Nova Academy chief who allegedly got kickbacks for contract

 

Insiders at the charter school with three campuses were surprised when Houston-Woods approved a $337,951 federal contract for ADI Engineering Inc. after the Dallas engineering firm had botched two earlier construction projects.

Prosecutors say ADI owner Donatus Anyanwu paid Houston-Woods $50,000 under the table to secure the contract. In July, Anyanwu pleaded guilty to mail and wire fraud for his role in the alleged scheme and intends to testify against Houston-Woods, 65, the newspaper reported.

Houston-Woods said the money she received from Anyanwu was a loan repayment. Her lawyer, Russell Wilson, said on Monday as the trial opened that the botched contract was due to Anyanwu’s “string of broken promises” and suspect business practices.

Assistant U.S. Attorney Russell Fusco said that Nova’s staff and a third-party consultant recommended CMC Network Solutions, the school’s longtime information technology contractor, to complete a 2011 project to wire the company’s newest school for high-speed cable. The project was needed to enable the school to qualify for federal funds under a program aimed at bringing internet services to disadvantaged students.

But Fusco said Houston-Woods chose ADI for the contract, circumventing the bidding process and allowing that company to copy parts of CMC’s bid. The difference in the two bids was $50,000, the same as the amount of the kickback, Fusco said.

Although CMC was hired to fix problems after ADI couldn’t complete the work in time, Houston-Woods signed federal certifications falsely claiming ADI finished the project on its own, the prosecutor said.

ADI was facing two lawsuits for negligence while it was doing the work for Nova, court records show, and eventually filed for bankruptcy.

Houston-Woods remained in her post at Nova as of the school’s September board meeting.

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