Fmr. charity played role in Fattah's alleged schemes

WEST PHILADELPHIA -- Investigators say the schemes by Rep. Chaka Fattah began to fall apart when his former charity, the Education Advancement Alliance in West Philadelphia, was audited.

Fattah, and four others, were indicted in an alleged racketeering case on Wednesday.

That indictment says $600,000 dollars from this charity's federal grants were diverted to pay off the balance of Fattah's campaign loan.

The EAA closed its doors and laid off all employees in July, 2012, but according to the indictment they continued to apply for and take in more federal money.

"Fattah then arranged for the Educational Advanced Alliance, a non-profit entity run by defendant Karen Nicholas and founded by Fattah, to repay the remaining $600,000 "using charitable and federal grant funds," said U.S. Attorney Zane Memeger.

Nicholas is a former Fattah congressional staffer and the President and CEO of the Educational Advancement Alliance.

She is accused of wiring money on various occasions from the charity to corporations who then helped repay the loan.

In 2010 alone, the Educational Advancement Alliance took in more than $9 million in grants that were supposed to help provide educational opportunities to underrepresented populations, from sources like Sallie Mae, NASA and National Oceanic and Atmospheric Administration.

"To disguise the source of these funds, Fattah and his co-conspirators arranged for the payments to pass through two other companies including a company run by defendant Robert Brand," said Memeger.

And Fattah wasn't the only one Nicholas was allegedly helping. In one instance, Nichols is accused of applying for a $50,000 grant from NOAA for a Conference on Higher Education at the time the charity was already shutting its doors.

"The conference never took place and Nicholas used the grant funds to pay $20,000 to another member of the criminal enterprise, $10,000 to her attorney and wrote several checks to herself from EAA's operating account," Memeger said.

Nicholas faces a maximum of 90 years in prison, although it is likely her sentence if convicted your be significantly less than that.

She faces charges of wire fraud, money laundering, falsifying records, and racketeering.