Ex-charter school officials allegedly stole $522,000

New Media Technology Charter School (Image from Google Streetview)

April 14, 2011 3:54:59 PM PDT
The former board president and the former CEO of a Philadelphia charter school have been indicted by the U.S. Attorney's office on fraud charges for the alleged improper use of more than half a million dollars.

Charged are Hugh C. Clark, 64, of Philadelphia and Ina M. Walker, 58, also of Philadelphia. Clark is the former president of the board for the New Media Technology Charter School and Walker is the former CEO.

U.S. Attorney Zane Memeger said Clark and Walker "improperly used approximately $522,000 in New Media funds to enrich themselves and advance their personal interests."

According to investigators, the pair used the money to:

-Pay for a small private school they controlled, the Lotus Academy
-To advance their personal business ventures, including the Black Olive health food store and the Black Olive restaurant
-Pay personal expenses.?

Authorities say they funneled $300,000 to Lotus Academy, a private school that housed New Media charter school operations. The 27-count indictment says other money went to the defendants' restaurant, health food store and web design firm. The indictment alleges that the defendants often disguised these payments by adding additional expenses to existing New Media expenses.

In one instance, Memeger alleged that Clark and Walker allowed a contractor to use an office at the New Media Middle School to prepare the opening of the Black Olive health food store.

In another instance, Clark and Walker are accused of spending New Media funds on "joint" expenses with Lotus Academy, such as two annual awards banquets at a Philadelphia hotel, and two overnight staff retreats to Ocean City, Maryland.? New Media allegedly covered all of these costs without reimbursement by Lotus Academy, Memeger said.

As a result of the misuse of the funds, investigators say the New Media school was unable to pay its expenses, including retirement fund payments, textbook vendor payments, and payroll checks.

"As a result, New Media struggled financially and failed to pay some legitimate New Media expenses," explained Assistant D.A. Joan Burnes.

Prosecutor Joan Burnes says Clark and Walker cheated the Pennsylvania School Employees retirement system and money was not put into New Media's Bank account to cover teachers' paychecks.

Just two years ago, other financial problems were discovered at the school, and parents complained their children were not being properly educated.

"I'm very angry," said Lecia Nickens, "because they never even let any of us know that they were under investigation."

The school's current CEO says the school is moving forward and trying to gain the parents' trust.

"We are there for their children. We're still working very, very hard. We're committed to their learning, and whatever is going on news wise, doesn't impact on our school day," says Donna Marie Parker, New Media CEO.

Walker and Clark are no longer involved with the school.

Clark was in front of a federal judge earlier on Thursday, and he was allowed to be out of jail until his next court date.

Walker is not in custody, but she will have a first appearance in federal court on Friday.

If convicted of all charges, Clark and Walker each face a substantial term of imprisonment, three years supervised release, a $6,750,000 fine and a $2,700 special assessment, the U.S. Attorney said.

Walker's lawyer, Thomas Bergstrom, told the Associated Press he plans to fight the charges. He says the charter school's finances are complicated. He says the restaurant, for instance, provided school lunches.

The AP said it was not immediately clear if Clark has a lawyer.