Category Archives: Legal issues

The Journal Times: Felner indicted on charges of misusing federal grant money

Before he was chosen to lead the University of Wisconsin-Parkside, Robert Felner pilfered more than $2 million in grant money, according to charges filed Wednesday.

Felner, also former education dean at the University of Louisville, and an associate, Thomas Schroeder of Port Byron, Ill., were charged Wednesday with conspiracy to commit money laundering, mail fraud and conspiracy to defraud the Internal Revenue Service.

Felner also faces six charges of federal income tax evasion for allegedly failing to report $1.6 million in income from 2002-2007. The indictment says he owes $500,000 in back taxes.

The indictment states Felner and Schroeder conspired to embezzle more than $1.7 million from the University of Rhode Island, fraudulently obtained $576,000 in grant money and attempted to embezzle another $240,000 from the University of Louisville through the National Center on Public Education and Social Policy at the University of Rhode Island.

U.S. Attorney David Huber in Louisville said the University of Rhode Island, where Felner was director of the School of Education from 1996 to 2003, was the biggest victim in the scheme.

“People who are in a trusted position, who have credibility, are able to get away with things to a point,” Huber said. “Eventually, things come crashing down.”

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The Gazette (Maryland): Former University of Louisville dean indicted on conspiracy, tax evasion charges

Robert D. Felner, the former of dean of the University of Louisville who signed off on Superintendent John E. Deasy’s doctoral dissertation, was indicted Wednesday by a grand jury in Kentucky. Felner was indicted on charges of conspiracy to commit money laundering, mail fraud, and conspiracy to defraud the Internal Revenue Service, as well as tax evasion, according to a news release from U.S. Attorney David L. Huber of the Western District of Kentucky.

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Providence Journal: Update: Ex-URI official indicted in Ky. on fraud charges

Robert Felner, a national education figure and former director of the University of Rhode Island’s School of Education, was indicted today by a federal grand jury on charges of money laundering conspiracy, mail program fraud and tax evasion by the U.S. Attorney in Kentucky.

According to the indictment, Felner, 58, and a former colleague in Illinois, Thomas Schroeder, 58, conspired to embezzle about $1.7 million from URI.

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Courier-Journal: Amount of money shocks officials

University of Rhode Island officials said yesterday they were not surprised that former University of Louisville education dean Robert Felner, who once headed their education school, was indicted on charges of misappropriating federal grant and other money.
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But they were shocked to learn how much money Felner is accused of taking from an education center he created and directed at the university until 2006 — $1.7 million.

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Courier-Journal: U of Louisville students, faculty express concerns

He was a brash university dean who brought in millions in grants, racked up faculty grievances and eventually generated headlines in a criminal investigation.

Yesterday’s indictment of former University of Louisville Education Dean Robert Felner provoked campus reaction ranging from head-shaking dismay to worries about the university’s standing.

“It’s a disgrace,” said senior Mike Giurgevich, 22, who stood outside the College of Education and Human Development that Felner once headed. “I want to be a teacher, and you can’t be misusing education funds.”

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Courier-Journal: Felner Inquiry Timeline

1997: While director of the University of Rhode Island’s School of Education, Robert Felner establishes the National Center on Public Education and Social Policy there. He is the center’s director until 2006.

October 2001: Felner associate Thomas D. Schroeder of Illinois helps incorporate the National Center on Public Education and Prevention in Illinois, serving as its executive director.

July 17, 2001, to Feb. 12, 2004: Several bank accounts are opened under the National Center for Public Education and Prevention’s name, including accounts in Illinois, Rhode Island and Louisville. Authorities allege Felner and Schroeder funneled $1 million from the Atlanta Public Schools meant for the Rhode Island center to the Illinois center.

July 2, 2002, to Sept. 24, 2007: Authorities allege Felner and Schroeder funneled $326,000 from Buffalo, N.Y., and New York Middle School Association meant for the Rhode Island center to the Illinois center.

Sept. 9, 2002, to Dec. 20, 2004: Authorities allege Felner and Schroeder funneled $375,000 from the Santa Monica/Malibu Unified School District to the Illinois center that was meant for the Rhode Island center.

July 2003: Felner is hired as dean of the University of Louisville’s College of Education and Human Development.

Jan. 1, 2005: Felner hires Schroeder to work as his research assistant and pays him $2,400 a month through April 2008.

Jan. 26, 2005: Felner is informed he is the recipient of a $694,000 congressional earmark secured by then-U.S. Rep. Anne Northup, R-3rd District, in the 2005 federal budget to create the Center for Research-Based Educational Improvement and Assessment: Support and Continuous Improvement of No Child Left Behind in Kentucky, also known as the NCLB Center.

Aug. 19, 2005: Federal officials inform U of L that the grant for the federal earmark is approved, and is to run from September 2005 to Aug. 31, 2006.

March 2006: Faculty at the College of Education and Human Development initiate a no-confidence vote against Felner. It passes 27-24.

April 1, 2006: Felner initiates a $60,000 subcontract with the National Center on Public Education and Social Policy at the University of Rhode Island for research associated with the NCLB Center.

May 5, 2006: Felner executes a $30,000 contract with the Rhode Island center for work associated with the U of L NCLB Center. U of L issues a check for the work in June.

Jan. 3, 2007: Felner executes a memorandum of agreement with the Rhode Island center, which is paid with two $15,000 checks sent by U of L in March.

Jan. 5, 2007: Felner executes a $250,000 personal-service contract with the National Center on Public Education and Prevention in Illinois. The contract is paid between March 15 and June 29. The money was deposited in a Louisville bank account controlled by Felner.

July 27, 2007: U.S. Department of Education approves a project extension until July 31, 2008.

July 31, 2007: A U of L check for $50,000 to the National Center for Education and Prevention is deposited in a Louisville bank account.

Oct. 12, 2007: The grants management office requests that Felner provide justification for adding a subcontract, and how that affected the scope of the project’s work. Felner provides that.

Oct. 26, 2007: U of L, on behalf of Felner, asks the federal education department to allow reallocation of funds for a $200,000 subcontract with the National Center for Public Education and Prevention in Illinois.

Dec. 3, 2007: Felner executes a $200,000 contract with the National Center for Public Education and Prevention in Illinois. The money was deposited in a Louisville bank account controlled by Felner.

May 2008: Felner announces he is leaving U of L at the end of June to become chancellor at the University of Wisconsin-Parkside.

May 12, 2008: Felner attempts to use $120,000 from the Offutt Endowment Account to pay for an extension on the contract with the Illinois center.

June 20, 2008: Federal investigators seize documents and a computer from Felner’s university office, and announce an investigation centering on the grant is under way.

June 24, 2008: Felner’s attorney, Scott C. Cox, confirms his client is the focus of the investigation. Felner withdraws from the Wisconsin post.

July 21, 2008: U of L President James Ramsey announces the university is conducting an internal audit of the education college’s finances and an external audit of the university’s grant and research management. He also asks the Faculty Senate to review the university’s grievance process.

Sept. 10, 2008: U of L officials appoint a committee to investigate allegations that a doctoral degree was improperly awarded to John Deasy, a Felner associate who is now superintendent of Prince George’s County Schools in Maryland.

September 2008: U of L initiates reviews of governance and management policies and its ethics policies.

Oct. 2, 2008: U of L officials announce they will create an Ombuds Office to deal with faculty and staff conflicts, disputes and complaints.

Oct. 22, 2008: A federal grand jury indicts Felner and Schroeder on charges of stealing $2.3 million in grants and contracts.

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The Chronicle: Former Louisville Dean Indicted on Charges Related to Diverting Funds

The ex-dean, along with an associate, was indicted on charges related to diverting money from a federal research grant and other contracts.

A federal grand jury issued an indictment on Wednesday alleging that a former dean of education at the University of Louisville and an associate diverted more than $2-million into their personal bank accounts from a federal research grant and from contracts with municipal school districts.

If convicted on all 10 counts—which include charges of mail fraud, money laundering, and tax evasion—the former dean, Robert D. Felner, could face at least 20 years in prison.

Mr. Felner came to Louisville in 2003 after seven years as director of the University of Rhode Island’s School of Education. He resigned from Louisville in June, when he was hired as the chancellor of the University of Wisconsin’s Parkside campus. But he withdrew from the Parkside position two weeks later, after he informed Wisconsin officials that he was the subject of a federal investigation (The Chronicle, July 4).

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PageOneKentucky.com: Highlights of Huber’s Press Conference

As we reported a little bit ago, Robert Felner has been indicted. U.S. Attorney David Huber held a press conference at 1:00 P.M. and we are there.

Here are our notes:

* Huber said the UofL Police Dept discovered this and turned things over to the Feds. He congratulated the law enforcement agencies involved in the investigation– and they deserve it. IRS, UofL PD, Secret Service.
* Huber outlined the indictment and discussed the millions upon millions of dollars that Felner squandered beginning at the University of Rhode Island. Opened several bank accounts to handle the money.
* All the money in Felner’s bank accounts seized along asset forfeiture procedures. Most of the money from the UofL grants was recovered. URI funds not recovered. Scheme at URI and UofL were essentially the same. Work contracted, work was performed but money didn’t go where it was supposed to (Bobby pocketed it). The grand jury didn’t get into what work was performed at UofL– don’t need that sort of information for the case. Have enough charges without having to get into that.
* Felner didn’t report his income from these various accounts. Yeah, duh, that’s part of the crime, right?
* Adam Walser asked why the system broke down. Huber says the grand jury doesn’t address that. Huber said people are many times able to get away with these things. Things just happen, but he can’t address what happened at UofL or URI.
* Parallel proceedings will go on re: other assets like property. Felner’s investment account was seized immediately.
* Huber believes they have the fraud, the extent of the fraud and the participants. He doesn’t see anything else coming at this point but refused to say that nothing else would come down the pike. (We hear that it will. And EVERYTHING we have predicted so far has come true. I.E., it wasn’t about the NCLB grant, it involved millions and millions of dollars, it involved property, it involved multiple individuals like Schroeder. We were right and the C-J NEVER got it.)
* Arrest warrants are out. They’ll surrender tomorrow. Sees no problem with that. (That means there’ll be mugshots, folks. MUGSHOTS.)
* Huber says the quicker you can get into an investigation, the easier it is to resolve. We only wish that were the case for former Lt. Gov. Steve Henry.
* Complex case, lot of documents, lot of people to interview. Lots of people in other states.
* The charges: Felner and Schroeder are both facing charges for $1.7mil at URI that were diverted to funds set up by the two of them; charged with fraudulently obtaining $576,000 from the UofL No Child Left Behind grant; intent to take another $240,000 from UofL; both involved in tax conspiracy; Felner is alleged to have reported over $1.6mil in 5-year period, owes approx $500K in back taxes. Those are the kind of things that could change over a period of time, though, but these are the most likely final outcomes of the case
* There are other things they did – on some of the school district cases they charged expenses to UofL. There are a lot of things in the indictment that explains the history of the Felner case. (We’ll have the indictment online for you shortly.)
* Huber says peaks and valleys of questions raised by the indictment will be filled by facts and evidence during a jury trial. Folks with further questions will need to be patient (easier said than done).

We’ll get the indictment scanned and uploaded shortly. Stay tuned.

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Courier-Journal: Felner indicted on charges of misusing federal grants

The press conference will be live here.

Former University of Louisville Education Dean Robert Felner has been indicted on charges of fraudulently obtaining nearly $2.3 million in grant money from University of Louisville and University of Rhode Island.

A federal grand jury in Louisville charged Felner, 58, with 10 counts of mail fraud, money-laundering conspiracy and income-tax evasion.

The 45-page indictment says that Felner and Thomas Schroeder, 58, of Illinois, took $1.7 million from the Rhode Island school and about $576,000 from U of L, and attempted to embezzle another $240,000 from U of L.

Felner, who resigned from U of L earlier this year, also allegedly failed to report $1.6 million in income from 2002 to 2007 and allegedly owes $500,000 in federal taxes, U.S. Attorney Dave Huber said in a news release.

Huber scheduled a 1 p.m. news conference to talk about the indictment, which will be streamed live on www.courier-journal.com.

The investigation was disclosed in June, when Felner was set to take a job at the University of Wisconsin-Parkside.

Felner has been the subject of months of scrutiny in the news media, including stories in The Courier-Journal and on WHAS-TV about how he had helped get a doctoral degree in one semester for a former California school superintendent who two years earlier had given Felner’s center a $375,000 contract.

The university appointed a panel to investigate.

President James Ramsay, who dismissed 31 complaints from faculty and staff about Felner as “anonymous crap” in a television interview, later withdrew that characterization and apologized to the faculty.

The newspaper reported that at least a half-dozen faculty members, using their names, complained about Felner to the administration and that at least four said they had to hire lawyers to fend of harassment from him.

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PageOneKentucky.com: Felner Investigation Spreads Across the Country

WHAS11’s Adam Walser just reported (at 5:30) that the Felner investigation has spread.

Federal agents have been in contact with the New York State Middle School Association and the Atlanta Public School System in connection with research studies that Robert Felner conducted there.

Atlanta Public Schools refused to provide documents to Walser because of the ongoing investigation.

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