Rock Island Argus: Area man questioned in fraud case
A local school board president, who also serves as executive director of the Rock Island County Council on Addiction, has been questioned by federal agents in connection with an investigation into allegations that a former dean at the University of Louisville mishandled federal grant funds.
Thomas Schroeder, of Port Byron, said Thursday he is cooperating with investigators, and immediately returned money sent to his non-profit corporation in connection with a U.S. Department of Education grant to create a center to help schools boost student achievement on federal No Child Left Behind exams.
The project manager, Robert Felner, until recently was dean of the College of Education and Human Development at the university.
Mr.Schroeder was listed as director of the National Center on Education and Prevention Inc., a non-profit corporation he formed in Rock Island in 2001 at Mr. Felner’s request. He said the center had served as the fiscal agent in other projects supervised by Mr. Felner.According to reports published by the Louisville Courier-Journal, the center allegedly received $450,000 from a $694,000 federal grant to provide and administer education surveys in connection with the project.
Mr. Schroeder said that in 2007 the center received a contract for the project, which he signed and returned to Mr. Felner. It later received two payments, one for $200,000 and another for $50,000. Both checks were returned uncashed, he said, at Mr. Felner’s direction.
He said he is unaware of any other payments, specifically $200,000, made to the center.
His organization performed no work in connection with the project, and that was the last he heard about the project until two Secret Service agents knocked on his door last month, he said.
“I found out this was being investigated when two federal agents came to my home. There were some forged addendum to this contract and forged signatures of mine. This had been going on all along. Where the money is and what was done with the money we had nothing to do with,” Mr. Schroeder said.
Mr. Felner’s attorney, Scott Cox, could not be reached for comment Thursday. Earlier, however, he confirmed to the Courier-Journal that Mr. Felner is the subject of the probe.
University spokesman, John Drees, could not be reached for comment Thursday, but did say earlier in the week the university is cooperating in the investigation.
“We are investigating all leads as we typically do in fraud cases, which usually have a lot of fingers. We’ll follow them out,” said U.S. Attorney David Huber.
He declined to speak about specifics of the case.
Mr. Schroeder met Mr. Felner in late 1987 or early 1988 when Mr. Felner worked for the University of Illinois and Mr. Schroeder was working for RICCA.
Mr. Felner was involved with a state agency that evaluated substance abuse and alcoholism programs throughout the state. After that, Mr. Felner became an evaluator of large grant programs throughout the state, Mr. Schroeder said, and they had occasions to work together and became friends.
The National Center on Public Education and Prevention was formed in 2001 in Rock Island after Mr. Felner had moved to Rhode Island. “He called me and said, ‘I have this assessment which I can use to help schools determine where they need to improve. I need an organization to be the fiscal agent and catalyst for that’,” Mr. Schroeder said.
Mr. Felner even named the nonprofit, Mr. Schroeder said. “It all sounds a little funny now, but he didn’t want his name as a member of the board or staff member,” he said.
Mr. Schroeder became the executive director and fiscal manager. His job was to sign contracts, receive checks, take care of legal issues, get paid and send the rest of the money to Mr. Felner. On two projects, they also brainstormed and bounced ideas off one another.
Mr. Felner handled all the assessments and payment to those doing the research and analyzing the data, Mr. Schroeder said.
“I had no program responsibilities with the national center,” Mr. Schroeder said, adding that he didn’t know how the assessments were delivered.
They worked together on two projects before the contract with the University of Louisville. In 2002, the center received a $400,000 contract for a project with the Atlanta school district and in either 2003 or 2004 received approximately $125,000 for a project with the Santa Monica, Calif., school district.
For that work, he said, he was paid $3,000 a month as director of the center.
Mr. Schroeder admitted that in 2006 he failed to file required paperwork with the Illinois Secretary of State’s Office, and that the state considers the corporation to be dissolved. At that point, he said, the center wasn’t actively involved in any work.
In late 2006 or early 2007, Mr. Felner told Mr. Schroeder about a contract with the University of Louisville to do work with Louisville schools on a No Child Left Behind project.
Mr. Schroeder signed the contract and returned it to Mr. Felner.
“Shortly after that, a check arrived in Rock Island for $200,000. I called Dr. Felner at the university and asked, ‘What is this? What are we to do with this? He said the check was a mistake, it shouldn’t have been written and to send it back,” Mr. Schroeder said.
Mr. Schroeder said Mr. Felner seemed livid that the check had been sent. It was sent back to Mr. Felner.
Then about Christmas 2007, a $50,000 check arrived in Rock Island. Mr. Schroeder said he called Mr. Felner, who again said to send the check back. It was a mistake.
“When it got to this Louisville thing, we had no role. No role at all. We honestly didn’t think there was a contract because we had to send the checks back. I got the impression from that that it was a mistake and this wasn’t happening,” he said.
He said everything with the nonprofit corporation seemed legitimate until this happened.
“It just seemed like a good thing. It was a good way for schools to identify where improvement is needed in student achievement, parent involvement and various areas. That’s why it was such a shock when federal officers came to my house and started talking to me about all these things that weren’t done, and how they came to find there weren’t any students surveyed or teachers surveyed.”
Mr. Schroeder is upset that his name is involved. “I’m distraught about whatever might be possibly involved here. Yes, I’m mad. I’m betrayed,” he said.
“It is real strange. We were close friends and professional colleagues, then this happens.”
Mr. Schroeder also worked as a research assistant for Mr. Felner from Jan. 1, 2005, until this past April. He was paid $2,400 a month to search for programs and funding opportunities for the university.
Mr. Schroeder said he does not know from where he was paid — the university’s general fund or a grant — but had to provide federal authorities with records of the time he spent doing the work.
Mr. Felner’s last day with the university was June 30. He resigned to take a position as chancellor at the University of Wisconsin-Parkside. According to the Louisville Courier -Journal, he backed out of the job after the federal investigation became public on June 20.
Putting The Bee on gifts given to a public university
Courier-Journal: Putting The Bee on gifts given to a public university
Earlier this month, The Fresno Bee published what could be its last major piece about the matching gifts scandal at its local university.
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“Wrapping up a painful chapter in campus history,” reported George Hostetter, “Fresno State announced that it has been able to keep almost all of the $2.9 million in corporate matching gifts it received improperly over a 17-year period.”
The newspaper noted that Peter Smits, vice president for advancement at Fresno State, said the institution was able to contact most of the 207 companies making matching gifts from 1986 to 2003 that, according to a university-commissioned report, “were improperly accepted for athletics.”
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