OIG Investigative Reports, Former Director of Internal Audit for the District of Columbia Public Schools sentenced to prison for theft of federal funds Skip to main contentAbout UsContact UsFAQs Language Assistance Englishespañol中文: 繁體版Việt-ngữ한국어TagalogРусский U.S. Department of Education Search for: Toggle navigation U.S. Department of Education Student Loans Grants Laws Data About ED OFFICES Home Reports & Resources Programs/Initiatives News Office Contacts Investigation Report United States Attorney's Office District of Columbia Jeffrey A. Taylor United States Attorney PRESS RELEASE FOR IMMEDIATE RELEASE Wednesday, May 7, 2008 USAO Public Affairs (202) 514-6933 www.usdoj.gov/usao/dc Former Director of Internal Audit for the District of Columbia Public Schools sentenced to prison for theft of federal funds WASHINGTON - Eugene P. Smith, 47, the former Director of Internal Audit for the District of Columbia Public Schools, has been sentenced to six months in prison to be followed by four months of home confinement in connection with his theft of $46,742.94 from programs receiving federal funds, U.S. Attorney Jeffrey A. Taylor announced today. Smith, formerly of Odenton, Maryland, was sentenced earlier today in the U.S. District Court for the District of Columbia before the Honorable Rosemary M. Collyer. In addition to the prison sentence, Judge Collyer placed Smith on two years of supervised release and ordered him to pay restitution in the amount of $46,742.94 to the District of Columbia Public Schools. Smith pled guilty to one count of theft from programs receiving federal funds on December 10, 2007. As part of his plea, Smith admitted that from January 1997 through July 2002, he was employed by the District of Columbia Public Schools, and that he was the Director of Internal Audit for DCPS from February 1999 through July 2002. On September 6, 2001, the District of Columbia Public Schools Board of Education revoked the charter of a public charter school, the New Vistas Preparatory Public Charter School (“New Vistas”). On September 7, 2001, in his capacity as the Director of Internal Audit for DCPS, Smith became responsible for closing out New Vistas' financial accounts. On September 7, 2001, Smith designated himself as the sole signatory on a bank account held in the name of New Vistas (“the original account”). On October 4, 2001, Smith closed the original account and transferred the balance of the original account, approximately $518,125.66, into a new account he opened at the same bank (the “second account”). The U.S. Department of Education had provided benefits to DCPS and DCPS, in turn, had provided benefits to New Vistas. Smith admitted that he was the sole signatory on the second account. He also admitted that he obtained a business check card, or debit card, for the second account, even though any outstanding debts would have been, and, in fact, were, paid through purchase orders and checks. Smith also admitted that, at his direction, BB&T mailed the account statements for the second account and the debit card associated with that account to his then-home address in Odenton, Maryland. On or about July 31, 2002, Smith’s employment with DCPS was terminated. At the time of his termination, New Vistas' vendors had been paid off and the balance in the second account was approximately $52,679.90. Smith, however, did not close the second account before the termination of his employment and did not relinquish possession of the associated debit card. Instead, Smith admitted that between April 2003 and July 2003, following his termination from DCPS, he made unauthorized expenditures of approximately $46,742.94 in cash and incurred fees for his personal benefit from the second account as a result of approximately 114 transactions using the debit card associated with that account in the State of Maryland and the Commonwealth of Virginia. In announcing the sentence, U.S. Attorney Taylor praised the investigative efforts of Special Agents Michele Rankin and Sean Ryan of the Federal Bureau of Investigation, Special Agent Kerthalia Peavely of the District of Columbia Office of the Inspector General, and Special Agent Derrick L. Franklin of the U.S. Department of Education. He also recognized the efforts of U.S. Attorney’s Office Legal Assistant Lisa Robinson. Finally, he commended the efforts of former Assistant U.S. Attorney Kim Herd and Assistant U.S. Attorney Michael K. Atkinson, who prosecuted the case. ### 08-118 Top Printable view Share this page Last Modified: 08/05/2008 How Do I Find... Student loans, forgiveness College accreditation No Child Left Behind FERPA FAFSA 1098-E Tax Form 2015 Budget Proposal More > Information About... Transforming Teaching Family and Community Engagement Early Learning K-12 Reforms More > Connect Facebook Twitter YouTube Email RSS Google+ More > MISUSED FOIA OIG Fraud Hotline Our mission is to promote student achievement and preparation for global competitiveness by fostering educational excellence and ensuring equal access. 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Former Director of Internal Audit for the District of Columbia Public Schools sentenced to prison for theft of federal funds. Washington, DC, May 7, 2008
Published by the Department of Education, Office of Inspector General on 2008-05-07.
Below is a raw (and likely hideous) rendition of the original report.