The founding superintendent of one of the most successful charter schools in Texas history and her husband were indicted on charges of embezzling more than $2.6 million intended to benefit school programs for its enrolled students.
On late Wednesday, Annette Cluff and Alsie Cluff, Jr. were charged with 19-counts of conspiracy, mail fraud, tax evasion and obstruction of justice, the U.S. Attorney Kenneth Magidson announced in a press release on July 16.
The 21-page indictment is attached at the bottom of this article.
Annette Cluff was the founding superintendent of the Varnett Public School (VPS). Husband Alsie was the facilities and operations manager of the three campus charter schools located in Northeast and Southwest Houston. VPS serves approximately 1,600 students pre-Kindergarten through fifth grade.
The Cluffs ran VPS as a private school from 1984 through 1998, then converted it to a taxpayer-supported charter school after winning approval from the State Board of Education.
The indictment purports that the Cluffs misused their positions of trust and authority to embezzle in excess of $2.6 million in funds intended for the operation and function of the charter school and its programs.
“Today’s indictment alleges that these school officials abused their positions of trust to steal funds from the very ones they promised to serve – the children who attended the Varnett Public School,” said Neil Sanchez of the U.S. Department of the Education’s Office of the Inspector General.
According to the Houston Chronicle, the Cluffs, who resigned in August of 2014, are accused of opening four “off-books accounts” that were kept secret from the school’s office manager, external accountant and income tax preparer.
The Cluffs allegedly embezzled more than $1 million from “money orders” that parents submitted for school field trips and fundraisers such as books fairs and carnivals, and hid money from vendors, insurance companies and federal agencies, according to the authorities.
The US Attorney’s office also said that the Cluffs allegedly did not pay income taxes on the money they allegedly embezzled and were charged with tax evasion of approximately $851,845, not including interest and penalties owed to the IRS.
Dan Cogdell, the Houston attorney representing the couple, said the Cluffs already repaid a “significant” amount of money to the school and are “going to do everything they can to make the situation correct,” according to the Chronicle.
A 2014 VPS audit submitted to the Texas Education Agency (TEA) showed $1.5 million was recovered from former superintendent Cluff as of Jan. 8, 2015. It is in a trust account per an agreement with the U.S. Department of Justice.
The TEA proposed revoking the school’s accreditation after the investigation uncovered the wrongful spending but proceedings never happened. VPS continues to operate says agency spokeswoman DeEtta Culbertson.
In response to the indictment, VPS said that the school instituted entirely new leadership and a new board since the Cluffs’ 2014 departure. Interim Superintendent Margaret Stroud also issued a statement:
“We are disheartened to learn of the allegations; however, we are moving forward and will focus on the four principles of our core beliefs: high student achievement, safety, respect, and common decency.”
KTBC-7 reports that the Cluffs could not be reached for comment.
The Cluffs are expected to surrender to authorities and appear before a judge before the end of the week.
“We take allegations such as these seriously,” said Magidson. “If proven guilty, those found to have taken funds intended for the benefit of students for their personal benefit will be held accountable for their actions.”
If they are convicted of mail fraud or obstruction of justice, each of them may face up to 20 years in prison, says the Houston Business Journal. Tax evasion charges carry a possible five-year federal prison sentence. The Cluffs also face a possible $250,000 fine for all charges, if convicted.
“Those in positions of public trust must and will be held to higher standards,” said FBI Special Agent in Charge Perrye K Turner.
Follow Merrill Hope on Twitter @OutOfTheBoxMom.