Director bought hot tub, NBA tickets with $337,000 stolen from school, TN auditor says

·4 min read
Tennessee Comptroller of the Treasury

Close to $400,000 in funds disappeared from a charter school in Tennessee over the course of nearly five years, according to state auditors.

Now three former officials are accused of siphoning the money for their personal use.

A grand jury in Shelby County, Tennessee, indicted Corey Johnson, Robert Williams and Michael Jones in November on theft charges following an investigation by the Tennessee Comptroller of the Treasury, the state agency said in a news release on Wednesday, Dec. 1.

Johnson, Williams and Jones worked at the Memphis Academy of Health Sciences, a charter school with students in grades 6-12, at the time of the alleged scheme.

“These thefts were carried out over a period of four and-a-half years without scrutiny by the MAHS Board of Directors,” Comptroller Jason Mumpower said in the release. “Board members have a duty to uphold the integrity and ethics of the organization under their oversight. Each board member has a fiduciary responsibility to ask tough questions, perform due diligence, and establish clear policies and internal controls related to financial activities.”

Johnson, Williams and Jones could not be reached for comment by McClatchy News, and information regarding their defense attorneys was not immediately available.

According to the auditor’s report, Johnson and Williams were longtime employees of the charter school. Johnson served as the chairman of the board before he became the interim executive director in 2015 and the executive director the following year. Williams worked in the finance department for eight years before he was promoted to director of finance in July 2016.

Jones was reportedly hired to be the nutritional services director around the same time.

‘A charismatic manipulator’

Throughout his tenure as director, Johnson is accused of misappropriating at least $253,863 from five different school bank accounts. Investigators said he did so with unauthorized debit card transactions, checks, wire transfers and cash withdrawals.

The money was spent on a wide range of personal expenses — including stays at Caesars Palace & Casino in Las Vegas, NBA tickets for the Memphis Grizzlies, veterinary bills and a $5,000 hot tub from Family Leisure, according to the report.

At least $19,621 went toward child support payments, investigators said.

“Johnson did not provide any documentation to justify these disbursements, and school officials confirmed to investigators that none of these transactions benefited the school, its teachers, or students,” the report states.

Johnson is also accused of accepting $84,091 worth of stipends, bonuses and duplicate salary payments between 2017 and 2019. The board of directors ultimately fired him on Dec. 3, 2019.

Investigators said there was little oversight of the school’s operations. Johnson also had “personal friendships, fraternity connections, and other social organizational ties” to several members of the board.

According to the report, he“filtered” what information the board received and “abused his position and authority to carry out and conceal his misappropriations.”

Several board members reportedly described Johnson as a “charismatic manipulator.”

Crab legs and steak

Williams — with Johnson’s unauthorized approval — received $35,295 in duplicate salary payments, stipends and vacation buy-backs between November 2015 and October 2017, according to the comptroller’s report. The stipends included three payouts totaling $25,000, and the vacation buy-back totaled $5,545.

“Williams further admitted that he did not deserve these payments, this money belonged to the school, and he is willing to pay the money back,” investigators said in the report.

He was fired on Feb. 12.

Jones, meanwhile, is accused of ordering $21,586 worth of food for himself using the charter school’s vendor between September 2016 and March 2020.

“Jones’ unauthorized purchases included shrimp, crab legs, ribeye steaks, ribs, salmon, catfish, and lobsters — food that is typically not served to students in a school setting,” investigators said. “Cafeteria employees confirmed to investigators that these food items were never served to MAHS students.”

The comptroller’s office said Jones also spent $3,528 in school funding to repair his car as well as another employee’s. He was fired on Sept. 28, 2020.

Auditors identified a third category of more than $400,000 in potentially misused funds that they classified as “questionable.” That includes $360,350 that Williams reportedly received as compensation, stipends and bonuses as well as $40,170 that Johnson is accused of taking from school bank accounts to pay a local civic organization of which he is a member.

“Williams stated to investigators that his performance evaluations in 2018 and 2019 were not good; yet he received multiple stipends and performance bonuses in both of those years,” investigators said.

Johnson, Williams and Jones were indicted on Nov. 9. Johnson was charged with one count of theft over $250,000 and one count of theft over $10,000. Williams was charged with one count of theft over $250,000. Jones is facing one count of theft over $10,000 and another count for theft over $2,500.

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