Feds: Niles-Based Tutoring Firms Defraud Schools Out Of $33M
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(STMW) — Two north suburban companies and the father and son who own them defrauded hundreds of public school districts in 19 states, including Illinois, of more than $33 million, federal prosecutors charged Monday.
Between July 2008 and February 2012, Niles-based Brilliance Academy Inc. and Babbage Net School Inc., misled the schools about the nature and quality of their tutoring services to benefit financially, a statement from the U.S. Attorney’s office said.
The firms provided substandard educational materials to students, falsely inflated invoices to school districts for purported tutoring, and distributed false student progress and improvement reports, federal prosecutors allege.
Co-owners Jowhar Soultanali, director of operations at both companies; and his son, Kabir Kassam, president of both, were also indicted, prosecutors said.
Soultanali, 58, of Morton Grove; and Babbage Net School are charged with five counts of mail fraud and three counts of federal program bribery, prosecutors said.
Kassam, 34, of Wheeling; and Brilliance Academy were charged with five counts of mail fraud and two counts of federal program bribery, according to prosecutors.
On behalf of the their companies, Soultanali and Kassam were approved as Supplemental Educational Services providers in Illinois, Indiana and 17 other states during the 2008-09 and 2009-10 school years, prosecutors said.
Soultanali and Kassam kept $8 million and $13.6 million, respectively, for themselves from more than $33 million acquired from at least 200 public school districts nationwide.
In addition to the more than $33 million, the indictment seeks forfeiture of Soultanali’s and Kassam’s homes, three additional condominiums, five luxury automobiles, six life insurance policies, and various items of diamond jewelry purchased in 2009.
The pair are also charged with paying bribes to three school officials in Texas and one state education official in New Mexico for recruiting students and steering federal and state funds to their companies, prosecutors said.
Also indicted on federal program bribery charges are Arturo Martinez, 52, an administrator with the New Mexico Public Education Department; Cedric Petersen, 61, assistant principal at Fox Technical High School in San Antonio; Armando Rodriguez, 54, former SES coordinator at Roy Miller High in Corpus Christi; and Brian Harris, 33, SES coordinator at Sam Houston High in San Antonio, prosecutors said.
Each of the four received an unspecified amount of bribe money and Peterson also accepted Caribbean cruise vacations.
All eight defendants—the six individuals and two companies—will be arraigned at later dates in U.S. District Court in Chicago.
Each count of federal program bribery carries a maximum sentence of 10 years in prison and a $250,000 fine. Each count of mail fraud carries a maximum of 20 years and a $250,000 fine.
Brilliance Academy and Babbage Net school face a maximum penalty of five years’ probation and a $250,000 fine on each count, prosecutors said.
(Source: Sun-Times Media Wire © Chicago Sun-Times 2014. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed.)