Six current or former employees of the San Francisco Unified School District are facing embezzlement and fraud charges stemming from the alleged misuse of an estimated $15 million in grant funding, the district attorney announced Tuesday.
Money earmarked to provide students with support services, nutritional programs and violence-prevention programs was allegedly directed into bonuses, slush funds and unwarranted pay increases.
District Attorney George Gascón said roughly $250,000 of the $15 million in federal and state grants went to personal use, but how and what the money was spent on is not known.
“We are mortified at the thought that trusted employees would conceive of such a scheme to divert funds from the children for whom they are intended,” Superintendent Richard Carranza said.
Meanwhile, three nonprofit organizations are being probed in the ongoing investigation because they were recipients of part of the grant funding.
Those nonprofits include Edgewood Center for Children and Families, which has returned an estimated $2.5 million of the $4 million it received in funding to the district. It charged the district roughly $400,000 in administrative fees. Bay Area Community Resources, meanwhile, has returned roughly $1.7 million from the $5 million they received. It charged an estimated $250,000 in administrative fees.
San Francisco Children’s Alliance received between $5.5 million and $6.3 million from grant funding. Of that money, $500,000 was charged for administrative fees. No money has been returned to the school district. This agency also reportedly gambled roughly $250,000 in the stock market and lost.
“Money was taken and used inappropriately,” Gascón said. “There was a substantial amount of money certainly being spent on things other than what the grant called for.”
School district officials said they became aware of the possible misuse of funds during the 2010 budget process. It was at that time, Carranza said, that the District Attorney’s Office began looking at finances in the district’s Student Support Services Division, where most of the accused individuals were employed.
Around the same time, Trish Bascom, 66, the associate superintendent of student support services, retired. Former Senior Executive Director Linda Lovelace, 62; former assistant principal at Marina Middle School Mychel Navales, 42; and Senior Executive Director Meyla Ruwin, 51, also left the district around the start of the investigation. Additionally, administrative analyst Lilian Capuli, 51, has been terminated and senior clerk Betty Wong, 57, has been placed on administrative leave.
All six are being charged with a variety of felony charges including grand theft, falsifying documents, perjury and forgery for wrongfully diverting funds for up to a 10-year period.
Some individuals involved could face up to 20 years in prison if convicted.
Warrants have been issued for all six of the accused. Gascón said they are expected to turn themselves in to authorities today.
Carranza said while the district is shocked at the incident, he does not expect San Francisco to be affected when applying for future grant funding.
“The district does have a track record,” he said. “At this point I can’t point to any particular piece of evidence that says we’re not going to be granted.”