MONTGOMERY, Ala. – On Tuesday, Feb. 23, 2021, six individuals appeared in court after being indicted on charges related to the fraudulent enrollment of students in Alabama virtual schools, announced United States Attorney Louis V. Franklin, Sr., FBI Special Agent in Charge Johnnie Sharp, Jr., and Acting Special Agent in Charge Kori Smith of the U.S. Department of Education’s Office of Inspector General.
The defendants named in the indictment are Dr. William L. (“Trey”) Holladay, III, 56, a resident of Athens, Alabama and the former superintendent of the Athens City Schools district; Deborah Irby Holladay, 57, of Athens and formerly employed by the Athens City Schools district; William Richard (“Rick”) Carter, Jr., 45, also of Athens, currently the executive director of planning for Athens City Schools and formerly the district’s director of innovative programs; David Webb Tutt, 61, of Uniontown, Alabama; Gregory (“Greg”) Earl Corkren, 56, of Tuscaloosa, Alabama; and Thomas Michael Sisk, 55, a resident of Toney, Alabama and formerly the superintendent of the Limestone County School district.
The indictment alleges that the defendants conspired to fraudulently enroll students in public virtual schools and then falsely report those students to the Alabama State Department of Education. As a result of this, districts received payments from Alabama’s Education Trust Fund as if the students actually attended public schools. The various defendants then received, for their own personal use, portions of the state money. The defendants skimmed the state money through direct cash payments and payments to third-party contractors owned by the various co- conspirators.
According to the indictment, the defendants obtained student identities to use in their scheme from various private schools located across the state—particularly private schools in the Black Belt region of Alabama. The defendants offered the private schools various inducements—including computers, direct payments, and access to online curriculum—to persuade them to share their students’ academic records and personal identifying information with the public school districts. During the school years that the scheme allegedly occurred—the 2016-2017 and 2017-2018 school years—the private school students and parents had little to no connection with the public school districts in which they were supposedly enrolled. The private school parents continued to pay tuition to the private schools. The students continued to attend the brick-and-mortar private schools each day, they received instruction from employees of the private schools, and, after class, some played sports for their private schools. All the while, the state reimbursed the Athens City Schools district and the Limestone County Schools district for the cost of supposedly educating these private school students.
The indictment further alleges that the defendants went to various lengths to conceal the fraud from the state. Such lengths included: creating fake report cards, manufacturing false addresses for the students of the private schools who lived outside of Alabama, and submitting falsified course completion reports to the state department of education.
All six of the defendants are charged with conspiring to commit mail and wire fraud. The indictment also contains substantive wire fraud charges against Trey Holladay, Deborah Holladay, and Carter. Additionally, Trey Holladay, Carter, and Corkren are charged with aggravated identity theft.
If convicted of the conspiracy charge, each defendant faces a maximum sentence of five years’ imprisonment, as well as substantial monetary penalties and restitution. Any defendant convicted of wire or mail fraud faces a maximum sentence of 20 years’ imprisonment, as well as substantial monetary penalties and restitution. Additionally, any defendant convicted of aggravated identity theft could receive a mandatory consecutive two-year sentence on each count.
An indictment merely alleges that crimes have been committed. All defendants are presumed innocent until proven guilty beyond a reasonable doubt.
“The money Alabama sets aside for public education should be used for exactly that— educating the students of our public schools,” stated Franklin. “The defendants in this case prioritized their own profits over the education needs of our students. In doing so, they stole children and parents’ identities and bribed administrators of private schools. I hope that this indictment serves as a warning for others who might try to line their pockets with public funds.”
“Public corruption remains the FBI’s top criminal priority because public officials must be trusted to do their jobs with honesty and integrity,” stated Sharp, Jr. “The citizens of Alabama should rest assured that the FBI will continue to work with our law enforcement partners to investigate corruption at every level and hold accountable those officials who violate the public’s trust and use their position f or profit or gain.”
“These so-called educators have been charged for preying on the schools that placed them in positions of trust to educate students and the students they promised to serve. That is completely unacceptable,” said Kori Smith. “As the office responsible for identifying fraud, abuse, and other criminal activity involving U.S. Department of Education funds and programs, ensuring that those who abuse these funds or game the system for their own selfish purposes are stopped and held accountable for their criminal actions is a big part of our mission.”
“Integrity and trust are characteristics of Alabama teachers and administrators. When I was hired as your state superintendent, I committed to improving education in our state which includes working closely with our local, state, and federal partners to ensure fiscal responsibility and accountability, so every crucial dollar is spent on educating our students,” said Alabama State Superintendent Dr. Eric Mackey. “Funds allocated for education should be spent to educate our public school students. However, over the course of several years, the individuals named in the indictment betrayed the trust of not only our citizens but our students, parents, and other teachers and administrators who continue to work diligently every day. We will continue to hold high standards at every level – from local schools to the state – with the expectation that every public school dollar will be spent to support our children.”
“Public officials and employees are obligated to perform their duties and administer funds with integrity and according to requirements of the law,” said Alabama Attorney General Steve Marshall. “As attorney general, I am committed to stand together with our partners in law enforcement to ensure that allegations of wrongdoing are investigated, and that appropriate action is taken.”
This case was investigated by the Federal Bureau of Investigation and the United States Department of Education’s Office of Inspector General. The Alabama Attorney General’s Office also assisted in the investigation. Assistant United States Attorneys Jonathan S. Ross, Alice S. LaCour, and Brett J. Talley are prosecuting the case.
Holladay et al Indictment by TheCullmanTribune on Scribd
