Perdido 03

Perdido 03

Wednesday, January 30, 2013

Another Tutoring Company Found To Have Bilked DOE Out Of Millions

Bloomberg claims he will have to cut 2,500 teacher jobs over the next two years as a result of losing the 4% increase in state aid that was contingent upon a new teacher evaluation agreement.

Of course the majority of the cuts will come from schools rather than the central Tweed budget.

And even as Bloomberg is claiming he has to cut these teaching jobs in order to keep the city budget in the black, we get word of another consultant company bilking the DOE out of millions:

A substitute teacher was busted yesterday for an alleged long-running tutoring scam that overbilled the Department of Education for hundreds of thousands of dollars in federal funds.

Michael Logan, 48, of White Plains, allegedly recruited former students to help in his scheme, hiring them as “aides” for after-school tutoring in The Bronx at the Monroe and Columbus high schools, which racked up $2.3 million in bills between 2005 and 2012.

But instead of helping disadvantaged students boost their grades, Logan had them round up signatures from kids at sports practice to falsify attendance sheets for the now-defunct TestQuest tutoring company, court papers say.

And if they couldn’t find enough students to fill out the forms, Logan — a TestQuest manager — allegedly told the aides “to sign the sheets themselves.”

“I already got paid, this is how you get paid,” he said, according to a Manhattan federal-court complaint.

Logan has been barred from teaching pending the outcome of his charges.

Meanwhile, the feds yesterday joined a whistle-blower suit against TestQuest, claiming its management “knew about, deliberately ignored or recklessly disregarded the fraud.”

TestQuest founder and CEO Tiffany Hott didn’t respond to an e-mail seeking comment.

The TestQuest bilking is not an isolated incident. 

Comptroller John Liu found another tutoring company - a company the DOE just gave another multi-million dollar contract to - has bilked the DOE out of millions over the past few years and is under federal investigation:

The largest provider of after-school tutoring services for city public schools pupils, Champion Learning Center LLC, has been under investigation since last summer by the Manhattan U.S. attorney’s office, the Daily News has learned.

The federal probe came to light this week after City Controller John Liu refused to approve a new $4.5 million contract the Department of Education awarded the company in November.

“There is sufficient reason to believe that the proposed contractor is involved in corrupt activity,” Liu said in a Jan. 11 letter to the Department of Education, a copy of which The News obtained under a Freedom of Information request.

The firm, Liu noted in his letter, has twice been found to be improperly billing the city for its services — once by the department itself and once by Liu’s auditors. As a result, Champion has been forced to repay more than $6 million since 2009.

In addition, Liu said, the firm revealed in an Oct. 9 update to the city’s VENDEX system that it is the target of an ongoing federal civil probe.
Now neither of these instances of overbilling or fraud involving Champion Learning Center or TestQuest add up to $250 million.
But these are the instances of fraud and overbilling that have been caught.
I could add the Willard Lanham fraud of the DOE for $1.4 million and the Judith Hederman fraud of the DOE for $43 million to the Champion and TestQuest fraud and we're starting to get into some real money here.
Not to mention the CityTime fraud ($600 million stolen) and the 911 system that is now $1 billion overbudget and years overdo.

I bet if an outside auditor looked at the other DOE and city contracts with outside companies, they'd find many other instances of fraud and overbilling too.

So Bloomberg can play prudent fiscal genius with his last budget all he wants - the truth is, this $250 million in lost aid is nothing compared to the money Bloomberg has allowed the outside consultants to steal during his tenure as Incompetent-In-Chief.


  1. Let's also never forget that the threatened cuts are a literal form of political extortion. There is no compelling fiscal/budgetary problem causing them; instead, it's a pressure point against the union, exacted against the schools and students.

    The entire political dynamic behind this - that students and schools should be held hostage, so that a pound of flesh can be extracted from the teachers - is repugnant, and typifies the command-and-control regime that has taken over education.

    1. Well said, Michael. I think that will be tomorrow's post focus.

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