Former Board President of Milwaukee Public Schools Charged in Bribery Scheme Linked to Philadelphia Non-Profit
PHILADELPHIA – First Assistant U.S. Attorney Jennifer Arbittier Williams announced that Michael Bonds, 60 of Milwaukee, Wisconsin, was charged today by Information with conspiracy to commit honest services wire fraud and a violation of the Travel Act arising from his participation in a bribery scheme whereby Bonds, acting in his capacity as President of the Milwaukee Public School (“MPS”) Board, accepted payments and things of value in exchange for official acts taken to benefit a Philadelphia-based, privately-operated education and development company (“Company 1”) and its senior executives.
Company 1 was an umbrella organization for several business entities that perform services related to education management, charter school operations and neighborhood development. Between 2012 and 2017, Company 1’s education component maintained management agreements with multiple schools operating in Philadelphia, Pennsylvania and Milwaukee, Wisconsin to manage the schools’ leadership teams, create the schools’ budgets and administer their payroll processes, and ensure that their financial reporting complied with various government entities. The main function of Company 1’s real estate development component was to redevelop residential properties into affordable housing in South Philadelphia neighborhoods.
Executive 1 was a Philadelphia-based founding member of Company 1 who served as the President and Chief Executive Officer since the organization's inception. Executive 2 was Company 1’s Philadelphia-based Chief Financial Officer. In that capacity, Executive 2 was responsible for Company 1’s overall financial and contract management.
The Information charges that Bonds engaged in a bribery scheme in which he received a series of payments and things of value from Executive 1, Executive 2, and Company 1 in exchange for a series of official acts that Bonds took on behalf of Executive 1, Executive 2, and Company 1.
The Information further charges that the conspirators disguised the bribes as payments for book sales from a company created by Bonds called “African American Books and Gifts.” According to the Information, the conspirators created fake documents disguising the bribery payments, including sham invoices and false entries in books, records, and tax returns. According to the Information, the conspirators also used a private commercial interstate carrier to transport bribe payments in the form of checks disguised as payments to “African American Books and Gifts,” and concealed from the MPS Board the payments Bonds received from Executive 1, Executive 2, and Company 1.
According to the Information, on December 9, 2014, Bonds appeared at a subcommittee meeting of the MPS Board and personally advocated in support of an expansion to include the opening of an additional campus by the charter school subsidiary of Company 1 in Milwaukee, Wisconsin. Bonds is then alleged to have brought a motion before an MPS Board subcommittee supporting a lease to house the additional campus, to have presided over the full MPS Board meeting at which the expansion was approved, and to have motioned the Board for approval of new lease terms favorable to Executive 1, Executive 2, and Company 1, which deferred lease payments of approximately $1,000,000 owed by the charter school subsidiary of Company 1.
“Public officials, including those like Michael Bonds who were elected by voters to manage public schools, have a duty to provide honest services to their constituents,” said First Assistant U.S. Attorney Williams. “In this case, some of those constituents are school children who have no choice but to depend on adults to make decisions in their best interest, which makes Bonds’ alleged actions even more egregious. Public officials cannot be allowed to use their positions and influence to enrich themselves.”
“Today’s indictment alleges that Mr. Bonds abused his positions of trust for person gain. That is unacceptable,” said Geoffrey Wood, Special Agent in Charge of the U.S. Department of Education Office of Inspector General’s Eastern Regional Office. “OIG Special Agents will continue to investigate allegations of fraud and pursue those who seek to enrich themselves at the expense of our nation’s students. America’s students, their families, and taxpayers deserve nothing less.”
“Rooting out public corruption remains one of IRS Criminal Investigation's highest priorities,” said Guy Ficco, IRS-CI Special Agent in Charge. “We, along with our law enforcement partners, will continue to be relentless in our mission to enforce the law and ensure public trust.”
"When an individual elected to work on local schools' and students' behalf is more focused on their own enrichment, they've failed their constituents and community," said Michael T. Harpster, Special Agent in Charge of the FBI's Philadelphia Division. "The lesson here: the FBI will continue to investigate corruption wherever we find it and bring those responsible to justice."
If convicted, Bonds faces a maximum possible sentence of ten years’ imprisonment, a three year period of supervised release, and a $500,000 fine. Forfeiture of $18,000 in bribery proceeds also may be ordered.
The case was investigated by the Federal Bureau of Investigation, the Internal Revenue Service, Criminal Investigations, and the U.S. Department of Education Office of Inspector General and is being prosecuted by Assistant United States Attorneys Eric Gibson and Mark Dubnoff.
An Indictment, Information or Criminal Complaint is an accusation. A defendant is presumed innocent unless and until proven guilty.