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Press Release

Athens City School Administrator Found Guilty in Virtual Education Fraud Scheme

For Immediate Release
U.S. Attorney's Office, Middle District of Alabama

           Montgomery, Ala. –    On March 18, 2022, Athens City Schools administrator, William Richard (“Rick”) Carter, Jr., 46, was convicted for his role in a scheme to defraud the Alabama State Department of Education (ALSDE), announced Acting United States Attorney Alice S. LaCour, FBI Special Agent in Charge Johnnie Sharp, Jr., and Special Agent in Charge Reginald J. France of the U.S. Department of Education Office of Inspector General’s Southeastern Regional Office.

           According to court records and evidence presented at trial, Carter, conspired with other school officials to fraudulently enroll students in public virtual schools and then falsely reported those students to the Alabama State Department of Education in order to illegally receive additional education funding. Carter’s co-conspirators include former superintendent of the Athens City Schools district Dr. William L. (“Trey”) Holladay, III; David Webb Tutt, of Uniontown, Alabama; Gregory (“Greg”) Earl Corkren, of Tuscaloosa, Alabama; and former superintendent of the Limestone County School district Thomas Michael Sisk.

           During Carter’s four-week trial, the jury heard evidence that he and his co-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 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. Multiple private school parents and former students testified that during the school years that the scheme occurred, 2016-2017 and 2017-2018, they had little to no connection with the public-school districts in which they were supposedly enrolled. The parents continued to pay private school tuition and the students continued to attend the brick-and-mortar private schools each day, receiving instruction from teachers at those private schools.

           There was also testimony provided about a meeting with the ALSDE in March of 2016 where the state notified Athens City School officials that private school students were being erroneously listed as public-school enrollees and directed the Athens School officials to correct the problem. However, evidence presented at trial showed that instead of following that guidance, Carter and his co-conspirators took steps to conceal and continue their scheme. For example, they created fake report cards, manufactured false addresses for the students of the private schools who lived outside of Alabama, and submitted falsified course completion reports to the state department of education. When shown the fake report cards and completion reports during the trial, the parents and former students testified that they had never seen them before and did not know any of the teachers listed on them.

           The submission of this false documentation allowed payments to continue from Alabama’s Education Trust Fund to the Athens City Schools district and the Limestone County Schools district. Carter and his co-conspirators then received, for their own personal use, portions of the state funding. They skimmed the state money through direct cash payments and payments to third-party contractors owned by the various co-conspirators. During the course of the scheme, the total potential loss was approximately $10 million.

            The jury found Carter guilty on one count of conspiracy to commit wire fraud, four counts of wire fraud, and two counts of aggravated identity theft. At some upcoming date, Carter will be sentenced. He faces a maximum sentence of 20 years’ imprisonment, as well as substantial monetary penalties and restitution. He is also facing a mandatory consecutive two-year sentence on each count of aggravated identity theft. Co-defendants William L. Holladay, III, Gregory Earl Corkren, David Webb Tutt, and Thomas Michael Sisk, previously pleaded guilty to conspiracy to defraud the government. Gregory Corkren also pleaded guilty to aggravated identity theft.

           “We trust every educator to make teaching our children the top priority,” said Alice S. LaCour, acting United States Attorney for this case. “In this case, Mr. Carter violated that trust and put profit ahead of the well-being of students. I am proud of the work of the law enforcement agents who spent countless hours uncovering the disheartening fraud perpetuated by Mr. Carter and his co-conspirators.”

           “Today's verdict is the result of hard investigative work by my office and our partners,” stated FBI Special Agent in Charge Johnnie Sharp. “The FBI will continue to work to hold accountable public officials who fail the citizens of their community by misusing their positions of trust for personal gain.”

           “Today’s action shows that this former school official not only knowingly and willfully abused his position of trust for personal gain, but did so at the expense of the educational development of children. That is unacceptable," said USDOE-OIG Special Agent in Charge Reginald J. France. “Deservedly, Mr. Carter will be held accountable for cheating Alabama students and taxpayers."

           “Integrity and trust are character traits common to teachers and administrators across Alabama,” stated Alabama State Department of Education Superintendent Dr. Eric G. Mackey. “As much as this case saddens educators everywhere, the State Department of Education is proud to have worked with the U.S Attorney’s Office, U.S. Department of Education Office of Inspector General (OIG), Federal Bureau of Investigation (FBI), and Alabama Attorney General’s Office to bring this fraud to light. When the Board selected me as Superintendent, I made it clear that core tenants of my administration would be integrity and transparency. The U.S. Attorney, FBI, and OIG, like us, are determined to make sure every taxpayer dollar is accounted for and every dollar intended for the classroom is spent on the classroom. We appreciate their hard work and dedication throughout the investigation and adjudication.”

           This case was investigated by the Federal Bureau of Investigation (FBI) and the United States Department of Education’s Office of Inspector General, with assistance from the Alabama Attorney General’s Office. Assistant United States Attorneys Jonathan S. Ross, Alice S. LaCour, and Brett J. Talley prosecuted the case.

Updated March 21, 2022

Public Corruption