Manhattan U.S. Attorney Obtains More Than $300,000 In Judgments Against Seven Participants In Scheme To Defraud Federal Government Into Paying For Tutoring Services That Were Never Provided
The Tutoring Program
Preet Bharara, the United States Attorney for the Southern District of New York, announced today that the United States has obtained civil judgments against seven former employees of The Academic Advantage (“Academic Advantage”) in connection with their role in a scheme whereby Academic Advantage fraudulently obtained federal funds for tutoring services that it never provided. During the relevant period, Academic Advantage participated in a federally funded program pursuant to which it was to provide after-school tutoring to students attending underperforming New York City public schools. The civil judgments are against: (1) JASON ISAACS, an Executive Director of Academic Advantage and the senior-most official overseeing its New York City tutoring program; and (2) six individuals who supervised Academic Advantage’s tutoring program at particular New York City public schools — AYESHA YOUNG, ARLETTE HERNANDEZ, RAYVON JONES, TERESA OSORIO, ALICIA MCKAY, and KRISTIN JOYNER. The judgments against ISAACS, YOUNG, HERNANDEZ, JONES, OSORIO, MCKAY, and JOYNER are for $185,000, $33,308, $27,867, $24,951, $23,616, $20,838, and $20,412, respectively. U.S. District Judge Lewis A. Kaplan endorsed some of the judgments on January 14, 2015, and others on January 12, 2015. The above-referenced judgments are in addition to the more than $2.1 million in settlements and judgments that this Office previously obtained against Academic Advantage and three of its other former employees, Edwin Guzman, Luz Mercedes and Nilsa Dalmasi.
Manhattan U.S. Attorney Preet Bharara said: “With these judgments against seven more former employees of Academic Advantage for their roles in a scheme to fraudulently bill the government for tutoring services that were never provided, we continue our push to clean up corruption in the tutoring of our school kids. Today’s judgments should serve as a reminder that when companies engage in fraud, we will seek to hold those responsible accountable.”
According to the Government’s previously filed pleadings against Academic Advantage and the above-named individuals, as well as other documents filed in Manhattan federal court (including a settlement agreement between the Government and ISAACS):
From 2010 through 2012 (“Covered Period”), the New York City Department of Education (“NYCDOE”) received funds from the federal government to pay for Supplemental Educational Services (“SES”), which included after-school tutoring for students attending underperforming public schools. The NYCDOE entered into contracts with private entities to provide SES tutoring to students in New York City public schools. Students were eligible to receive SES tutoring if they met certain criteria, such as attending a school that had been identified as needing improvement or restructuring for at least two years. Private entities contracted by the NYCDOE to provide SES tutoring were required to have each student who attended a tutoring class sign a daily attendance sheet. A representative from the entity was also required to sign each attendance sheet, certifying that SES tutoring had been provided to all of the students whose signatures appeared on the attendance sheet.
During the Covered Period, Academic Advantage contracted with the NYCDOE to provide SES tutoring to students in New York City. Academic Advantage employed individuals whom it referred to as “Site Managers” to supervise its SES program at particular New York City public schools. The Site Managers supervised other employees, known as “Program Aides,” who were also assigned to those schools. Employees with the title “Director” supervised the Site Managers and Program Aides. The Directors reported to an “Executive Director” of Academic Advantage, the highest ranking official overseeing Academic Advantage’s New York City SES program.
During the Covered Period, ISAACS was the Executive Director, YOUNG was a Director, and HERNANDEZ, JONES, OSORIO, MCKAY, and JOYNER were Site Managers.
The Fraudulent Scheme
During the Covered Period, Academic Advantage obtained federal funds by falsely reporting that it had provided SES tutoring to certain students when no SES tutoring had, in fact, been provided to those students. As part of the scheme, Academic Advantage repeatedly submitted to the NYCDOE bills for students who had not actually received any tutoring.
In his settlement agreement with the Government, ISAACS admitted that throughout the Covered Period, Site Managers, Program Aides, and Directors engaged in the following fraudulent conduct in connection with Academic Advantage’s New York City SES program:
- Site Managers routinely forged student signatures on daily student attendance sheets to make it appear that more students had attended Academic Advantage’s SES tutoring classes than had, in fact, attended;
- Site Managers instructed Program Aides to forge student signatures on daily student attendance sheets;
- Program Aides followed the instructions they received from those Site Managers and forged student signatures on daily student attendance sheets;
- Site Managers and Program Aides instructed students to sign daily student attendance sheets for SES tutoring classes that those Site Managers and Program Aides knew the students either had not attended or would not be attending;
- Site Managers routinely signed false certifications on daily student attendance sheets, falsely certifying that after-school tutoring had been provided to all of the students whose purported signatures appeared on the sheets, even though those Site Managers knew that tutoring had not been provided to many of those students; and
- Some Directors knew — and others deliberately ignored or recklessly disregarded — that Site Managers and Program Aides were forging student signatures on daily student attendance sheets or otherwise falsifying student attendance records.
ISAACS further admitted that, during the Covered Period, he had access to information suggesting that Site Managers and/or Program Aides were forging student signatures on daily student attendance sheets and failed to investigate instances of potential forgeries. In addition, ISAACS admitted that Academic Advantage used the above-referenced falsified daily student attendance sheets to prepare invoices that it then submitted in connection with its SES tutoring program. Those invoices ultimately resulted in Academic Advantage being paid federal funds for SES tutoring that it never provided.
In addition to obtaining more than $2.4 million in civil settlements and judgments against Academic Advantage and its former employees, this Office has brought criminal actions against several of those former employees, including Guzman and Mercedes, who have pled guilty to criminal fraud charges.
This is the third coordinated proceeding this Office has pursued against New York City SES providers and their employees for falsifying attendance records and billing for tutoring they did not provide. In 2012 and 2013, this Office filed civil charges against The Princeton Review, Inc. (“Princeton Review”), and civil and criminal charges against several of its former employees. In 2013, this Office filed civil charges against TestQuest, Inc. (“TestQuest”), and civil and criminal charges against several of its former employees. Princeton Review settled the civil charges against it by admitting misconduct and committing to pay the Government up to $10 million. TestQuest settled with the Government for $1.75 million and admissions of wrongdoing. The following former employees of Princeton Review and TestQuest have pled guilty to criminal fraud charges, settled civil fraud charges, or both: Robert Stephen Green, Ana Azocar, Zorayma Azocar, Michael Logan, and Sandra Allen. In addition, Sylvia Brathwaite, a former employee of TestQuest, has had a default judgment entered against her.
Mr. Bharara thanked the U.S. Department of Education Office of the Inspector General for its extraordinary assistance in this case.
The above-referenced civil matters are being handled by the Civil Frauds Unit, and the criminal matters are being handled by the Complex Frauds Unit. Assistant U.S. Attorney Christopher B. Harwood is in charge of the matters.