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A top CPS official ousted in PPP fraud investigation: schools inspector general

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A top Chicago Public Schools official resigned after the school system’s inspector general found she inflated her income to increase the amount of her COVID-relief loan on a side business she had never reported to CPS.

Crystal Cooper, who as head of school operations reported directly to CEO Pedro Martinez, was the highest-ranking of 14 CPS staffers to leave their jobs as a result of Inspector General Will Fletcher’s investigation of federal Paycheck Protection Program loans they got. 

In a report Wednesday outlining his findings, Fletcher did not name names, but the Chicago Sun-Times confirmed Cooper is the “central office administrator” who was found to have inflated her income for a side business she had never reported to CPS to get a PPP loan of $15,625.

Like most of the country’s 11.4 million PPP loans, hers was forgiven, so she didn’t have to pay it back.

Cooper and 11 others have been barred from working for CPS again after resigning or being fired following Fletcher’s investigation. Two more CPS employees face termination proceedings. 

The 14 were found to have lied on their loan applications about being self-employed, some inventing fake businesses, Fletcher wrote in the 11-page report outlining his findings regarding 780 CPS employees confirmed to have gotten PPP loans. All but one made an annual CPS salary of at least $100,000. Cooper’s CPS pay was $220,000, records show.

Employed by CPS since 2009, Cooper could not be reached for comment. 

“We started with the top earners at CPS and were working our way down,” Fletcher said. “We approached each case like a sophisticated fraud case. I don’t know how many more investigations we’re going to open, but we don’t have the resources to do 700-plus more cases. We will continue to focus on CPS employees in supervisory positions and positions of trust and to alert law enforcement about all of the cases that we find with fraud indicators.” 

He did not say how many of the cases have been referred for criminal investigation.

CPS spokeswoman Samantha Hart said officials will review Fletcher’s recommendation to ask prospective employees about their PPP loans before hiring them. She declined to provide any specifics about the employees, saying, “Personnel records can be requested through the district’s FOIA office.”

The forced resignations and firings at CPS are the latest reckonings for COVID relief programs whose lax rules have made them easy targets for rampant fraud.

Hastily set up in March 2020 as the COVID-19 pandemic shut down the economy, the program was intended to support small businesses by keeping paychecks in their workers’ pockets. But, as inspectors general have been revealing, many public employees also took out loans they weren’t entitled to. 

The clerk of the circuit court of Cook County’s office has uncovered the largest cache of PPP loan fraud among Chicago-area public bodies, ousting dozens of employees who didn’t qualify for loans they applied for. There are ongoing investigations by officials with other government agencies, including the Chicago Police Department, the Cook County courts, the Chicago Housing Authority and the Chicago Park District.

Among the CPS employees Fletcher’s report cited:

  • A regional superintendent making $165,000 also was found to have created a fake business to obtain a PPP loan for the maximum $20,000 available to sole proprietors. The official used some of the loan proceeds on travel including a trip to Las Vegas and on “expensive luxury goods,” Fletcher found. The administrator admitted to investigators having had no business or outside work.  
  • A $140,0000-a-year school administrator falsely claimed to be a chef with $100,000 in income to obtain a $20,000 PPP loan but admitted to investigators never having worked as a chef.
  • Another $100,000-a-year school administrator initially denied receiving any PPP money but changed that story when shown records of the $20,000 loan, then said it was a case of identity theft — but admitted getting and spending the money. 
  • And a $120,000-a-year district administrator whose job involved overseeing federal grants for CPS inflated outside income to fraudulently qualify for a $20,000 PPP loan, Fletcher found. “This misconduct is particularly egregious in that the employee’s role at CPS involved monitoring CPS’s use of public funds,” his report said.

Fletcher’s office also has documented other kinds of PPP abuse, including Chicago charter schools receiving more than $43 million in loans on top of money they got from CPS during the pandemic. And several CPS bus vendors still being paid by CPS with no services provided in return took millions in PPP loans despite laying off workers.

Read the full report: CPS OIG PPP Fraud Significant Activity Report 09.06.23 v2.pdf

Contributing: Nader Issa



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