Daytonians indicted in $1.8M Cleveland charter school theft

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The Dayton Daily News has broken several important stories in recent years about charter schools. These institutions receive millions in tax dollars every year and we are committed to keeping an eye on public money. We will continue to monitor the fiscal practices and performance of Ohio charter schools and the people who manage them.

The former operator of a group of Dayton charter schools, along with his wife, brother, business associates and others, was indicted Wednesday for stealing $1.8 million from a charter school in Cleveland, court documents show.

In all, 10 people — four from Dayton — and 13 companies were charged with crimes including money laundering, theft, racketeering and unlawful interest in a public contract, according to the Cuyahoga County Prosecutor’s Office.

The group, mostly people who managed and operated the Cleveland Academy for Scholarship, Technology and Leadership (CASTLE), is accused of stealing a total of $1.8 million from the school between 2004 and 2010.

Among those indicted was William Peterson, 43, of Dayton. Peterson is a past CEO of four Dayton charter schools, including Arise Academy and the Colin Powell Leadership Academy. He graduated in 1988 from the University of Dayton, where he played football alongside Ohio Secretary of State Jon Husted.

Peterson, who is also a former CEO and co-founder of CASTLE, is accused of stealing about $858,000 from the school and laundering it through companies called Educational Management Alliance, Kids 2000, Leadership Training Institute, Cross Tech EduServe and 2K2 Technologies, prosecutors said.

Former CASTLE board members, including Peterson, awarded contracts to their own companies that only existed on paper, said Ed Kraus, a Cuyahoga County assistant prosecutor.

“They were board members while at the same time they were authorizing payments to their own shell companies that they created just to steal money from the school,” Kraus said.

Peterson could not be reached for comment. A phone number associated with him in a public records database was disconnected.

Also charged:

  • Peterson's wife, Diana Peterson, 44, of Dayton, who co-owned Kids 2000. Together, the Petersons laundered and stole $106,625 from CASTLE, prosecutors said.
  • Peterson's business partner, Dennis Stewart, 65, of Dayton. Stewart laundered and stole $367,344 from CASTLE through companies he co-owned with Peterson, prosecutors said.
  • Dale Qualls, 51, of Dayton. Qualls was the owner of Qualls Auto Center, which sold a school bus to CASTLE for about $20,000, prosecutors said. He then gave a $5,000 kickback to Peterson, prosecutors said.
  • Thomas Unik, III, 52, of Cleveland. Unik was a CASTLE board chairman and partial owner of a company through which CASTLE leased its facilities. CASTLE overpaid Unik's company by $478,785 with no evidence of board approval, prosecutors said.
  • Stanley Jackson, 38, of South Euclid, a CASTLE board member with an ownership stake in a company called Comprehensive Consulting and two other companies. Jackson signed $200,000 worth of checks to those three companies without evidence that the school got anything in return, prosecutors said.
  • Claudette Williams, 34, of Cleveland, the president of Comprehensive Consulting.
  • Rolando Peterson, 41, of Shaker Heights, William Peterson's brother and another former CASTLE CEO. He is accused of stealing $8,829 from the school.
  • David Lembo, 45, of Solon, who was the owner of a company that negotiated a lease between CASTLE and Peterson. Lembo gave $6,425 worth of kickbacks to Peterson, prosecutors said.

Also charged was Carl Shye, 58, of New Albany, who was the treasurer of CASTLE from July 2006 through June 2009. Prosecutors allege he laundered and stole $144,905 from CASTLE.

Shye, who previously handled the finances of more than a dozen former charter schools across Ohio, was sentenced to more than two years in federal prison last October following an investigation by the FBI that found he stole more than $470,000 from four different schools, including three in Dayton.

The investigation of CASTLE began in March 2010, when a school attorney informed the Ohio Auditor’s Office in a letter that Jackson had a hidden ownership interest in Comprehensive Consulting, a company that received $151,000 from the school for consulting services that were never provided.

State auditors eventually found that $1.3 million was misspent in total, and ordered William Peterson, Stewart, Jackson, Shye and Rolando Peterson to pay it back.

“The rules are clear — you can’t be on both sides of the transaction,” Ohio Auditor Dave Yost said in a written statement last week. “In our schools, the top priority should be the children, not the pocketbooks of the administrators.”

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