FORMER AND CURRENT SAN FRANCISCO UNIFIED SCHOOL DISTRICT EMPLOYEES CHARGED IN MULTI-MILLION DOLLAR SCHEME TO WRONGFULLY DIVERT PUBLIC MONEY

FOR IMMEDIATE RELEASE
May 14, 2013

CONTACT: Stephanie Ong Stillman, (415) 553-1167 or (415) 740-5134
Alex Bastian, (415) 553-1931

San Francisco – District Attorney George Gascón announced today the filing of felony charges against former and current San Francisco Unified School District (SFUSD) employees in connection with the diversion of over $15 million dollars in public money into slush fund accounts held at private non-profit organizations, and with the misappropriation of approximately $250,000 for personal use. The defendants are former Associate Superintendent Trish Bascom, former Senior Executive Directors Linda Sue Lovelace and Meyla Fatma Ruwin, former Principal Administrative Analyst Lilian Lamorena Capuli, former Assistant Principal Mychel M. Navales, and Senior Clerk Typist Betty Chuey Wong.

“The public places a great deal of trust in our public schools and its administrators to ensure that students always come first. Unfortunately, during times when the school district faced historic budget cuts, these defendants were misusing public money for their own personal advancement,” said District Attorney George Gascón. “My office will not tolerate corruption and will prosecute these defendants accordingly.”

“The San Francisco Unified School District commends the San Francisco District Attorney’s Office for holding the wrongdoers criminally responsible for the theft of public funds,” said Superintendent Richard A. Carranza. “The District referred concerns to law enforcement immediately upon learning about the allegations and continues to cooperate with law enforcement. We conducted a top to bottom review of the department and its practices and have put in place several measures to prevent any similar wrongdoing in the future.”

According to court documents, five of the defendants colluded over a period of up to ten years to wrongfully divert public money into slush fund accounts hidden at private non-profit organizations. The total amount of funds diverted over the course of the scheme exceeded $15,000,000. Money from these funds was allegedly disbursed at the direction of defendant Bascom and members of her executive team in the Student Support Services Division (Lovelace, Capuli, Ruwin, and Wong) without the knowledge of SFUSD administrators. Bascom and members of her team allegedly created fraudulent documents and submitted them to SFUSD in order to divert grant funds to hidden slush fund accounts held at several community-based organizations (CBOs): Edgewood Center for Children and Families, Bay Area Community Resources, and the San Francisco School Alliance. Bascom, Lovelace, Capuli, and Ruwin are charged with the misappropriation of public money and embezzlement of public money for their roles in this scheme.

Of the $15,000,000 of public money that was wrongfully diverted into slush fund accounts, approximately $250,000 was allegedly misappropriated for personal use by the defendants. This includes $12,700 paid by defendant Lovelace to her significant other, Mychel Navales, as payment for work that she never did for the school district. Bascom also attempted to divert another $55,000 to herself and Lovelace, but was unsuccessful. All six defendants are charged with grand theft, and Bascom is additionally charged with attempted grand theft, related to these acts.

The public money that was allegedly diverted into slush fund accounts, during a time of austerity within the school district, was spent on – among other things – “bonuses” to pay other SFUSD staff members, $400,000 in salaries and benefits to off-the-books personnel, and $200,000 in establishment and maintenance of computer and telephone systems within the Student Support Services Division. Bascom also allegedly transferred $500,000 to a slush fund account held by a prospective employer (ETR Associates), which was considering hiring her after her retirement from SFUSD, and later unsuccessfully attempted to transfer another $1.5 million to the organization.

In addition to the decade-long scheme to divert millions of dollars of public money into slush fund accounts, Bascom, Lovelace, and Capuli allegedly entered into fraudulent contracts and submitted false claims for payments they knew would put money into the same accounts from which they were personally benefitting. According to court documents, by making contracts in which they had a financial interest, Bascom, Capuli, and Lovelace violated conflict-of-interest laws. Furthermore, Bascom and Lovelace allegedly perjured themselves in signing documents required of public officers under the Fair Political Practices Act by failing to report payments they received from the CBOs.

In a separate scheme, defendant Navales is also charged with embezzling $5,800 that was entrusted to her by virtue of her role as an Assistant Principal of Marina Middle School.

This case is the result of a three year investigation conducted by the San Francisco District Attorney Bureau of Investigations, under the supervision of Lieutenant Matt Irvine. Assistant District Attorney Kelly S. Burke is prosecuting the case.

The following charges have been brought against the following defendants:

Trish Bascom

Felony Counts: Misappropriation of Public Money, PC 424(a)(1) (4 counts); Falsification of Accounts, PC 424(a)(3) (4 counts); Fraudulent Alteration of Accounts, PC 424(a)(4) (4 counts); Grand Theft of Public Money, PC 487(a) (5 counts); Attempted Grand Theft of Public Money, PC 664/487(a) (2 counts); Embezzlement of Public Money, PC 504 (5 counts); Contract Made in Official Capacity by Financially Interested Person, Gov’t Code 1090 (13 counts); Forgery, PC 470(d) (21 counts); Offering False or Forged Instruments for Filing, PC 115(a) (15 counts); Presenting False Claims, PC 72 (14 counts); and Perjury, PC 118(a)/129 (7 counts). 94 felony counts in total.

Bail: $350,000

Linda Sue Lovelace

Felony Counts: Misappropriation of Public Money, PC 424(a)(1) (1 count); Falsification of Accounts, PC 424(a)(3) (1 count); Fraudulent Alteration of Accounts, PC 424(a)(4) (1 count); Attempted Loan of Public Money, PC 664/424(a)(2) (1 count); Grand Theft of Public Money, PC 487(a) (5 counts); Embezzlement of Public Money, PC 504 (1 count); Contract Made in Official Capacity by Financially Interested Person, Gov’t Code 1090 (9 counts); Forgery, PC 470(d) (14 counts); Offering False or Forged Instruments for Filing, PC 115(a) (14 counts); Presenting False Claims, PC 72 (8 counts); and Perjury, PC 118(a)/129 (1 count). 56 felony counts in total.

Bail: $150,000



Lilian Lamorena Capuli

Felony Counts: Misappropriation of Public Money, PC 424(a)(1) (3 counts); Falsification of Accounts, PC 424(a)(3) (3 counts); Fraudulent Alteration of Accounts, PC 424(a)(4) (3 counts); Grand Theft of Public Money, PC 487(a) (3 counts); Embezzlement of Public Money, PC 504 (4 counts); Contract Made in Official Capacity by Financially Interested Person, Gov’t Code 1090 (1 count); Forgery, PC 470(d) (3 counts); Offering False or Forged Instruments for Filing, PC 115(a) (4 counts); Presenting False Claims, PC 72 (3 counts). 27 felony counts in total.

Bail: 90,000

Meyla Fatma Ruwin

Felony Counts: Misappropriation of Public Money, PC 424(a)(1) (2 counts); Falsification of Accounts, PC 424(a)(3) (2 counts); Fraudulent Alteration of Accounts, PC 424(a)(4) (2 counts); Grand Theft of Public Money, PC 487(a) (1 count); Embezzlement of Public Money, PC 504 (3 counts); Forgery, PC 470(d) (2 counts); Offering False or Forged Instruments for Filing, PC 115(a) (2 counts); Presenting False Claims, PC 72 (2 counts). 16 felony counts in total.

Bail: $50,000

Betty Chuey Wong

Felony Counts: Grand Theft of Public Money, PC 487(a) (1 count); Embezzlement of Public Money, PC 504 (2 counts). 3 felony counts in total.

Bail: $10,000

Mychel M. Navales

Felony Counts: Grand Theft of Public Money, PC 487(a) (4 counts); Embezzlement of Public Money, PC 504 (1 count); Forgery, PC 470(d) (4 counts). 9 felony counts in total.

Bail: $15,000

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