Former charter school officials plead guilty for misusing funds

Two former charter school administrators pleaded guilty in U.S. District Court yesterday to charges of conspiracy and altering documents in 2006 to cover up their use of more than $14,000 in taxpayer money for personal expenses, including restaurants, gasoline, travel and alcohol.

Martha Russell, the founder and former chief executive of the Raising Horizons Quest Charter School, and her sister, Viola J. Bush, the former finance officer, were indicted by a federal grand jury in April for falsifying credit-card statements to obstruct a Philadelphia School District audit of the school.

The case predates a widening federal criminal probe of city charter schools that was launched in the spring after The Inquirer disclosed that the district's inspector general was investigating allegations of misuse of funds, nepotism, and conflicts of interest at Philadelphia Academy Charter School in the Northeast.

The inspector general began investigating Raising Horizons Quest and ordered an audit in 2006 after former employees alleged that public funds were being misappropriated at the charter elementary school, which has campuses in Northeast and West Philadelphia.

The district forwarded its findings to the U.S. Department of Education to investigate.

The school - now known as the Global Leadership Academy - receives more than $100,000 in federal funds each year. In all, the charter received $4.9 million from the school district and state and federal governments in 2005-06, according to its nonprofit tax filing.

In June 2006, the district forced all but one of the charter's board members to resign, along with Russell and Bush. A new administrative team was brought in to take over the school, which Russell had founded in 2000. The school currently has 525 students from kindergarten through eighth grade.

The grand jury charged that Russell and Bush took billing statements to Russell's home in Blue Bell and altered them by removing personal expenses and inserting "purported charges for business-related expenses."

Russell then faxed the doctored documents to a coworker at the school "and instructed her to obscure the fax line on the altered statements and provide them to the Philadelphia School District auditor," the grand jury said.

Russell, 53, and Bush, 50, of Lansdale, initially pleaded not guilty to the felony charges.

But in a hearing before U.S. District Judge Petrese B. Tucker yesterday, the sisters changed their pleas and admitted committing the crimes.

Assistant U.S. Attorney Michelle Morgan-Kelly said the evidence showed the women had misused more than $14,000 on personal expenses and then conspired to alter the documents to cover it up.

In their plea agreement, Russell and Bush pledged to make restitution of $23,021. Bush also promised to return an additional $1,262.

The women face possible maximum sentences of 25 years in prison, although federal sentencing guidelines suggest a range of 10 to 16 months. They also face three years of supervision and $500,000 fines.

Tucker set their sentencing for Jan. 26.

Both Russell and Bush declined to comment.

Russell and Bush are not the first Philadelphia charter administrators charged with federal crimes.

Curtis Andrews, chief executive of the now-defunct Center for Economics and Law Charter School in Southwest Philadelphia, was sentenced in 2006 to 33 months in federal prison for defrauding the school district of $206,554 by devising a scheme to inflate student enrollment. He agreed to make full restitution as part of his guilty plea.