no one saw any signs

Fake special ed vendors stole $1.5 million from city, probe finds

Two men used shell companies and forged signatures to charge the Department of Education for sign language services that students didn’t need, an investigation found. The fraud ran for more than two school years and cost the city at least $1.5 million.

The brazen scheme involved claiming payment for services to students who were not enrolled in city schools and, in some cases, offered as proof that services had been provided the forged signatures of people who were retired or even deceased. In one instance, the city paid more than $100,000 over an eight-month period for a student who had left the school system a decade earlier. In another, the city handed out $187,200 in payments that were authorized by someone who had died “several years ago.”

Today, authorities arrested one of the men involved, Nelson Ruiz, while his collaborator, William Cruz, remains at large, said a spokeswoman for the Special Commissioner of Investigation, which conducted the probe.

Special education costs have skyrocketed in recent years and though the sign language fraud doesn’t begin to explain the amount of money that pays for special education servies, it suggests that the ways outside providers  are paid is highly-vulnerable to fraud.

Last summer, the education department created a unit specifically to root out fraud in special education spending and officials said today that it was the work of this unit that eventually prompted the investigation.

Investigators opened the case in February after a department official questioned the authenticity of billing documents that had been submitted by a sign language company called Bilingual Words in Motion.

Eventually, investigators found that a total of five companies, all owned by either Ruiz or Cruz, were swindling the department of payments for sign language services. The companies used the names of 10 students and listed them on forged disability forms to secure payments for services that not only weren’t being provided, but weren’t even needed by the students.

The fraud was apparently able to take place because of shortcomings in the office of Non-Public Schools Payables, which pays independent vendors to provide services to students with disabilities that the department can’t otherwise offer.

Before it authorizes payments, the office first reviews a document — called a ‘related service authorization form — that gives permission to parents to obtain services from an approved independent vendor. These forms included signatures from both parents and education department employees, which Ruiz and Cruz were forging.

Investigators found many of these forms were also outdated, contained wrong addresses, and were issued out of the wrong school district. But when office employees reviewed them, they didn’t pick up on the discrepancies. And  the office also doesn’t have access to a student’s individualized education plan, so they were unable to verify if the student should have been receiving the outside services.

If they had been able to, they would have found some stark discrepancies. Of the ten students detailed in the investigation, most of them didn’t need sign language instruction from an outside vendor. Some didn’t have hearing disabilities at all and three of them were no longer part of the city school system.

Cruz and Ruiz were paid a total of $1,524,160 during the 2010-2011 and 2011-2012 school years, and while the scope of the investigation only went back to 2010, the pair’s theft could have been closer to $4 million. The investigators’ report says that some of the same companies were paid an additional $2.3 million by the Department of Education prior to the 2010-2011 school year.

Ruiz and Cruz technically owned all five of the companies between them, but when investigators began checking up on the companies, there was little evidence that any business was being conducted. None of the companies had offices and their addresses usually linked back to standalone mailboxes. An address for one of the companies, Related Services Solutions, matched Ruiz’s residence in Pennsylvania.

Investigators also looked into the companies’ bank records and found none of them did any business outside of the combined $1.5 million that the city was paying to them.

City officials downplayed the findings from the investigation and said that the education department had already put in place controls to improve how vendors are vetted and how its invoice system is monitors. In a statement, Chancellor Dennis Walcott lauded education department employees who worked to uncover the fraud.

“I want to thank the employees who have been working so diligently over the last year to root out fraud and ensure our neediest students get the services they deserve,” Walcott said. “We will not  allow corrupt businesses to defraud our system and prey on our children.”

The investigation is ongoing and there are still many unanswered questions about how Ruiz and Cruz could had carried out their fraud.

For instance, Cruz apparently used an alias — Bill Chacon — to serve as a special education advocate in impartial hearings. Cruz attended hearings for five of the students who are listed in the report, but it’s unclear how they found the students to claim payments for. It’s even  some of those students did not have any disability. Principals of some of the students who had hearing disabilities told investigators that their services were provided in the school.

The investigation has been handed over to Preet Bharara, U.S. Attorney for the Southern District of New York.

Ruiz and Cruz- SCI Report 8 17 12 (1)

Behind the brawl

Three things to know about the Tennessee school behind this week’s graduation brawl

PHOTO: Arlington Community Schools
Arlington High School is a 2,000-plus-student school in suburban Shelby County in southwest Tennessee.

Arlington High School is considered the crown jewel of a 3-year-old district in suburban Shelby County, even as its school community deals with the unwelcome attention of several viral videos showing a fight that broke out among adults attending its graduation ceremony.

The brawl, which reportedly began with a dispute over saved seats, detracted from Tuesday’s pomp and circumstance and the more than $30 million in scholarships earned by the school’s Class of 2017. No students were involved.

“It was unfortunate that a couple of adults in the audience exhibited the behavior they did prior to the ceremony beginning and thus has caused a distraction from the celebration of our students’ accomplishments,” Arlington Community Schools Superintendent Tammy Mason said in a statement.

Here are three things to know about the 13-year-old school in northwest Shelby County.

With more than 2,000 students, Arlington is one of the largest high schools in Shelby County and is part of a relatively new district.

It’s the pride of a suburban municipality that is one of six that seceded from Shelby County Schools in 2014 following the merger of the city and county districts the year before. (School district secessions are a national trend, usually of predominantly white communities leaving predominantly black urban school systems.) More than 70 percent of Arlington’s students are white, and 6 percent are considered economically disadvantaged — in stark contrast to the Memphis district where less than 8 percent are white, and almost 60 percent are considered economically disadvantaged.

The school’s graduation rate is high … and climbing.

Last year, after adding interventions for struggling students, the school’s graduation rate jumped a full point to more than 96 percent. Its students taking the ACT college entrance exam scored an average composite of 22.5 out of a possible 36, higher than the state average of 19.9. But only a fifth scored proficient or advanced in math and a third in English language arts during 2015-16, the last school year for which scores are available and a transition year for Tennessee under a new test.

PHOTO: Caroline Bauman
Education Commissioner Candice McQueen visits with students at Arlington High School during a 2016 tour.

The school was in the news last August when Tennessee Education Commissioner Candice McQueen visited its campus.

The commissioner spoke with students there to kick off her statewide listening tour that’s focused on ways to get students ready for college and career. McQueen highlighted the school’s extracurricular activities and students’  opportunities to intern for or shadow local professionals. She also complimented Arlington for having an engaged education community. 

poster campaign

How one Memphis student is elevating the conversation about school discipline

PHOTO: Laura Faith Kebede
Posters created by junior Janiya Douglas have amplified student voices about the culture of White Station High School in Memphis.

Now in her third year of attending a premier public high school in Memphis, Janiya Douglas says she’s observed discipline being handed out unevenly to her classmates, depending on whether they are on the college preparatory track.

PHOTO: Laura Faith Kebede
From left: Janiya Douglas and Michal Mckay are student leaders in Bridge Builders CHANGE program.

“We’re heavily divided in an academic hierarchy,” said Janiya, a junior in the optional program for high-achieving students at White Station High School. “It’s obvious students are treated differently if they are in traditional classes.”

Janiya also has observed racial disparities in how students are disciplined, and the state’s data backs that up. White Station students who are black or Hispanic are suspended at significantly higher rates than students who are white.

Frustrated by what she’s seen, Janiya took her concerns last Friday to the hallways of White Station and hung 14 posters to declare that “our school doesn’t treat everybody equally.”

By Monday morning, the posters were gone — removed by school administrators because Janiya did not get prior approval — but not before other students shared images of some of the messages on social media.

Now, Janiya is seeing some fruits of her activism, spawned by her participation in Bridge Builders CHANGE, a student leadership program offered by a local nonprofit organization.

In the last week, she’s met with Principal David Mansfield, a school counselor and a district discipline specialist to discuss her concerns. She’s encouraged that someone is listening, and hopes wider conversations will follow.

The discussions also are bringing attention to an online petition by the education justice arm of Bridge Builders calling for suspension alternatives across schools in Memphis.

White Station often is cited as one of the jewels of Shelby County Schools, a district wrought with academic challenges. The East Memphis school is partially optional, meaning some students test into the college prep program from across the county.

But Janiya and some of her classmates say they also see an academically and racially segregated school where students zoned to the traditional program are looked down upon by teachers. Those students often get harsher punishments, they say, than their optional program counterparts for the same actions.

“Our school doesn’t treat everybody equally. A lot of groups aren’t treated equally in our school system,” junior Tyra Akoto said in a quote featured on one poster.

“If we get wrong with a teacher, they’ll probably write us up. But if a white student was to do it, they’ll just play it off or something like that,” said Kelsey Brown, another junior, also quoted in the poster campaign.

A district spokeswoman did not respond to questions about disciplinary issues raised by the posters, but offered a statement about their removal from the school’s walls.

White Station is known for “enabling student voice and allowing students to express their opinions in various ways,” the statement reads. “However, there are protocols in place that must be followed before placing signs, posters, or other messages on school property. Schools administrators will always work with students to ensure they feel their voices are heard.”

PHOTO: @edj.youth/Instagram
Members of the education justice arm of the Bridge Builders CHANGE program

To create the posters, Janiya interviewed about two dozen students and had been learning about about school discipline disparities as part of the Bridge Builders CHANGE program.

State discipline data does not differentiate academic subgroups in optional schools. But white students in Shelby County Schools are more likely to be in an optional school program and less likely to be suspended. And statewide in 2014-15, black students were more than five times as likely as white students to be suspended.

White Station reflects those same disparities. About 28 percent of black boys and 19 percent of black girls were suspended that same year — significantly higher than the school’s overall suspension rate of 14 percent. About 17 percent of Hispanic boys and 7 percent of Hispanic girls were suspended. By comparison, 9 percent of white boys and 2 percent of white girls were suspended.

Shelby County Schools has been working to overhaul its disciplinary practices to move from punitive practices to a “restorative justice” approach — a transition that is not as widespread as officials would like, according to Gina True, one of four specialists implementing a behavior system called Positive Behavior Interventions and Supports, or PBIS.

“The whole goal is to not get them suspended, because we want to educate them,” said True, who met this week with Janiya and several other students from Bridge Builders. “When students are cared for emotionally, they perform better academically. As counselors, that’s what we’ve been saying for years.”

Janiya acknowledges that she didn’t follow her school’s policy last week when hanging posters without permission at White Station. But she thinks her action has been a catalyst for hard conversations that need to happen. And she hopes the discussions will include more student input from her school — and across the district.

“Those most affected by the issues should always be a part of the solution,” she said.

Correction: April 10, 2017: A previous version of this story said Janiya put up 50 posters at her school. She designed 50 but actually posted only 14.