Detroit -- A federal grand jury Thursday indicted two former Detroit Public Schools employees on fraud conspiracy charges.
Charged are Toni D. Gilbert, 44, of Detroit, a former DPS payroll manager, and Anton V. Carter, 55, of Detroit, a former painter with the district's maintenance department who continued to receive paychecks after he retired and was no longer entitled to receive them, the indictment alleges. Carter was receiving disability checks from DPS at the same time, according to the indictment.
It's alleged the fraud involved more than $400,000 paid out between 2001 and 2005.
"Diverting funds from a federally funded institution to line one's own pockets is a fraud on the taxpaying public. That constitutes a federal crime, but stealing from a public school system is also a crime against our children and the very future of our society," said Assistant U.S. Attorney Terrence Berg, who plans to pursue restitution.
According to the indictment, Gilbert issued periodic payroll checks to Carter for thousands of dollars, and Carter would subsequently deposit cash payments ranging from $2,000 to $4,400 into Gilbert's personal checking account.
Gilbert and Carter could not be reached for comment, but officials said they have been informed of the charges and will turn themselves in. Prosecutors had no record of attorneys representing either of them.
Robert Bobb, Detroit Public Schools emergency financial manager, said the indictment "sends a strong message that theft from Detroit Public Schools will no longer be tolerated."
"It is time for the thieves, it is time for the rats to get out of the Detroit Public School system," he said. "Our goal is they should start running now."
John Bell, the district's inspector general, said Gilbert resigned from the district after she was confronted by the allegations in 2005. Criminal charges weren't pursued at the time.
Bell, a former FBI agent hired to uncover corruption in the district, said he pursued the case after getting a tip. He began working with the FBI, which also received a tip into the case, he said.
Bobb this week said the district has 62 ongoing probes. The investigations are part of an ongoing effort to determine how the district amassed a $306 million deficit and to establish policies to prevent fiscal mismanagement and wrongdoing, he said.
Bobb also announced Thursday that two employees are being suspended without pay, pending a hearing, for suspected theft of 40 computers in 2005. He would not name the employees, but said he's sending a message that waste, fraud and abuse won't be tolerated. Criminal charges are being pursued, he said.
Andrew Arena, special agent in charge of the FBI in Detroit, said his agency will continue to aggressively pursue those who misuse public funds intended for children.
Two longtime building engineers resigned last month after the district confronted them with allegations of taking sick leave while working full-time at other firms, costing the district thousands of dollars, officials said. Bell said the cases were sent to the Wayne County Prosecutor's Office.
Bobb also issued an executive order requiring employees to pick up paychecks or direct-deposit receipts in person and with identification. "I think it is a new day in terms of their efforts to root out corruption," Berg said of the DPS officials.
Assistant U.S. Attorney John Engstrom is handling the payroll fraud case.