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On the heels of a public corruption investigation into a school supplies vendor at Detroit Public School that collared 13 principals, federal investigators announced criminal charges against a former district administrator and vendor in a $1.275 million tutoring scam.

Federal prosecutors in Detroit alleged Monday that Carolyn Starkey-Darden obtained at least $1.275 million from DPS through a scheme in which she submitted fraudulent invoices for payment for tutorial services that never were rendered to DPS students.

The scheme, uncovered by the FBI in Detroit, ran from 2005 to 2012 when Starkey-Darden, 69, of Detroit, was president of several companies she established to provide supplemental educational services to eligible students in Michigan.

The companies ran by Starkey-Darden include MI Learning Unlimited, Grants-N-Such, Dara Darden Educational Consultant, Achieving 180, Learning Unlimited Companies.

Starkey-Darden retired from DPS on Oct. 31, 2005. She was the former director of Title 1 compliance at DPS, a job that involved the distribution of federal funds to local school districts.

Starkey-Darden filed articles of organization for one of the companies on July 20, 2005 — before her retirement. Starkey-Darden filed articles of organization for another company Nov. 2, two days after her retirement. Her husband entered into a contract with DPS for tutoring services on Nov. 1.

U. S. Attorney Barbara L. McQuade said Monday that she hopes her work to uncover fraud in public school systems will deter others from stealing funds intended to educate children.

“Ms. Starkey-Darden cheated the students of Detroit Public Schools out of valuable resources by fraudulently billing for her company’s services,” said David P. Gelios, special agent in charge, FBI Detroit Division.

“In fact, Detroit students were cheated twice by this scheme. Students that needed tutoring never received it, and money that could have been spent on other resources was paid to Ms. Starkey-Darden as part of her fraud scheme.”

Starkey-Darden faces up to 10 years in prison and fines of up to $250,000 on the charge of federal program theft.

DPS Transition Manager Steven Rhodes said the district was advised Monday by McQuade of the charges.

“The alleged thievery perpetrated by this individual from 2005-2012 is inexcusable and represents a clear violation of the public trust that has robbed our students and staff of nearly $1.2 million in resources that should have been used for instruction in our classrooms. Everyone invested in the future of Detroit Public Schools should be outraged by the unlawful actions allegedly committed by this individual,” Rhodes said in a statement.

Rhodes said he will continue to work with McQuade, recently reinstated DPS Inspector General Bernadette Kakooza, and employees of the school system to uncover “this unacceptable behavior and bring the full force of the law against those who have the audacity to steal from our children.”

Rhodes said the district will also remain vigilant in the review and applications of its procurement policies and procedures and make changes as appropriate to help prevent further fraud.

Anyone who has a concern about potential fraud or criminal activity in DPS should immediately contact the District’s Fraud Prevention Hotline at (313) 870-3436.

In June 2014, federal prosecutors filed a civil action against multiple bank accounts of Starkey-Darden and her husband, Anthony Darden, after the FBI launched an investigation in 2011 into the couple and three of their businesses.

The companies, Grants-N-Such, MI Learning Unlimited and the Learning Unlimited Companies, were formed to provide after-school tutoring to students who attended schools targeted for improvement on federal progress goals.

In the 39-page civil complaint filed in U.S. District Court, federal prosecutors allege Starkey-Darden ordered the falsification of documents, including inputting false pre-test scores, creating fake individualized learning plans for students, forging parental signatures on monthly attendance records and submitting inflated invoices for unperformed services.

Student progress reports were doctored, FBI agents allege, and Starkey-Darden’s company billed for students who weren’t in class, according to the complaint.

The U.S. Attorney’s Office filed a forfeiture action after seizing more than $282,800 in accounts that belonged to Starkey-Darden, her husband and their companies.

Investigators said Starkey-Darden created her own proxy form for parent signatures, which removed parents from overseeing their children’s attendance, and instructed employees to forge parent signatures of tutored students.

Agents determined that from June 22, 2006, through Oct. 19, 2012, the three companies received $6.17 million in federally subsidized program money.

Agents allege a general rule in the scheme was to give each potential student a fabricated pre-test score that was three to five grades lower than the student’s actual grade that school year.

Gina Balaya, a spokeswoman for McQuade, said the civil forfeiture case has been stayed pending the disposition of the criminal case.

“We expect that the bank accounts seized in the civil case will now be forfeited as part of the criminal case,” Balaya said.

In March, federal prosecutors announced criminal charges against 13 former and current DPS principals and one school supplies vendor in a $2.7 million bribery and kickback scheme at the district.

Ten of the 13 DPS officials, as well as school supply vendor Norman Shy, have entered guilty pleas in the case. All face jail time and must pay restitution to DPS in the case.

JChambers@detroitnews.com

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