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Ex-DPS official pleads guilty in $1.3M fraud case

Jennifer Chambers
The Detroit News

A former Detroit Public School administrator and vendor has pleaded guilty for her role in a $1.275 million scheme in which tutorial services were never provided to students.

Carolyn Starkey-Darden, 70, of Detroit made her plea in U.S. District Court on Wednesday to a charge of federal program theft, a 10-year felony.

Prosecutors allege 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 who attended schools targeted for improvement on federal progress goals.

Starkey-Darden spoke in court, saying she ran a tutoring program for DPS students that served from 600 to 800 students a year.

“I submitted false and exaggerated information, which lead to getting more money than I should have,” she said.

She faces 24 to 30 months in federal prison when sentenced on Oct. 28. Government officials have already seized $980,855.44 from Starkey-Darden in accounts that belonged to her, her husband, Anthony Darden, and their companies.

Assistant U.S. Attorney Dawn Ison said Starkey-Darden must also pay $980,855.44 in restitution, but it will be up to federal officials whether the forfeiture can be applied to restitution or whether Starkey-Darden must pay it.

Gerald Evelyn, her attorney, said Starkey-Darden came to court and took responsibility for her mistakes.

“She is sorry. She has a long distinguished career that will come out. This is a sad conclusion to it,” Evelyn said.

Asked why she took money that did not belong to her, Evelyn said that information will come out at sentencing.

The scheme, uncovered by the FBI in Detroit, ran from 2005 to 2012 when Starkey-Darden 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, and 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, 2005, two days after her retirement. Her husband entered into a contract with DPS for tutoring services on Nov. 1 of that year.

U.S. Attorney Barbara L. McQuade said she hopes to deter fraud by holding accountable those who steal funds from school children.

“It makes a difference when those who are tempted by greed know that someone is watching and there is a price to be paid,” McQuade said.

David P. Gelios, special agent in charge with the FBI Detroit Division, said the guilty plea represents another step toward holding Starkey-Darden responsible for cheating DPS students out of valuable resources

“The message should be clear: Public funds allocated to educate our children must be utilized as intended. To those that would do otherwise, you will be held to account,” Gelios said.

Charges against Starkey-Darden came on the heels of a public corruption investigation into a school supplies vendor at DPS that collared 13 principals in March. Another criminal investigation against a former Education Achievement Authority principal and two co-defendants by the FBI resulted in a grand jury indictment in 2015.

Nearly everyone charged in those cases has entered into plea agreements with prosecutors. They all face prison time and must pay restitution to DPS.

In June 2014, federal prosecutors filed a civil action against multiple bank accounts of Starkey-Darden and her husband 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.

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.

JChambers@detroitnews.com