Chicago school administrators paid over $100k resign over COVID fraud

[September 09, 2023]  By Brendan Clarey | Chalkboard News

The Office of Inspector General for Chicago Public Schools provided an update on a fraud investigation into 14 administrators in the school district who fraudulently applied for federal COVID-19 relief loans.

The report found that many administrators who received loans for between $15,000 and $20,000 from the Paycheck Protection Program received at least six-figure salaries from CPS. Many of them have been fired or have resigned, the report found.

The highest-ranking official subject to the investigation for fraud was Crystal Cooper, according to the Chicago Sun-Times, which also noted that she reported directly to CPS CEO Pedro Martinez. That newspaper also confirmed that she was the “central office administrator” mentioned in the inspector general’s report.
 

The IG report found that at the time she fraudelntly obtained the loan, Cooper had a $200,000 annual salary, which she admitted “misrepresented the income and expenses submitted on the PPP loan application and other documents.”

The report found Cooper had “intentionally inflated” her “self-employment income on the PPP application to qualify for a larger PPP loan.” Cooper admitted that she continued to earn self-employment income and failed to provide CPS with a secondary employment approval form.

Cooper also admitted she “received and spent the PPP loan proceeds, and also admitted to completing and submitting a PPP loan forgiveness application in June 2021 that resulted in the entire balance of their PPP loan being forgiven.”

The report lists other unnamed administrators who took out fraudulent loans. One regional administrator making more than $165,000 per year obtained a loan for over $20,000 by saying they had income of over $100,000 from a business that did not exist.

“The evidence showed that the administrator spent much of these funds on expensive luxury items, as well as a trip to Las Vegas,” the report found.

“Bank records showed that the administrator received the PPP funds in their personal checking account and spent the funds within two months of receiving them, largely on personal travel and luxury items,” it continued.

“Significantly, a loan forgiveness application in the administrator’s name was submitted to their lender a couple of months later,” the report said. “Like most PPP loans, their loan was entirely forgiven.”

One school administrator who made $120,000 a year fraudulently obtained two loans totaling more than $40,000 by claiming that they had earned self-employed income of over $100,000 in 2019. In reality, the amount was more like $7,500 a year.

The Paycheck Protection Program was established at the beginning of the government’s response to the COVID-19 pandemic in March of 2020. As The Center Square reported earlier this year, the PPP and the COVID-19 Economic Injury Disaster Loan program provided assistance to 13.4 million recipients.

That reporting found that a Government Accountability Office analysis revealed 3.7 million of those recipients were flagged for potentially fraudulent activity, which does not indicate fraud was committed.