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Grand jury indicts URI ex-staffer for fraud
Investigators say Felner took $1.7M
Bridgette Blight
Issue date: 10/23/08 Section: News
10/23/08 - A federal grand jury indicted a former director of the University of Rhode Island School of Education on 10 counts of fraud yesterday.
Robert Felner, 58, who left URI in 2003, is charged with embezzling millions from URI's National Center on Public Education and Social Policy (NCPE) and the University of Louisville in Kentucky.
Felner and Thomas Schroeder, 58, an associate from Illinois, are charged with fraud and conspiracy to commit money laundering. According to the indictment, they had $1.7 million of grant money for URI diverted to personal bank accounts that appeared to be legitimate. Felner and Schroeder then used the money for personal expenses.
The two men also diverted money for the University of Louisville to their personal accounts the indictment alleges. While most of the Louisville money was recovered, investigators have been unable to recover the URI money.
In addition to the funds that Felner and Schroeder allegedly embezzled, the federal government is looking to collect anything purchased with embezzled funds.
Felner is also charged with federal income tax evasion. He did not report the embezzled money on his tax returns from 2002 to 2007. According to the indictment, Felner owes approximately $500,000 in back taxes.
In 2001, investigators allege Schroeder created a phony organization called the National Center on Public Education and Social Policy (NCPEp). He submitted paperwork to designate the organization as a non profit. Schroeder was executive director of NCPEp and Felner was the board chair.
After this, Schroeder created an account for NCPEp at Citizens Bank in Rhode Island, and added Felner to the account.
Felner opened two accounts for NCPEp at Branch Banking and Trust in Louisville, Ky. - a business account and an investment account. Felner used the investment account as his personal investment account, according to the indictment.
When the NCPE, and later, University of Louisville, worked for school districts in Atlanta, Ga., Santa Monica, Calif. and Buffalo, N.Y., Felner and Schroeder persuaded the districts to make the checks out to NCPEp.
Robert Felner, 58, who left URI in 2003, is charged with embezzling millions from URI's National Center on Public Education and Social Policy (NCPE) and the University of Louisville in Kentucky.
Felner and Thomas Schroeder, 58, an associate from Illinois, are charged with fraud and conspiracy to commit money laundering. According to the indictment, they had $1.7 million of grant money for URI diverted to personal bank accounts that appeared to be legitimate. Felner and Schroeder then used the money for personal expenses.
The two men also diverted money for the University of Louisville to their personal accounts the indictment alleges. While most of the Louisville money was recovered, investigators have been unable to recover the URI money.
In addition to the funds that Felner and Schroeder allegedly embezzled, the federal government is looking to collect anything purchased with embezzled funds.
Felner is also charged with federal income tax evasion. He did not report the embezzled money on his tax returns from 2002 to 2007. According to the indictment, Felner owes approximately $500,000 in back taxes.
In 2001, investigators allege Schroeder created a phony organization called the National Center on Public Education and Social Policy (NCPEp). He submitted paperwork to designate the organization as a non profit. Schroeder was executive director of NCPEp and Felner was the board chair.
After this, Schroeder created an account for NCPEp at Citizens Bank in Rhode Island, and added Felner to the account.
Felner opened two accounts for NCPEp at Branch Banking and Trust in Louisville, Ky. - a business account and an investment account. Felner used the investment account as his personal investment account, according to the indictment.
When the NCPE, and later, University of Louisville, worked for school districts in Atlanta, Ga., Santa Monica, Calif. and Buffalo, N.Y., Felner and Schroeder persuaded the districts to make the checks out to NCPEp.
