Tulsa school district to recoup money from Travelers’ policy for alleged fraud
Tulsa World (OK)
Tulsa Public Schools stands to recoup hundreds of thousands of dollars lost to alleged embezzlement and misappropriation by a former senior administrator, newly obtained public records indicate.
The state's largest school district has received new email communications in January that it could soon receive as much as $470,000 from its claim against its Travelers Insurance fidelity and crime policy that protects against losses caused by employees' fraudulent or dishonest actions.
Claim documents and other emails obtained from TPS by the Tulsa World through public records requests reveal many new details about how TPS' then-chief talent and equity officer's freewheeling use of taxpayer and donor funds on employee bonuses triggered multiple investigations that continue to this day.
Newly hired Superintendent Ebony Johnson said that from what she has learned about the case since taking the helm, she believes that Devin Fletcher, her predecessor Deborah Gist's Cabinet member, had "far too much leeway" to direct the payment of school district funds and to solicit and obtain outside donor support through the nonprofit Foundation for Tulsa Schools.
And Johnson said a handful of Fletcher's human resources department employees "showed poor judgment" in accepting $42,000 total in bonus payments he directed their way from a vendor company in addition to their district salaries.
"We have put serious new internal controls in place and are now requiring signature confirmation that employees have received the district policy book, which clearly states you cannot accept payments from a district vendor," Johnson said.
Public records and interviews with TPS officials show the cascade of revelations and discoveries that all added up to far greater losses than the $20,000 TPS initially publicized— as well as an additional $330,000 in suspected losses of donor funds meant for TPS from the Foundation for Tulsa Schools.
An immediate investigation reportedly was triggered June 8 or 9, 2022, upon the revelation that under Fletcher's direction in late 2020 and 2021, a handful of employees in the district's talent management office had violated district policy in accepting payments from a vendor company called Snickelbox LLC.
Within 2½ weeks, more questionable conduct by Fletcher reportedly was uncovered and he was forced out at TPS. He resigned June 27.
Documents reviewed by the Tulsa World show that the second, final blow was the discovery that Fletcher had gone rogue on a contract with a new human resources vendor called Fountain and bilked the district out of $17,280.
The insurance claim submitted by TPS states that Fletcher circumvented the district's in-house legal office, as well as the elected school board, and personally signed a $32,500 contract with Fountain.
Then he paid Fountain with his own personal credit card and got the other vendor, Snickelbox, to cover the expense — but he submitted an apparently falsified credit card statement in order to obtain an excessive reimbursement totaling $49,780.
District officials reportedly took what they knew to local law enforcement officials June 26 and, a few days later, announced to the public that there was a problem.
Gov. Kevin Stitt was quick to compel the Oklahoma State Auditor and Inspector's Office to perform a forensic audit, but that work is still ongoing; no findings have been reported to the public.
Email records from TPS show that Tulsa police detectives were initially investigating the matter, but by September 2022, the Federal Bureau of Investigation took the lead in the case.
Fletcher pleaded guilty in October 2023 to a $604,000 wire fraud conspiracy involving a combination of taxpayer dollars and donated grant funds and allegations that Fletcher schemed to benefit himself and two of his family members through the use of a phony human resources consulting company owned by his sister S. Monee Kemp, called Talented 10th.
"Suspicions regarding (Talented 10th) originally arose out of an investigation of a different vendor — Snickelbox LLC — conducted by the district's outside counsel at the superintendent's direction," states TPS' insurance claim.
The document cites federal prosecutors' forfeiture filings in federal court in stating: "Once she was an approved district vendor, Kemp billed and received district funds when, in fact, she provided no services to the district and had no business relating to such services" and "money she received from the district was shared with Fletcher and their mother."
In May 2023, public court records revealed FBI agents seized a combined $216,105.95 from two bank accounts listed under the relatives' names. TPS General Counsel Jana Burk said the district stands to recoup those funds, as well, but federal officials have given the school district no timeline as to when.
Neither of the relatives, identified in the same document as Fletcher's sister Kemp and their mother, has been charged with any crime.
Fletcher, who reportedly was pursuing career aspirations of becoming a superintendent himself, once simultaneously held the two most demanding oversight responsibilities in TPS: human resources and academics.
Now, the plea deal with federal prosecutors would make him a felon, and he's facing up to 20 years in prison.
Burk has the most firsthand knowledge of the case because she initiated the internal investigation and has served as the district's point person with law enforcement and insurance company investigators, as well as state auditors.
She said Fletcher's actions "disgust" her and his other former colleagues because "he was presenting himself as a professional and someone who was absolutely dedicated to the work of the district when in reality he was — for several years — stealing hundreds of thousands of dollars meant to benefit Tulsa's kids."
"He perpetrated his crimes through extensive deceit and lies," Burk said. "He broke the trust of his co-workers, our teachers, the district's board members, and the public and our civic donors, and wielded his organizational power for his personal gain. He's wreaked havoc and anguish in the district for many people."
Bonus pay and cash gifts
Outgoing Chief Financial Officer Jorge Robles told the Tulsa World the entire saga was sparked by one recipient's offhand remark about a Snickelbox bonus.
Burk "immediately reported the matter to the district's superintendent, who agreed that outside counsel should investigate the matter given the significance of the concerns," the district reported to Travelers Insurance.
The outside counsel was Brian Kuester, a former state and federal prosecutor who was then employed at TPS' contract law firm, Rosenstein, Fist & Ringold.
The TPS insurance claim reveals that Kuester interviewed Fletcher and the owner of Snickelbox, who provided him records during the initial days of the investigation that showed five employees had accepted $42,000 total in bonus payments from the vendor.
Additionally, Kuester reportedly learned directly from the two figures involved that Fletcher had been reimbursed $3,922 by Snickelbox for stuffing envelopes with $100 cash gifts to hand out to talent management employees at the holidays in 2020.
Burk told the Tulsa World there are no records to back up Fletcher's holiday gift claims or whether any employees actually received the cash.
Now-Superintendent Johnson said that, in her mind, the fact that those five employees paid income taxes on the bonuses demonstrated that they believed those were legitimate earnings for duties performed.
"It was poor judgment not to question payment from outside the district; however, look at the circumstances. You have your immediate boss, at a chief level, saying, 'You went above and beyond and earned this money.' Then you have the fact that they all paid taxes, and all of those still currently employed here are making it right by repaying the money," Johnson said. "I stand strong around those employees that the lesson has been learned."
Four of the employees were paid $2,500 to $6,500 each, and email communications between district administrators and the employees or attorneys of the employees show they were told the bonuses were payment for taking on additional duties because of staffing shortages.
All four have either repaid or are in the process of repaying TPS the gross amount they were paid by Snickelbox, with $12,300 repaid to date of the $17,000 total, Burk said.
One of those four voluntarily left the district last summer, Burk said.
A fifth, now-former employee of the Talent Management Department, Kayla Robinson, reportedly negotiated a $25,000 bonus in September 2020 "to compensate her for a salary reduction she received associated with a position change."
Those negotiations were with Fletcher and Deputy Superintendent Paula Shannon, but the insurance claim states that Shannon was unaware that Fletcher had arranged for Robinson to receive the bonus payment from Snickelbox, the outside vendor.
Email records show Robinson had been retired for months by the time the vendor-funded bonus payments were discovered in the summer of 2022; through an attorney, she has rebuffed all demands by TPS for repayment of the $25,000.
Fletcher's use of Snickelbox
Snickelbox LLC was the vendor company TPS has claimed Fletcher used to facilitate roughly $92,000 in unrelated charges, but sussing out questionable invoices from multiple years of legitimate work by that company has been complicated, TPS explained in the insurance claim.
It had six-figure contracts for the 2020-21, 2021-22 and 2022-23 school years to work with the TPS human resources office on its efforts to attract and retain teachers amid a chronic teacher shortage.
Its last contract with the district was terminated in July 2022 after Fletcher's departure. The owner, Lauren O'Mara, has not been charged with any crime.
TPS' insurance claim says school district emails show that O'Mara was aware of the actual, lower price of the Fountain contract and that a $113,000 Snickelbox invoice to TPS in July 2020 was nearly $93,000 more that it should have been for stipends for teacher trainees.
"This is because Fletcher and O'Mara were told in emails dated June 25 and July 3, 2020, that there were only 17 teacher trainees (later 16) to be paid at $1,260 each, but Snickelbox submitted — and Fletcher approved — an invoice charging the district 'at cost' for 50 trainees at $2,260 each," TPS stated in its insurance claim.
Documents and interviews with TPS administrators both indicate that O'Mara was a regular sight and trusted individual at district offices during the years her business had a contract with TPS.
"You see this person," Shannon said. "They're actually a consultant. You know that, but they're embedded. You work with them every day, and they're directing work. … This person says, 'Hey, I'm following up. Chief Fletcher said we're going to make sure that you're compensated for all this additional work you're doing. Just fill this out.' And it's easy, in hindsight, to say, 'I should have known better.'"
One of the bonus recipients wrote in a summer 2023 email to district administrators outlining the terms of their repayment plan: "Any payments provided to me were for extra work that I was assigned by the district. However, I do understand that Chief Fletcher misled me with the validity of the payment from Snickelbox and that it was in violation of district policy. I accepted the payment in good faith for the extra duties I was assigned and properly reported and paid taxes on the payments from Snickelbox."
Possible associates paid
Tulsa police detectives and the State Auditor's Office each raised red flags to TPS about other vendors, both of whom TPS has since identified as possible associates of Fletcher's from Denver, where he lived and worked prior to relocating to Tulsa.
The Tulsa Police Department led TPS to look into a $21,000 payment for one month of work on a "salary estimator" spreadsheet in February 2022 by Kord Golliher of KAG Capital LLC. An investigator for the State Auditor's Office flagged $41,400 in pay for Isaac Domingue for a two-month period for "support and management of classified and confidential data collection" related to COVID-19 vaccinations for TPS employees.
The insurance claim states that after extensive records searches and staff interviews, TPS questions whether any work at all was performed by Golliher and whether Domingue produced anything beyond a single report that took a member of the State Auditor's Office just 90 minutes to replicate.
"While the U.S. Attorney's Office did not include all amounts paid to these two vendors within the plea agreement, they did include the portion of those payments that resulted from Fletcher's falsification of invoices," TPS officials informed Travelers Insurance in an email.
Specifically, Fletcher is accused of receiving emailed invoices from Golliher for $10,500 and $10,800 from Domingue and then turning around and submitting falsely inflated new invoices. That resulted in TPS paying the two vendors an excess of $18,600 total, which is what federal prosecutors reportedly included in the guilty plea to which Fletcher has agreed.
Golliher and Domingue are Facebook friends, and Fletcher is shown with Domingue in public photos posted to Domingue's account in September 2022.
Voicemails left for Golliher and Domingue went unreturned.
Foundation also defrauded
TPS' fidelity bond insurance claim also alleges that the nonprofit Foundation for Tulsa Schools suffered additional losses totaling at least $330,000 because of "similar fraud" by Fletcher, though TPS is not seeking insurance coverage of those losses because the foundation is a separate legal entity.
The allegations included Fletcher's submitting to the foundation $105,000 in Talented 10th invoices and facilitating "double payments" totaling $225,000 to Snickelbox for teacher trainee stipends already paid to the vendor by TPS for the summers of 2019 and 2020.
On Monday, the foundation declined to say whether it has filed its own insurance claim to cover those losses or whether it will be pursuing any civil claims against Fletcher or any of the vendors named in TPS' insurance claim.
The nonprofit organization relies on an outside accounting firm to manage its financial records and, similar to TPS, is subject to an independent third-party audit each year. The Tulsa World requested an interview with Foundation for Tulsa Schools President and CEO Moises Echeverria.
Instead, the foundation provided a written statement that in response to the losses connected to Fletcher, in early 2023 it began requiring additional people to review all donor fund payments by the foundation on behalf of TPS.
"We feel fortunate that our donors and supporters understand that the foundation and TPS were victims of criminal activity," the statement reads in part. "Fortunately, our most critical programs and initiatives continue to operate thanks to the generosity of many in our community."