(Cleveland) - Ten individuals and 13 companies are named in a 32 count indictment surrounding the Cleveland Academy of Scholarship, Technology and Leadership Enterprise (CASTLE).
The indictment includes charges of engaging in a pattern of corrupt activity, conspiracy to engage in a pattern of corrupt activity, theft by deception, money laundering and unlawful interest in a public contract.
Cuyahoga County Prosecutor Timothy J. McGinty announced the indictments Tuesday.
McGinty says CASTLE began its operations in 2004. The Ohio Auditor of State conducted an audit to determine whether payments to selected vendors were related to CASTLE’s business operations and to investigate unexplained bank activity regarding the company’s bank account.
Between July 1, 2004, and June 14, 2010, payments were made to thirteen shell companies owned by or affiliated with five CASTLE board members or officials which were not supported by documentation. The State Auditor issued nineteen findings for recovery totaling $1,850,489.
William Peterson, 43, of Dayton, was the CEO of CASTLE while at the same time he had an undisclosed ownership and/or financial interest in the following companies: Educational Management Alliance (EMA), Kids 2000, Leadership Training Institute (LTI), Cross Tech EduServe, and 2K2 Technologies. He used these companies to launder approximately $858,000 from CASTLE.
Thomas Unik, III, 52, of Cleveland, served as CASTLE board chairmen and was partial owner of Sunshine Limited Partnership/Superior Lofts through which CASTLE leased its facilities. From 2004 through 2010, CASTLE paid $478,785 in excess of the stated lease terms with no evidence of additional arrangements or board approval for the excess payments.
Dennis Stewart, 65, of Dayton, served as a business associate of William Peterson and had an ownership interest in Educational Management Alliance (EMA), Kids 2000, and ELMO. Through these shell companies he laundered and stole $367,344 from CASTLE.
Stanley Jackson, 38, of South Euclid, served as a CASTLE board member and had an ownership and/or financial interest in Comprehensive Consulting, Juggernaut, and Fiscal Management Services. He was the authorized signatory on the bank accounts for each of these companies. CASTLE issued 30 checks to the companies totaling $200,000 without evidence that goods or services were provided.
Claudette Williams, 34, of Cleveland, was the president of Comprehensive Consulting and along with Stanley Jackson, withdrew cash from the Comprehensive Consulting Bank account on several occasions.
Carl Shye, 58, of New Albany, was the treasurer of CASTLE from July 2006 through June 2009. Shye was also treasurer of other schools founded by William Peterson. Shye further maintained the accounting records of Educational Management Alliance (EMA) and Kids 2000. Additionally, he was listed as treasurer for vendor Eagle Eye Services. Through his position as treasurer of CASTLE, he laundered and stole $144,905 from CASTLE.
Rolando Peterson, 41, of Shaker Heights, is Williams’ brother and served as CEO of CASTLE. During the period of 2004 through 2010, he laundered and stole $8,829 from CASTLE.
David Lembo, 45, of Solon, was the owner of North Coast Real Estate Management and negotiated the lease for CASTLE with William Peterson. On five separate occasions, Lembo gave kickbacks to Peterson totaling $6,425.
Dale Qualls, 51, of Dayton, owned Qualls Auto Center and sold a school bus to CASTLE for approximately $20,000. He subsequently gave a kickback of $5,000 to William Peterson.
Diana Peterson, 44, of Dayton, along with her husband William Peterson, owned Kids 2000. Together, they laundered and stole 33 checks from CASTLE totaling $106,625.
The Cuyahoga County Prosecutor’s Office, State of Ohio Auditor’s Office, and the Cuyahoga County Sheriff’s Department assisted in the investigation.
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