St. Joseph School District Asks Court To Hike Former Superintendent's Fraud Fine

Sep 13, 2016

The St. Joseph School District has asked a federal judge to increase the fine of former Superintendent Dan Colgan.
Credit KCUR 89.3

The St. Joseph School District, smarting from the federal wire fraud conviction of a former superintendent, has asked the federal court to hike the fine to cover the district's financial loss.

Former Superintendent Dan Colgan pleaded guilty in June to one count of wire fraud for illegally boosting his salary to enhance his state pension. According to Colgan's plea deal with the government, he illegally received more than $662,000 in pension payments since his retirement in 2005. Colgan agreed to repay that amount and spend a year in federal prison.

But the district argues in its letter to the United States Probation Office that Colgan should repay even more because of the harm and the "betrayal to the students, parents and taxpayers of St. Joseph."

"The leadership of the School District is in a long struggle to restore the public's confidence and trust in the School District and its governance, and we expect that it will be many years before that confidence and trust can be restored," the letter says.

Colgan is expected to formally be sentenced in the next several weeks. The letter from the district becomes part of the pre-sentence investigation done by Probation and Pretrial Services.

The letter, signed by Superintendent Robert Newhart and Board President Martin Rucker, asks the court to make Colgan repay an additional $39,348. That's the amount of interest the district calculates it could have received had it not matched Colgan's illegally inflated pension payments.

The district says it chose not to sue Colgan because "the statute of limitations might have run out on any claims against him." The government said Colgan began his pension scheme in 1997.

The letter also asks the judge to "consider how Dr. Colgan's conduct has impacted even those who are no longer employed by the School District."

While the district asks for no specific remedy, this is a reference to a pair of other high ranking district employees who were forced to repay the Public School Retirement System (PSRS) for also improperly boosting their pension.

Former superintendent Melody Smith has repaid $23,000 and Mark Hargens, who retired as the head of Human Resources, repaid PSRS $90,000. The FBI determined neither broke the law.

PSRS began to focus on Colgan's pension after a series of stories by KCUR and Ballotpedia about a number of irregularities in the St. Joseph District.

The FBI spent two years investigating the district that was also dogged by a number of other scandals.

None of this would have become public without the stipend scandal that broke two years ago. At that time, it was revealed that former Superintendent Fred Czerwonka handed out $5,000 payments to 54 administrators without school board approval.

Since then, the district has settled a slander lawsuit with its former CFO for $450,000. It also ran afoul of the Missouri Department of Elementary and Secondary Education (DESE) in December 2014 when it improperly received $2 million in aid for unapproved summer school classes.

Sam Zeff covers education for KCUR. He's also co-host of KCUR's political podcast Statehouse Blend. Follow him on Twitter @samzeff.