FBI probes former Burlington school official over $1.8m fraud scheme
Federal agents are investigating whether ex-Burlington School District administrator Stephanie Phillips siphoned $1.8m over 13 years via a fictitious consulting firm.
Former Burlington school administrator investigated by FBI over alleged $1.8 million embezzlement
Federal investigators are examining whether Stephanie Phillips, a former administrator at Burlington School District, defrauded the district of at least $1.8 million across 13 years, vtdigger.org reported Wednesday.
Phillips joined the district in 1988 and retired in May, most recently serving as director of teaching and learning. According to court documents, the FBI is investigating whether she established a fictitious company — Leading and Learning Consultants of VT, LLC — to siphon money from the district.
"I think it is fair to say that they were funds earmarked for professional learning," district spokesperson Russ Elek said in an email to VTDigger.
Phillips has not been charged with any crime. She did not respond to requests for comment.
Double billing and invoices for work never done
Special Agent Eric Boyce wrote in an affidavit that investigators had probable cause to believe Phillips exploited her company in at least two fraudulent ways. She submitted invoices from the consulting firm for her regular duties at the district, "allowing her to be paid twice for the same work," Boyce wrote. She also generated invoices for services that were never rendered.
Investigators are sceptical the company was legitimate: agents found no evidence it performed work for any other school districts, despite Phillips claiming it had additional clients.
Business filings with Vermont's secretary of state's office name Don Collins — a former state senator who chaired the Senate Education Committee and who is Phillips's father — as the company's manager. Reached Wednesday, Collins initially said he had no recollection of the company and declined to comment further.
Since March 2013, agents believe Phillips fraudulently obtained at least $1,769,000 from the district, court records show. The investigation covers potential wire fraud, mail fraud, and theft from school programmes receiving federal funding.
Search warrant executed at Colchester home
On 16 October, federal agents executed a search warrant at Phillips's house in Colchester, targeting records and information related to her company. The search was carried out "in connection with an ongoing federal investigation," according to Sarah Ruane, a spokesperson for the FBI in Albany, who declined to provide further details.
The current superintendent, Tom Flanagan, filed a complaint with Burlington Police Department in June, alleging Phillips had been paid for work never completed — a step that triggered the federal probe.
District: 'we are victims'
Flanagan emailed parents and community members Tuesday night in response to news of the investigation, describing the situation as "possible embezzlement."
"If these allegations are proven true, our district and community are victims, and we will seek to recover all funds and bring them back to our students," Flanagan wrote.
He added that financial discrepancies were identified shortly after Phillips left the district in spring, and that the district immediately reported them to both local and federal investigators. Phillips held several positions of authority during her tenure, including acting superintendent in 2014 and assistant principal at an earlier stage, according to Elek.
Since uncovering the irregularities, the district has tightened its invoicing procedures and imposed stricter limits on individual spending. Flanagan said an outside expert would also review the district's financial controls and recommend additional safeguards.
The investigation was first reported by Vermont News First.
Source: Google News MT — Crime (en)