Dr Dan Colgan appeared in US court Monday, waived his right to a grand jury indictment and pleaded guilty to one count of wire fraud.
It appears the plea wraps up the two-year federal investigation into the finances at the St. Joseph School District.
“Today’s criminal felony conviction brings to conclusion an extensive, thorough investigation into fiscal wrongdoing in the St. Joseph School District,” said Tammy Dickinson, United States Attorney for the Western District of Missouri. “We do not anticipate charges against any additional defendants in the future.”
The former St. Joseph School District superintendent made the plea in connection with the misrepresentation of retirement documents.
Officials say those misrepresentations cost the school district more than $14,000 and the state’s Public School Retirement System more than $662,000. Earlier Dr. Colgan agreed with an order from the PSRS that he repay those funds.
By pleading guilty, Colgan admitted that he caused others to falsely report his salary to the PSRS in order to increase his retirement benefits. Colgan knew that the salary figures he caused the school district to submit to PSRS on his behalf included fringe benefits and other payments to Colgan that were not eligible to be counted as salary under state statutes.
This fraud scheme began during the 1997-98 school year and lasted for eight years, until Colgan’s retirement. Colgan’s retirement benefits were calculated by using the amounts reported by the school district over the final three-year period before he retired.
During that final three-year period, the school district falsely reported that Colgan’s salary totaled $586,030. In reality, his salary totaled $343,286 – a difference of $242,744. As a result of the false statements to the PSRS, the school district made excess payments in the amount of $14,652 to the PSRS from 2003 through 2005, and Colgan was paid excess benefits that totaled $677,313 over a 10-year period.
Colgan’s salary reported for his final three years as school superintendent improperly included the following:
· Car Allowance/Travel Stipend: The $9,600 car allowance/travel stipend was a fringe benefit that was ineligible for retirement salary calculation purposes;
· Family Insurance Premiums: The family insurance benefits/premiums paid by the district of $5,225, $5,603, and $6,258 were fringe benefits that were ineligible for retirement salary calculation purposes;
· District Contribution to Taxable Annuity: The district payment for the school year 2004-2005 of $25,000 to purchase a taxable annuity for the superintendent was ineligible for retirement salary calculation purposes;
· “District Vehicle” Payments: In the final three years, the school district reported “District Vehicle” payments of $11,300, $11,300, and $28,975. The “District Vehicle” payments were separate from the $800 per month car allowance payments (described above). The “District Vehicle” payments were fringe benefits that were ineligible for retirement salary calculation purposes; and
· Unused Vacation Payment: An unused vacation payment in June 2005 of $10,820 was a fringe benefit that was ineligible for retirement salary calculation purposes.
Colgan pleaded guilty during a hearing in U.S. District Court for the Western District of Missouri in Kansas City.
The government made a recommendation for sentencing of one year and one day in prison, and the repayment of the more than $662,000 to P.S.R.S. by the sentencing date. However the judge says he will take the recommendation under advisement, and has ordered a pre-sentence investigation, to determine if he can accept the recommendation made by the government.
Sentencing will be scheduled once the judge has the results of the pre-sentence investigation.
To see the news release from the U.S. Attorney’s Office CLICK HERE.