Former Limestone County Schools Superintendent Tom Sisk admitted in federal court Thursday to funneling money through a charity and personally receiving about $13,000 in an alleged scheme to fraudulently enroll students in public virtual schools.
This admission and others came in a plea agreement as Sisk pleaded guilty to one count of conspiring to commit mail or wire fraud. The plea agreement was filed in the U.S. District Court in the Middle District of Alabama in Montgomery.
Named in the federal indictment in February along with Sisk were former Athens City Schools superintendent Trey Holladay and his wife Deborah, a former Athens City Schools teacher; Rick Carter, Athens City Schools’ director of planning; and David Webb Tutt and Gregory Earl Corkren, both described in the indictment as longtime friends of Trey Holladay. Carter is now on paid administrative leave.
Corkren and Tutt were also scheduled to enter guilty pleas Thursday afternoon, although their plea agreements had not been filed as of late Thursday. All six defendants had originally entered not guilty pleas. They are all charged with conspiring to commit mail and wire fraud. Trey Holladay, Carter and Corkren are also charged with aggravated identity theft for allegedly obtaining confidential student information from private school students to assist in the scheme.
The indictment accuses the defendants of conspiring to fraudulently enroll students in Athens and Limestone County virtual schools and falsely reporting the students to the Alabama State Department of Education in order to receive payments from Alabama’s Education Trust Fund as if the students actually attended public schools. The defendants are accused of then keeping some of that money for their personal use.
According to the plea agreement, when traveling together to a superintendents meeting in 2016, Holladay told Sisk they needed to find a way to “balance the playing field” as they discussed an ongoing lawsuit between their school systems and other districts over the allocation of tax revenue generated in Limestone County.
The agreement stated that Sisk understood this to mean that Athens and Limestone County school districts needed to find a way to add students to offset money lost to Madison and Huntsville city school districts.
Sisk discovered that Athens City Schools was able to add students and get a larger share of local tax revenue by enrolling students in ACS’s virtual Athens Renaissance School.
'You're killing me'
Later in 2016, according to the plea agreement, Sisk confronted Holladay. "You're killing me," Sisk said, according to the plea document. "You're getting all these virtual kids and all these funds. You're building a new high school, (Madison City Schools) built a new school and is taking our kids. We're in the middle of this lawsuit and you are getting all these virtual students."
In response, Holladay put Sisk in touch with Corkren, who had formed Educational Opportunities and Management LLC, according to the plea agreement. In the plea deal, Sisk agrees the government would be able to prove that, by the summer of 2016, Corkren, through Ed Op, was offering various incentives to private schools, including monetary payments, laptop computers and access to online curriculum.
In exchange, according to the agreement, Corkren was asking the private schools to provide him with student academic and identifying information and giving that private school student information to ACS officials to use to falsely enroll the private school students in Athens Renaissance.
The agreement claims that Corkren was doing all of this at the direction of Holladay.
During the summer of 2016, Holladay informed Sisk that Corkren would be willing to provide Sisk with anything he needed or wanted, and Sisk inferred that Holladay meant Corkren would be willing to give him money. Holladay suggested that Sisk needed to get on board "before the well dries up."
Thereafter, Sisk and Corkren agreed that Corkren would provide students for Limestone County Virtual School and, in exchange, Sisk would pay Corkren a monthly fee for each student that Corkren provided. Sisk in the plea agreement acknowledged he and Corkren knew that many of these students were private school students who were not actually receiving a full-time education from Limestone County Schools.
The agreement claims that Holladay was aware of and facilitated this agreement.
Sisk and Corkren agreed on a contract between the school system and Ed Op, which Sisk executed for the school district. In the official contract approved by the Limestone County school board, Ed Op would be paid $45 per student serviced each month. Sisk, however, instructed Corkren to invoice LCS at a rate of $55 per student per month, with Corkren setting aside the extra money.
Later, Sisk instructed Corkren to pay the excess money to a charity, referred to as Charity A in the plea agreement. During an in-person meeting, Sisk wrote the name of Charity A on a napkin and an address for Charity A where Corkren should send the check. The address was Sisk’s personal residence.
Sisk gave the $15,000 he received to the charity, but around Jan. 20, 2017, Sisk caused Charity A to wire $13,000 from its account to a personal account of Sisk’s. Sisk then used money obtained from Ed Op through Charity A for personal expenses, including trips to New Orleans and Denver and expenditures at hobby shops, according to the plea agreement.
Sisk would later send a letter to Corkren canceling the contract between Limestone County Schools and Ed Op. He also sent a letter to the Alabama State Department of Education reporting that the school district had included private school students in its fall 2016 average daily membership report and asking that those students be removed and that LCS not receive funding for those students.
The Alabama Department of Education complied with the request and LCS did not receive funding for the private school students.
The plea agreement cites a number of statutory penalties: no more than five years of prison time, a fine of no more than $250,000, or twice the value of the property involved in the transaction, whichever is greater, or both the fine and imprisonment; a term of supervised release of no more than three years; and an order of restitution.
An addendum to the plea agreement was filed Thursday, but it remained under seal.
The agreement states that the government agrees to recommend a sentence below the sentencing guidelines as determined by the court.