Former School Board Member Gets 10 Years for Busing Contract Fraud

On July 16 a former North Chicago school board member was sentenced to 10 years in prison for taking at least $566,000 in kickbacks for steering $21 million in student transportation contracts to bus companies from 1999 to 2009. Gloria Harper, 63, is the first defendant to be sentenced since she signed a plea deal in 2012.

Harper, a former employee of North Chicago Community Unit School District 187 (NCSD), pleaded guilty last October to one count each of wire fraud and filing a false federal income tax return. She took the kickbacks from three individuals in charge of different school bus companies that benefited from the contracts, according to the U.S. Attorney’s Office for the Northern District of Illinois.

Harper instigated and orchestrated the fraud scheme with four co-defendants, including Alice Sherrod, who was NCSD transportation director from 2001 to July 2010. Sherrod and bus company representatives Tommie Boddie, Derrick Eubanks and Barrett White have also pleaded guilty and are awaiting sentencing. The contractors siphoned payments of at least $800,000 to Harper and Sherrod, and made more than $9.6 million in profits.

“This was a serious, serious offense that took advantage of an impoverished school district and the ultimate victims were the schoolchildren of North Chicago,” U.S. District Judge Sharon Johnson Coleman said in imposing the sentence.

Judge Coleman ordered Harper to serve her sentence consecutive to a 30-month federal sentence in Louisiana for education-grant fraud. The judge also ordered Harper to pay approximately $7.2 million in restitution to the North Chicago school district but noted the money is unlikely to be recovered.

“The North Chicago School District has one of the highest low-income populations in the state. But rather than looking out for the interests of the district’s taxpayers and the children who depended on the schools for education, Harper selfishly used her position to enrich herself, and then filed false tax returns,” Assistant U.S. Attorney Matthew Getter argued at sentencing.

Nine-Year Scheme Step by Step


Court records state that Harper and Sherrod used their positions to profit secretly by soliciting and accepting gifts and cash from their three co-defendants in exchange for securing lucrative student transportation contracts based on false student ridership numbers. Harper's role was to ensure there were enough votes on the school district board to ensure Safety First kept the busing contracts. She also controlled a block of votes on the board and wielded influence with other members, prosecutors said.

Initially, Harper and Sherrod received kickbacks of approximately $4,000 to $5,000 a month, but their take swelled to about $20,000 a month by 2003.

From the late 1990s until mid-2003, the NCSD contracted with various companies to provide student transportation, including T&M Transportation, which was owned in part and controlled by Boddie, and Eubanks Transportation, which was owned in part and controlled by Eubanks. In 2001, Harper and Sherrod met with Boddie and agreed they would arrange for the NCSD to increase the number of students that T&M transported in exchange for kickback payments.

In May 2003, Harper suggested to Boddie and Eubanks that they join together to form one company, Safety First Transportation Inc., which won the NCSD’s transportation contract in 2003. Then Harper, Sherrod, Boddie, and Eubanks agreed they would split the profits from the contract.

White, who prosecutors said acted as the “bagman” for the kickbacks, began receiving funds from Safety First as both an employee and a contractor after an IRS audit of that company in 2006 and 2007. In April 2008, the defendants agreed to set up a new company, Quality Trans LLC, to replace Safety First and to assume its contracts with the school district. All five agreed to continue splitting profits from Quality Trans, while Boddie, Eubanks and White kept making cash payments to Harper and Sherrod.

After the bus contract kickback scheme was uncovered in 2011, the North Chicago school board hired a new board president and new superintendent, and in December it agreed to an intergovernmental agreement for a state-appointed liaison to help oversee the district's decisions and operations. The NCSD cooperated with the investigation, according to the U.S. Attorney's Office.

Calls to district administrators were not returned at press time.



Last modified onTuesday, 30 December 2014 11:16