Federal Charges In Ongoing Scandal In St. Joseph School District
After two years of investigation, a former St. Joseph School District superintendent and school board president will be charged with a federal crime.
Dan Colgan who, associates say grew up as a brawler on St. Joseph's north side, has two court dates Monday morning in federal court in Kansas City.
According to the district court, Colgan will appear before a magistrate and then before a district court judge. While we don't know exactly what he'll be charged with, these hearings indicate a plea deal is in the works.
Last month Colgan agreed to repay $660,000 to the Missouri Public School Retirement System (PSRS). A KCUR/Ballotpedia investigation showed how Colgan improperly inflated his compensation to boost his retirement pay by 22 percent or about $2,500 a month.
PSRS says the Colgan settlement is the largest in the system's history.
The precise charges won't be revealed until Monday, but it seems clear they revolve around the pension issue.
Colgan spent his entire career in the St. Joseph district. He organized the district's first human resources office and was HR director before being promoted to superintendent, so he was very familiar with contracts, the payroll system and how to manipulate them.
Here's just one example of how Colgan increased his pay: Using methods that few in the district or on the Board of Education knew about, Colgan was able to boost his 2002-2003 school year base pay of $108,700 to a staggering $185,892, a 71 percent increase. That year he received a $25,000 stipend, an $11,000 tax-sheltered annuity and a $14,450 car allowance.
He used similar tactics to inflate his 2001-2002 contract and his 2003-2004 deal with the district.
Two other top former officials in the district have also repaid pension benefits to PSR. Mark Hargens, who took over the HR job after Colgan was promoted, has repaid $90,000. Former superintendent Melody Smith has repaid $23,000.
Neither has ever been tied to the two year FBI investigation.
At the same time Colgan was inflating his pay, teachers and school board members have said, the district was struggling to pay staff and buy books.
Colgan was granted another perk that most retired educators don't get: lifetime paid health coverage.
His 2002 contract granted him health care, something that's already cost the district tens of thousands of dollars. That benefit was rescinded by the board last September.
This benefit was singled out in a scathing Missouri State Auditor's report released last February. At the time, the Auditor gave the district a rating of poor. Since that time the Auditor has said the district has made significant progress.
After he retired, Colgan was elected to the school board where he was president when the scandals that continue to plague the district of 11,000 students came to light.
None of this would have become public without the stipend scandal that broke almost 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 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. In the last two years, the district has gotten six subpoenas from a federal grand jury in Kansas City and the FBI continues to investigate the district.