The End Of A Long, Ugly Chapter For The St. Joseph School District
Everyone knew what the judge was going to do Thursday in an 8th floor federal courtroom in downtown Kansas City when former St. Joseph School District superintendent Dan Colgan appeared for sentencing.
Still, there were a couple of surprises.
Colgan pleaded guilty to one count of wire fraud in June, and he agreed to spend a year in federal prison and repay $608,257 in ill-gotten pension payments from the Missouri Public School Retirement System (PSRS). The government said he ran a seven-year long scheme, from 1997 to 2005, to boost his salary in order to increase his pension.
Colgan had a reputation as pugnacious and authoritarian in his 14 years as superintendent and his one term on the school board after he retired.
But after a brief hearing before U.S. District Judge Dean Whipple, where he accepted the plea deal, Colgan went out of his way to shake hands with the people most responsible for sending him to prison: the two
FBI agents who worked the case for more than two years and Chris Danford, the school board member who blew the whistle on $5,000 of improper stipends to 54 administrators.
It was the stipends that eventually led investigators to Colgan's illegally inflated pension scheme.
Colgan asked the judge to allow him to surrender after the first of the year so he could spend the holidays with his family. The government did not object and Colgen will surrender on January 3. He asked to do his time at the minimum security camp at the United States Prison in Leavenworth. That decision is up to the U.S. Bureau of Prisons.
While Colgan did not speak, he stood next to his lawyer, Brian Gaddy, who said his client's "number one goal was to accept full responsibility for his actions."
“He harbors no ill will or ill feelings towards anyone associated with this case,” Gaddy said.
Colgan had to produce the restitution check at his sentencing hearing as part of the deal. There was an odd moment when Judge Whipple wanted to see the check actually handed over to the assistant U.S. Attorney prosecuting the case. It looked like one of those grip-and-grin, hand-the-check-over charity events.
PSRS was taking no chances with that kind of money. It dispatched its top lawyer from Jefferson City to retrieve the check.
The various scandals in the district have rocked St. Joseph for two years. Gaddy says Colgan hopes for a brighter future for the district he left in dire straights. "We hope this brings some closure to a long investigation that involved a lot of other folks and a lot of other issues besides what we were in court for here today.”
Dozens of school district employees were interviewed by the FBI. For two years the case agents attended every school board meeting.
All of this erupted in the spring 2014 when it was revealed that former Superintendent Fred Czerwonka handed out $5,000 stipends to 54 administrators without permission from the school board. Czerwonka was fired after a scathing report from the Missouri State Auditor.
The auditor uncovered up to $40 million in unapproved stipends going back years. All of those were handed out while Colgan was either superintendent or head of human resources.
Since then the district has settled aslander 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.
The district has been in turmoil since the stipend scandal surfaced. Superintendent Robert Newhart says Colgan's sentencing does bring some closure to the district. "This is just one step toward rebuilding as a district after several years of unrest," Newhart said in a statement. "For the sake of our teachers, support staff and students, we need to continue to move forward. We know that this process is going to take time."
The district asked the judge to tack on another $39,000 in restitution for money it claimed the district lost in the Colgan scheme. The judge refused they request.