Paso Robles woman guilty of $35 million fraud scheme
June 7, 2011
A Paso Robles woman was found guilty this afternoon of three felony counts in a scheme to defraud the United States Department of Education and the California Department of Education by submitting an application for more than $35 million in grant money that contained forged signatures and other alterations and misstatements.
Jean Michele Cross, 59, was found guilty of mail fraud, forging a writing to obtain money from the United States and making false statements.
Cross was convicted of the criminal offenses for preparing and filing in March 2007 an application for a 21st Century Community Learning Centers Program (21st CCLC) grant on behalf of IYTF, a non-profit, community-based organization in the Coachella Valley. The application sought annual awards of $7,131,856 for five years.
The California Department of Education, which administered the 21st CCLC grant program in California, awarded the grant for approximately $6.9 million annually and mailed a $3,455,370 check to IYTF in December 2007. In April 2008, after improprieties about the grant application process surfaced, IYTF returned the check.
The 21st CCLC grant application contained several forms that required original signatures from persons involved with the administration of the grant, including the authorized executive of the applicant agency, school principals and school district superintendents.
The evidence at trial showed that Cross altered and forged signatures and documents in the 21st CCLC application. Specifically, Cross forged the signatures of the executive director of IYTF, school principals and school district officials on the 21st CCLC application and supporting documents.
Cross also forged and altered documents submitted in support of the application. For instance, Cross altered a document that purported to be a memorandum of understanding from Desert Sands Unified School District by adding terms the school district had not agreed to, such as stating that Desert Sands Unified School District would contribute approximately $156,445 to programs being funded by the grant. Cross also forged memoranda from several other school districts, including the Perris Elementary School District, the Perris Union High School District and the Nuview Unified School District.
Additionally, Cross made many false statements in the narrative portion of the grant application. For instance, she represented that student, parent and staff surveys were conducted to plan for the grant application when, in fact, no such surveys were actually conducted and statistical information had been copied from prior grants that Cross had written.
Cross concealed a 15 percent fee she had negotiated in exchange for submitting a successful grant application.
As a result of today’s convictions, Cross faces a maximum statutory penalty of 35 years in federal prison. She is scheduled to be sentenced by United States District Judge Virginia A. Phillips on August 29.
The case against Cross is the result of an investigation by the United States Department of Education, Office of Inspector General; the Federal Bureau of Investigation; and the Riverside County District Attorney’s Office.