Chavis indicted for money laundering, mail fraud


Charges stem from work in Oakland

By Mike Gellatly - mgellatly@civitasmedia.com



LUMBERTON — Benford “Ben” Chavis, the educator who caused a stir in January when he claimed to have led an effort that resulted in the firing of the superintendent of the local school system, has been indicted by a federal grand jury on six counts of money laundering and mail fraud related to his work with American Indian Charter Schools in Oakland, Calif.

Chavis is charged with three counts of money laundering and three counts of mail fraud. According to the court documents, he benefited to the tune of more than $1.1 million.

While in control of three charter schools, Chavis is alleged to have used federal grant money to lease properties to house the schools. These properties were owned or leased by companies he controlled, which is an illegal conflict of interest, according to the indictment. When Chavis’ companies leased properties to the schools, he charged a substantially higher rent — as much as $15,000 a month on one property. On grant applications, Chavis allegedly withheld information that he had any stake in the companies, which would be a crime.

The grant applications and leasing documents were signed by Chavis. In one case a lease specifies “all correspondence and business activities shall take place with the lessor and Dr. Ben Chavis exclusively.” Sending these documents, which the Department of Justice believes Chavis knew to be illegal, constitutes the mail fraud charges.

The indictment states that Chavis gained $1,137,220 by illegal means; if he is convicted, he would have to repay the money and relinquish any property purchased using the money. Federal money laundering charges carry a maximum sentence of 20 years in prison and up to a $500,000 fine. Mail fraud is a felony with a maximum term of five years in prison and a $250,000 fine.

The indictments and an arrest warrant were filed March 21 in Oakland, but were kept under seal until after 5 p.m. Thursday.

According to federal prosecutors in San Fransisco, Chavis has been under investigation since at least 2013. At that time FBI and Internal Revenue Service agents raided his Oakland home and the three schools, seizing computers, documents and financial records. A 2012 audit in California raised concerns of financial impropriety and allegations that Chavis and his wife had received improper payments.

Two companies that are alleged to have been used were Lumbee Properties LLC and American Delivery Systems. Lumbee Properties is also referenced as Lumbee Holdings. A company of that name is registered with the California Secretary of State and lists Chavis’ home address in Robeson County as its headquarters.

Three properties were leased or owned by these companies and then rented to the charter schools. Each property and related lease accounts for one charge of money laundering and one of mail fraud.

The schools Chavis’ charges relate to are the American Indian Public Charter School, the American Indian Public High School, and the American Indian Public Charter School II, all in the Oakland area.

The public charter school leased 3637 Magee Ave. in Oakland for $20,684.32 a month in July 2008. It is alleged that Chavis’ company American Delivery Systems leased it from its owner for $4,700 a month and the balance, $15,984.32, was deposited into accounts Chavis controlled.

The Public Charter School II rented 171 12th St. in Oakland for $21,600 monthly on a three-year lease. Chavis’ Lumbee Holdings allegedly owned that building.

The American Indian Public High School paid a monthly rent of $17,000 on a three-year lease. Chavis’ company leased this building for two years for $2,200 a month and then purchased it, paying $8,403.35 a month thereafter, according to the indictment.

Chavis was arrested Thursday and transported to Wilmington to appear before U.S. Magistrate Robert Jones Jr.

It was determined that Chavis would not be able to pay for an attorney so he will be appointed a federal public defender. He was released on a personal recognizance bond.

The Robesonian called Chavis’ cell phone on Thursday but it went quickly to voicemail.

Chavis, a native and resident of Robeson County, gained renown as an educator for his tenure with the charter schools. He once appeared on “60 Minutes” and shared the story of how he said he was able to get at-risk students to succeed. He also runs a camp in Robeson County which stresses math.

His return to the spotlight in Robeson County began in January when he claimed to orchestrate the firing of Public Schools of Robeson County Superintendent Tommy Lowry and the attempt by six members of the school board to replace him with Virginia-based educator Thomas Graves. The Board of Education attempted to hire Graves but rescinded that action after a lawsuit was filed and it was deemed to have violated the board’s hiring policy.

The system is currently looking for a superintendent, and Graves has indicated previously he would apply for the position.

http://stpaulsreview.com/wp-content/uploads/2017/04/web1_Ben-Chavis2017330191833371-1.jpg
Charges stem from work in Oakland

By Mike Gellatly

mgellatly@civitasmedia.com

Reach Mike Gellatly at 910-816-1989 or via Twitter @MikeGellatly

Reach Mike Gellatly at 910-816-1989 or via Twitter @MikeGellatly

comments powered by Disqus