“Nearly $1 million from charters went to firms named in FBI probe”

August 18, 2014

Chicago Sun-Times on August 18, 2014 released the following:

By: DAN MIHALOPOULOS

“Contractors facing scrutiny in an ongoing federal investigation of Concept Schools have been paid nearly $1 million over the past three years for work at three Chicago Public Schools-funded campuses run by the Des Plaines-based charter operator, records show.

In June, the FBI raided 19 Concept Schools locations in Illinois, Indiana and Ohio, including the group’s Des Plaines headquarters. Search warrants showed they were seeking records concerning Concept’s use of the federal “E-rate” program and companies hired under that program, which helps pay for high-tech upgrades.

The agents also were looking for records regarding top Concept officials, the Chicago Sun-Times reported last month.

No one has been charged. The FBI has said only that the investigation is a “white-collar criminal matter.”

The CPS-funded work done by the contractors named in the FBI search warrants has ranged from selling Concept computers and uniform polo shirts to organizing professional-development seminars.

Concept operates three schools in Chicago. All rely almost entirely on public funding.

Concept’s Chicago Math and Science Academy in Rogers Park — one of the schools the FBI raided June 4 — was approved by CPS officials 10 years ago.

The charter operator’s Horizon Science Academy McKinley Park at 2845 W. Pershing Rd. and Horizon Science Academy Belmont at 5035 W. North Ave. have been open for a year after being initially rejected by CPS because of questions regarding student performance at CMSA.

Concept appealed to the Illinois State Charter School Commission, which overrode CPS, ordering them to finance the two schools with tax dollars.

The three Chicago Concept schools have paid more than $283,000 since the start of 2011 to Advanced Solutions in Education of Schaumburg, records show. The company and its founder and former chief executive, Ozgur Balsoy, were named in FBI search warrants served at

Concept’s headquarters and at its schools in Rogers Park and Peoria.

ASE was a consultant for Concept on its applications for federal E-rate funding. The company also was hired to do other work for Concept, including organizing seminars for school administrators and teachers.

Balsoy previously was an administrator at a Concept school in Columbus, Ohio. He formed ASE in Ohio in 2009, expanding to Illinois in 2011. ASE listed him as “sole owner” until 2012. He’s now listed as vice president.

ASE’s president, Erdal Aycicek, formerly served was treasurer of the Niagara Foundation, based in downtown Chicago. Like Concept and many of its contractors, the foundation was founded and continues to be led by Turkish immigrants, many of them with ties to the global Gulenist movement led by Muslim cleric Fethullah Gulen, who now lives in Pennsylvania.

Two other ASE executives — Huseyin Alper Akyurek and Esat Albulut — also previously worked for Concept as administrators at schools in Ohio.

ASE executives did not return calls seeking comment.

Another company listed in the search warrants, Core Group Inc. of Mount Prospect, has been a major contractor for Concept’s schools in Chicago. The three schools have paid more than $550,000 to two Core subsidiaries for goods including computers and polo shirts with school logos on them.

Core’s president, Ertugrul Gurbuz, who was named in the search warrants, also founded Quality Builders of Midwest Inc., a Concept construction contractor whose work included building a gym addition at CMSA at 7212 N. Clark St.

Gurbuz referred questions to attorney Patrick Cotter, who said Friday the company is “in the process of complying” with a grand-jury subpoena it got as part of the FBI probe. Cotter declined to say what Core was asked to turn over.

A Core subsidiary was cited in a 2012 audit, done for Fulton County, Georgia, school officials, that questioned why a Gulen-affiliated charter school in that state bought polo shirts from Core Design & Production when “there were cheaper prices to be obtained.” The principal of the Georgia school told auditors he looked online for a polo shirt vendor and found Core — though the auditors said they found no mention of polo shirts on the company’s website.

Core was started in 2005 by Guclu Koseli, who was a founding board member for Concept in Illinois.

Another contractor named in the FBI search warrants — Signature Maker Inc. of Hoffman Estates — has been paid more than $112,000 by Concept’s Chicago schools, Concept records show.

Signature Maker owner Ergun Koyuncu, who was also named in the search warrants, would not comment.

Concept’s vice president, Salim Ucan, also declined to comment, citing the ongoing FBI investigation.

The federal E-rate program requires competitive bidding in hiring contractors in an effort to ensure taxpayer dollars are spent wisely. There’s no such requirement, though, imposed on charter schools by either CPS or the state charter commission, even though the privately run schools depend almost entirely on tax dollars and CPS requires competitive bidding for its own schools.

Nor do they require charter operators to report to officials who their vendors are or how much they are paid.

None of the deals that Concept’s Chicago schools made with Core or ASE was awarded via competitive bidding.”

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Douglas McNabb – McNabb Associates, P.C.’s
Federal Criminal Defense Attorneys Videos:

Federal Crimes – Be Careful

Federal Crimes – Be Proactive

Federal Crimes – Federal Indictment

Federal Crimes – Detention Hearing

Federal Mail Fraud Crimes

Federal Crimes – Appeal

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To find additional federal criminal news, please read Federal Criminal Defense Daily.

Douglas McNabb and other members of the U.S. law firm practice and write and/or report extensively on matters involving Federal Criminal Defense, INTERPOL Red Notice Removal, International Extradition Defense, OFAC SDN Sanctions Removal, International Criminal Court Defense, and US Seizure of Non-Resident, Foreign-Owned Assets. Because we have experience dealing with INTERPOL, our firm understands the inter-relationship that INTERPOL’s “Red Notice” brings to this equation.

The author of this blog is Douglas C. McNabb. Please feel free to contact him directly at mcnabb@mcnabbassociates.com or at one of the offices listed above.


“FBI seized vendor records, hard drives from Horizon charter schools”

July 23, 2014

The Columbus Dispatch on July 23, 2014 released the following:

By Jennifer Smith Richards

“The FBI is examining the relationship between the Horizon Science Academy charter schools and several technology vendors, including some based in Ohio.

Court-ordered search warrants and evidence logs show that FBI investigators removed financial documents, including check stubs, invoices, bank records and travel-reimbursement receipts from the Concept Schools headquarters and Horizon Science Academy Middle School in Columbus. Agents also took external computer hard drives and copied more than a dozen hard drives.

The warrants from early June sought any records related to the federal E-rate program dating back to 2003. Agents served the warrants in Concept-operated buildings on June 4. A federal grand jury also issued a subpoena to the schools for the same information sought in the warrants.

The Chicago-based school group runs 30 public charter schools across the Midwest, 19 of them in Ohio. Four are in Columbus. The FBI served warrants in several Midwestern states, including Ohio, Indiana and Illinois. Agents searched individual schools, as well as main and regional headquarters and storage units.

The Dispatch obtained the warrants and FBI evidence logs through public-records requests to the schools. The logs don’t indicate the reason agents removed records or computer hardware, only a description of the evidence they seized.

Schools can use federal E-rate grants to purchase technology upgrades and discounted telecommunication services. Ohio’s Horizon schools, which are publicly funded but privately run, have been awarded about $7.4 million in E-rate grants since 2002.

An FBI spokeswoman in Cleveland said yesterday that she could not release more information about the FBI’s interest in the Horizon Science schools. The spokeswoman, Vicki Anderson, repeated that the FBI is conducting “an ongoing investigation that involves a white-collar type matter” and is working with the U.S. Department of Education and the Federal Communications Commission. The FCC distributes E-rate grants.

A spokeswoman for Concept Schools in Chicago said yesterday that there’s little the schools can say about the investigation, but that Concept is cooperating.

Investigators focused on a few technology vendors in seeking invoices and payment data from the Chicago Concept Schools headquarters and from the Columbus headquarters, which oversees half of Ohio’s Concept buildings. Some of those vendors are in Ohio and one is a former Concept Schools employee.

Schools that use E-rate funds have to select vendors through a competitive bidding process to get the most cost-effective rates.

Agents seized information related to Ozgur Balsoy, vice president of Advanced Solutions for Education. The company is based in Mentor, near Cleveland, and also has headquarters in Schaumburg, Ill., a suburb of Chicago. Records kept by the Ohio Department of Education list Balsoy as an administrator at Horizon Science Middle School in Columbus in 2007.

The FBI also removed financial information related to Core Group, Inc., which is based in suburban Chicago and run by Ertugrul Gurbuz; Cambridge Technologies based in Chesterland, Ohio, which is owned by Stephen Draviam; Sundance International, an IT company owned by Galip Kuyuk and based in Chicago and Istanbul; and the Metropolitan Educational Council in Columbus. The MEC is an education consortium that contracts to provide services to several central Ohio public school districts.

Concept Schools was founded by a group of Turkish scientists and continues to be managed by Turkish-Americans, including the three Horizon schools and Noble Academy in Columbus.

The owners of some of the companies whose financial relationships with Concept Schools are of interest to the FBI also are of Turkish heritage.

The warrant served at the Concept headquarters buildings also sought records about specific employees, including Concept Schools’ founder and the chief information officer.

This FBI’s work is separate from some state inquiries into Horizon Science. A handful of former teachers at a Horizon school in Dayton have made several allegations about that school, including unreported sexual activity in the school, unequal treatment of students and teachers, and standardized-test cheating. Both the Ohio Department of Education and the state auditor have said they will look into the matter.

Concept Schools officials called those allegations baseless but said they will look into them.”

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Douglas McNabb – McNabb Associates, P.C.’s
Federal Criminal Defense Attorneys Videos:

Federal Crimes – Be Careful

Federal Crimes – Be Proactive

Federal Crimes – Federal Indictment

Federal Crimes – Detention Hearing

Federal Mail Fraud Crimes

————————————————————–

To find additional federal criminal news, please read Federal Criminal Defense Daily.

Douglas McNabb and other members of the U.S. law firm practice and write and/or report extensively on matters involving Federal Criminal Defense, INTERPOL Red Notice Removal, International Extradition Defense, OFAC SDN Sanctions Removal, International Criminal Court Defense, and US Seizure of Non-Resident, Foreign-Owned Assets. Because we have experience dealing with INTERPOL, our firm understands the inter-relationship that INTERPOL’s “Red Notice” brings to this equation.

The author of this blog is Douglas C. McNabb. Please feel free to contact him directly at mcnabb@mcnabbassociates.com or at one of the offices listed above.