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FBI
Father/Son Tutoring
Company Executives Sentenced for Fraud
More Than 100 School Districts Victimized
Although financial fraudsters target all sort of victims, perhaps the
worst type of financial criminals are the ones who go after the most
vulnerable. A prime example of those types of criminals? A father/son
pair, the subjects of a recent FBI Chicago-led investigation, who
perpetrated a multi-million-dollar fraud against the Department of
Education that ended up victimizing low-income students from more than
100 public school districts in Illinois and other states.
Jowhar Soultanali, 62, and his son, Kabir Kassam, 38, ran tutoring
companies in the Chicago area—Brilliance Academy, Inc., offered on-site
school tutoring, while its wholly owned subsidiary Babbage Net School,
Inc., provided online training. The two advertised their services
mostly to schools with large numbers of low-income students. These
schools were recipients of federal funding from the Department of
Education earmarked for “supplemental educational services,” or
tutoring.
But Soultanali and Kassam brazenly misrepresented the nature and
quality of the tutoring services their companies actually provided,
both in their marketing materials and in their state provider
applications. The two promised to create customized tutoring programs
to address students’ academic needs, pre-test and post-test students to
determine where students needed help and how effective the tutoring was
in providing that help, and create useful student progress reports for
parents and schools.
Instead, what schools—and their students—got were mostly generic
tutoring programs configured at or below students’ grade levels,
partial or missing pre-test and post-test assessments that did little
to help students, and fraudulent progress reports that, in some cases,
were automatically generated by a computer program.
As part of the fraud scheme, Soultanali and Kassam also engaged in
fraudulent billing, including creating invoices based on false
attendance records and spreadsheets that contained inflated tutoring
time summaries.
But the two didn’t undertake this scheme by themselves. They also
bribed school officials and others to ensure that the fraud remained
hidden. Bribes included a Caribbean cruise for an assistant principal
in Texas and a trip to a gentlemen’s club for a state education
official in New Mexico.
All told, the two companies received about $33 million from school
districts around the U.S. Investigative activity revealed that
Soultanali and Kassam fraudulently obtained at least $11 million of
that for themselves during the 2009-2010 school year, using it to buy
lavish properties, luxury vehicles, and expensive jewelry.
Soultanali and Kassam brazenly misrepresented the nature and quality of
the tutoring services their company actually provided.
In the summer of 2010, an employee of one of Soultanali and Kassam’s
companies—suspicious of company activities—reported concerns to the
FBI’s Chicago Field Office. The Bureau opened an investigation, working
closely with the Department of Education’s Office of Inspector General
and with valuable assistance from the Chicago Public Schools’ Office of
Inspector General.
Investigators worked methodically to build a case—forensically
analyzing financial records from more than 100 school districts and 60
bank accounts; reviewing company records and e-mails; and interviewing
numerous individuals, including employees of the two tutoring companies
and school officials in Illinois and a number of other states. By April
2014, there was enough evidence to indict Soultanali, his son, their
two companies, and four other co-conspirators. Shortly after that,
Soultanali and Kassam—in order to stay out jail—paid their $500,000
bond with diamond and ruby rings, plus several luxury vehicles.
But that attempt at keeping their freedom was for naught. Both men
eventually pled guilty to fraud charges, and, last month, were
sentenced to federal prison. Both were also ordered to pay $11,393,762
in restitution to the Department of Education.
And fortunately, both Brilliance Academy and Babbage Net School went
out of business, and the victim schools are now able to contract with
legitimate and highly qualified tutoring services to enhance the
academic skills of their students.
According to Mark Prejsnar, the Chicago case agent who headed up the
investigation, the scheme perpetrated by Soultanali and Kassam
“demonstrated how the greed of a few individuals can have such a
negative impact on our most vulnerable citizens and communities.” And
he’s hopeful that the results of this investigation will serve as a
deterrent to others who might be contemplating similar frauds.
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