Local News

Wake School System Tries To Recoup Loss From Alleged Fraud Scheme

Posted April 28, 2005
Updated November 18, 2006

— The Wake County Public School System is putting items up for auction in an effort to replace missing money allegedly taken by former employees of its transportation department.

The school system believes the former workers, as well as two employees of Barnes Motor & Parts in Wilson and Raleigh devised a sophisticated ordering scheme that allowed them to siphon school system money to purchase personal items, such as vacation homes, jet skis, golf carts, furniture and other items.

The suspects in the case, with help from their lawyers, have been returning money and merchandise.

But the school system has been unable to get back the full value of the items.

For example, two Yamaha jet skis and a trailer that would cost about $15,000 new sold for only $10,800 -- a loss of more than $4,000. A 2004 Chevrolet truck, estimated at $25,000, sold for only $20,000. And a Myrtle Beach vacation home worth $90,000 sold for $85,000.

So far, the Wake County school system has recovered about $1.5 million. The total includes $1.3 million that Barnes paid. The company said the money was a "pre-payment" for future orders.

The money is sitting in an escrow account while a criminal investigation continues.

No one has been charged, but charges are expected.

Six of seven former school system and Barnes employees have returned cash or merchandise.

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