Wake School Superintendent Addresses Rumor Related To Fraud Investigation

RALEIGH, N.C. — A suspected elaborate fraud scheme that investigators say may have cost the Wake County School System millions of dollars leaves both professional and personal questions for the school system's superintendent to answer.

Investigators suspect five former employees of the Wake County School System's transportation department worked with former managers from a parts company to siphon money from the school system.

One rumor about the alleged scheme has chased Superintendent Bill McNeal since the onset of the fraud investigation at the bus yard.

It is rumored that he is related to Vern Hatley, the former transportation head caught up in the investigation.

"I've heard the rumor that he's my brother-in-law," McNeal said. "That is not true."

McNeal said, however, there is a basis for the rumor.

"The friendship came, or the relationship came, as a result of my sister and his wife in college together -- they were in the same dorm," McNeal said. "I have known Vern Hatley for 37 years. Part of that relationship certainly was a friendship."

Hatley lives in a house across the street from McNeal.

McNeal said he has hardly spoken with his former director in the last five months.

In September 2004, McNeal initially defended Hatley, saying there was no evidence at that time he had anything to do with the suspected fraud scheme.

Since then, Hatley has resigned and turned over nearly $23,000. An attorney for the school system said the payment covers a television, computer and carpet Hatley received for his home.

McNeal said because of his history with Hatley, he recused himself from the internal investigation from the very beginning, and that the school system has been very open and very aggressive throughout the investigation.

Authorities believe the scheme may have lasted two to three years and cost the school system at least $2 million. Former employees from the transportation department, as well as Barnes Motor & Parts have turned over merchandise and money.

The criminal investigation continues. Charges are expected this summer.