A former school superintendent and her husband were among six people indicted in November for allegedly bilking the New York City Board of Education of about $3.2 million that was meant to buy computers for 19 schools.
Queens District Attorney Richard Brown said the six carried off a bid-rigging, bribe, and kickback scheme in which they pocketed half the $6.3 million in computer contracts the Board had designated for Community School District 29, in southeast Queens.
The money was supposed to pay for computer labs in 19 of the district’s 28 schools, Brown said. The schools eventually received cheap computers of inferior quality that are often broken, prosecutors charge.
Brown said the alleged “flagrant theft of resources and the corrupt acts … deprived these schools and the children attending them of critically needed resources that could have been used to enhance their education and cheated New York taxpayers.”
Former District 29 Superintendent Celestine Miller, 59, of Hempstead, and her husband William Harris, 82, allegedly accepted bribes totaling $925,000, including the deeds to four private houses, $75,000 in checks, and $10,000 in American Express bills paid by a co-defendant.
In return, the indictment charges, Miller conspired to help three men and 14 corporations they controlled submit fraudulent bids and improperly obtain about $6.3 million in contracts. Two of them allegedly took $2.3 million of that money in kickbacks.
Prosecutors said attorney Ray Shain, 44, of Williston Park, businessman Thomas Kontogiannis, 51, of Old Brookville, and Kinson Tso, 34, of Dix Hills, conspired with Miller and Harris to falsify documents, get information unavailable to other bidders, and influence competitors and government officials.
In one case, the group allegedly forged other bids to make it appear that competitive offers had been submitted for a $1.2 million contract. Miller awarded that contract to Business Innovative Technology Inc., a company allegedly controlled by Tso and associated with Shain.
Eric Ruland, 31, of Islip, a paralegal who worked for Shain, also was charged.
Schools Chancellor Harold Levy accused the defendants of “stealing precious resources from a system that is already impoverished.”
He said he had created new safeguards to prevent other districts from making purchases like District 29’s without the knowledge of the board’s central office.
The complex case reportedly took Edward Stancik, special commissioner of investigations for schools, two years to untangle.
Brown charged that Miller, while superintendent of District 29, awarded contracts to Business Innovative Technology for new computers in 19 schools from 1996 to 1998. Company President Tso then allegedly gave $2 million to Kontogiannis and Shain.
Kontogiannis, in turn, sold four homes on 140th Ave. in Queens to Miller and her husband, gave them $75,000 in checks, and paid a $10,000 credit card bill they owed, the D.A. said.
Miller and her husband never paid for the homes, worth about $840,000, officials contend. In order to conceal the transfers, they allegedly created paper mortgages for about $640,000.
Miller, who made a failed bid for Congress in 1998, was ousted as superintendent of the last year after reportedly mishandling an incident in which a child took a loaded gun to school.
The defendants and their corporations were indicted on various counts of grand larceny, conspiracy, bribery, possession of forged instruments, falsifying business records, restraint of trade, and rewarding official misconduct.
Miller, Kontogiannis, Shain, Tso, and Ruland could be sentenced to 25 years in prison if convicted, and Harris could get 15 years. The corporations would be fined if convicted.
Officials also have filed a civil lawsuit seeking $6.3 million from Miller, Kontogiannis, Tso, Shain, and Business Innovative Technology.
District 29 includes the neighborhoods of Queens Village, Hollis, St. Albans, Bellaire, Cambria Heights, Springfield Gardens, Laurelton, Brookville, and Rosedale.
New York City Board of Education