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$96,000 missing at Deerwood

A review uncovers checks made out to cash, ineffective accounting controls and what one official terms a ''financial quagmire.''

© St. Petersburg Times
published November 10, 2002

PORT RICHEY -- About $96,000 that taxpayers poured into Deerwood Academy charter school in the past nine months cannot be accounted for, a Times review of the school's financial records has found.

The missing money would have made a huge difference in the operation of the young school: It totaled almost four times the amount Deerwood spent on textbooks and classroom supplies and amounted to a loss of more than $500 each school day. Put another way: $1 out of every $7 the school received from taxpayers since January is unaccounted for.

To calculate the loss, the Times combed through hundreds of Deerwood receipts, invoices, ledgers and bank statements. The tally includes only checks made out to cash and payments backed by phony invoices or none at all.

It does not include $52,000 in suspicious checks and questionable credit card payments. Nor does it include thousands of dollars collected for lunches and after-school programs that school district officials suspect was taken from Deerwood's cash box and for which there are few records and receipts.

School district auditors are reviewing every Deerwood check and receipt, but they have not yet tallied the financial damage -- an endeavor that likely will take weeks.

"As fast as the bank gets us the records, we're trying to put them together," said Olga Swinson, the district's finance director. "But I'm not sure we'll ever really know the extent" of the loss.

The Times review found dozens of bogus invoices and inflated receipts, as well as more than $48,000 in checks that were simply written to cash.

Signatures on several bank drafts appear to have been forged, and one $400 check was written by an employee who had no authority to do so.

The state attorney is investigating what schools superintendent John Long has called a "financial quagmire."

Deerwood opened last year and this year enrolls about 200 students in classrooms on Pine Hill Road it leases from Unity Church of Port Richey. Deerwood is a public school; but as a charter school, it operates independently of the Pasco County School Board. Its 2001 budget was roughly $830,000, almost all of it taxpayer money.

Seven Deerwood employees, including founder Hank Johnson, have either quit or been fired for their roles in the scandal.

"Hank Johnson is as concerned as anyone regarding the financial condition and health of the school," said his lawyer, J. Larry Hart. ". . . His time was preoccupied with developing the academic side of the school. He did not knowingly participate in any activity designed to divert money" from Deerwood.

At the center of the investigation is Port Richey resident Jeffrey Alcantara, 49, who served as Johnson's right-hand man.

Alcantara has a 20-year history of fraud, theft and drug convictions in Florida and Illinois, serving two years in a Florida prison on a fraud conviction. He also has federal tax liens against him in Texas, and has lost two civil cases in Pasco with damages totaling more than $3.5-million.

Alcantara's teenage daughter, Nicole, took over Deerwood's bookkeeping duties in late November 2001. Two months later, the bogus transactions began. She was among those fired last month.

Authorities have not charged either of the Alcantaras in the Deerwood investigation. Nicole and her mother, Joanne, have left Florida and are now living in Texas, authorities said. Jeff Alcantara is still living here, however.

Jeff Alcantara's lawyer said his client has done nothing wrong.

"Everything he did was for the benefit of the school," said lawyer George Tragos. "He never took any money from the school and he never did any damage to the school."

Interviews and financial records show that Jeff Alcantara and a friend, Aristides "Eric" Poppiti, appear to be involved in the vast majority of the school's questionable transactions. The two previously worked together as bellhops at the Sheraton Sand Key Resort on Clearwater Beach.

Poppiti declared bankruptcy in 1999. Court records show his annual income was $10,200, after taxes. Poppiti's annual salary as Deerwood's "security director" was $15,000.

In August 2001, Poppiti created a company that he named Nikon Dareios. Between January and August, the company received $31,955 from the school. The Times could find no record that Nikon Dareios has obtained any state licenses or holds any property. It doesn't even have its own phone number. Its address is a ramshackle apartment on Clearwater Beach once occupied by Poppiti and his wife, Lisa.

In just months at Deerwood, Poppiti and his company pulled in four times as much money as he made in all of 1999.

The Times has been unable to locate or interview Poppiti. He has no criminal record in Florida.

Nikon Dareios wasn't the only dubious company on Deerwood's payroll, however.

Another company, "AAA Air," billed Deerwood $4,480 on March 22 for a Carrier air conditioning compressor and a 5-ton condenser. The invoice came complete with equipment serial numbers. But the company does not exist in state corporate records nor does it have an occupational license. And Pasco school district officials say the equipment was never delivered.

Deerwood paid the bill anyway, with three checks. One check, for $547, was paid to cash, although a note attached to the invoice states the check was supposed to be written to Alcantara. The second check, for $3,800, was written to Poppiti. The third check, for $450, also was paid to cash.

"This was not a sophisticated scam," said Swinson, the school district finance director. "Had there been any kind of financial controls in place, none of this would have happened."

But Deerwood's records make clear that nobody was tracking the school's expenses.

Thousands of dollars were given to staff members for unexplained reimbursements or to local stores for unspecified supplies. Alcantara bought a $299 Sony PlayStation 2 at Circuit City, and billed the school, a credit card receipt shows.

The school paid more than $8,000 to various credit cards, with little explanation as to what was charged. Two credit card statements, however, show $550 in political donations to Republican groups. And somebody used the checking account to make $360 in car payments.

Deerwood suffered from air conditioning problems from the day it opened, Deerwood founder Hank Johnson previously told the Times. Yet Johnson apparently didn't question why the problems persisted despite more than $30,000 in repairs. The air conditioner problems persisted because the vast majority of that work was never done, district officials have determined.

The school's telephone system was also a source of trouble.

Deerwood paid Verizon for six phone lines, yet only three worked. And the fax machine would disconnect whenever the phone rang, according to district officials.

Yet if the school's ledgers are to be believed, Deerwood bought four different phone systems in less than eight months. Cost to taxpayers: $8,800. The Times confirmed that at least one of those payments, $1,600 to Tampa Bay Telephone, is bogus; another $4,045 in checks attributed to new telephone systems and repairs were actually written to cash.

Tampa Bay Telephone president Norman Mahan was irate that somebody phonied up his company's invoices.

"I'm coming out swinging," he said. "I want these sons of b------ in jail."

Bank records show that the $96,000 in missing money caused Deerwood serious financial problems.

By mid July, Deerwood's checking account had been drained. The school was forced to take out a $20,000 loan to cover expenses. In the four weeks prior, Deerwood had spent $13,270 on bogus invoices and receipts, the Times review found.

The missing money appears to have affected students.

Acting principal Ken Brown said this week that teachers have told him stories about classroom supplies and materials that they requested but never received.

"They were told to wait and be patient, but it never got done," Brown said.

On Thursday, a "whole pallet full of supplies" arrived at the school. Brown said he ordered materials teachers needed for class but didn't have. The school district, meanwhile, is investigating whether it can recoup some of the missing money from Deerwood's insurance policies.

And while the Times puts the loss at $96,000, district officials say the damage could be higher.

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