The Maricopa County Community College District has agreed to pay $4 million to the federal government, settling a whistleblower case that accused the district of theft and fraudulent use of service-learning grants and awards.
The settlement stems from when Christine Hunt, while employed at Paradise Valley Community College, witnessed a colleague forging signatures and overstating students’ volunteer hours. This allowed students and the district to receive millions of dollars in federal grant money under an AmeriCorps program, according to documents in the U.S. District Court, District of Arizona that were recently unsealed.
That led to a federal investigation and lawsuit, which was filed three years ago. The district was named as a defendant, along with Paula Vaughn, Paradise Valley’s former director of service learning, and her husband Richard Vaughn, who was also a college employee.
Prosecutors alleged the fraudulent activity took place, by way of Paula Vaughn’s instructions, for about three years starting in 2007.
Last week, the district agreed to settle for $4 million and did not admit liability.
“Paradise Valley (Community College) is paying more than half of that itself,” district spokesman Tom Gariepy told KJZZ.
He directed all other questions to Paradise Valley, where an official provided a written statement from college President Paul Dale.
“Throughout the investigation, the college cooperated fully with the government and expressed our willingness to make AmeriCorps whole,” Dale said in the statement. “Stewardship is a core value of our college, and we are committed to responsibly managing the assets and resources entrusted to us. We take the public trust and confidence very seriously, and strive to act accordingly. We will continue to take all appropriate actions to ensure those standards are maintained.”
The issue stemmed specifically from Project Ayuda, which awarded students educational stipends through AmeriCorps for completion of a certain amount of community service hours. The district also received a set amount of money for each participating student.
However, investigators alleged Vaughn instructed students to submit timecards for hours worked that did not qualify under Project Ayuda.
“Taxpayers are justifiably outraged when a community fails to receive promised services because national service funds were misused,” Deborah Jeffrey, inspector general for the Corporation for National and Community Service, which oversees AmeriCorps, said in a prepared statement released Monday by the U.S. Department of Justice. “We hope that this settlement will deter other grantees from similar misconduct.”
The district must pay the $4 million to federal government within 30 days, according to the settlement agreement obtained by KJZZ.
Of that money, Hunt will receive $775,827 under the False Claims Act, according to the DOJ statement.
KJZZ is licensed to Rio Salado College, which is part of the Maricopa Community College District.
