CHICAGO ― A former director of transportation was recently sentenced to 30 months in federal prison for receiving at least $566,000 in kickbacks in a nearly decade-long bus contracts scheme.
Alice Sherrod was the director of transportation for North Chicago Community Unit School District 187 from 2001 to 2010. She pleaded guilty to one count each of wire fraud and filing a false federal income tax return.
According to the U.S. Attorney’s Office for the northern district of Illinois, Sherrod received the kickbacks from three co-defendants who controlled several different transportation companies that received more than $21 million in student bus contracts.
Also allegedly involved in the fraud scheme was Gloria Harper, the former president of the North Chicago school board. The three transportation company officials funneled kickbacks totaling at least $800,000 to Harper and Sherrod and made more than $9.6 million in profits, according to the U.S. Attorney’s Office.
Harper and Sherrod were accused of secretly soliciting and accepting gifts and cash from their three co-defendants in exchange for favorable official action regarding student transportation contracts. Initially, Harper and Sherrod got kickbacks of about $4,000 to $5,000 a month, but by 2003 they were collecting about $20,000 a month, authorities said.
The 4,000-student North Chicago Community Unit School District 187 has one of the highest low-income populations in Illinois.
“Rather than looking out for the interests of the district’s taxpayers and the children who depended on the schools for education, Sherrod selfishly used her position to enrich herself, and then filed false tax returns,” Assistant U.S. Attorney Matthew Getter argued in the government’s sentencing memorandum.
In sentencing Sherrod on April 21, U.S. District Judge Sharon Johnson Coleman said the former director of transportation “was in a position of public trust that affected poor children. She did not think about who she was hurting.”
Coleman ordered Sherrod to serve her sentence beginning Aug. 31. The judge also ordered Sherrod to pay approximately $7.2 million in restitution.
All five defendants pleaded guilty last year and have now been sentenced. In addition to Sherrod’s sentence of 30 months, Harper received a 10-year sentence. Tommie Boddie got a one-day term of imprisonment followed by a three-year term of supervised release, including nine months’ home confinement. Derrick Eubanks received six months’ imprisonment. Barrett White got a one-day term of imprisonment followed by a one-year term of supervised release, during which he will spend the first six months serving weekend imprisonment.
From the late 1990s until mid-2003, North Chicago Community Unit School District 187 contracted with various companies for student transportation, including T&M Transportation, which was owned in part and controlled by Boddie, and Eubanks Transportation, which was owned in part and controlled by Eubanks. In 2001, Harper and Sherrod met with Boddie and allegedly agreed to arrange for the school district to increase the number of students that T&M transported in exchange for kickback payments.
According to the U.S. Attorney’s Office, in May 2003 Harper suggested to Boddie and Eubanks that they join together to form one company, Safety First Transportation Inc., which won School District 187’s transportation contract in 2003. Harper, Sherrod, Boddie and Eubanks allegedly agreed that they would split the profits from the contract.
After an IRS audit of Safety First in 2006-07, White, who authorities said had been acting as the “bagman” for the kickbacks, allegedly began receiving funds from Safety First as both an employee and a contractor, even though he provided little service other than being the bagman.
In April 2008, the defendants allegedly agreed to set up a new company, Quality Trans LLC, to replace Safety First and to assume its contracts with the school district. Prosecutors said that all five agreed to continue splitting profits from Quality Trans, and Boddie, Eubanks and White continued making cash payments to Harper and Sherrod.