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Chicago-based charter chain will pay $4.5 million to end federal corruption probe

Nov. 9, 2020
Prosecutors had accused Concept Schools Inc. of rigging bids related to E-rate subsidies for technology

A charter school chain based in the Chicago area has agreed to pay $4.5 million to end a long-running federal corruption investigation, the U.S. Department says.

WBEZ Radio reports that Concept Schools Inc., which has four campuses in Chicago and dozens of other charter schools in the Midwest, was accused of engaging in a bid-rigging scheme to steer federally funded technology contracts to insiders.

In a statement this week, the Justice Department said Concept officials engaged in non-competitive bidding practices when they awarded contracts from the government’s E-rate program, which subsidizes technology enhancements in schools.

Concept has denied wrongdoing. The nonprofit organization is based in Schaumburg, Ill., and runs 30 charter schools in Illinois, Wisconsin, Michigan, Minnesota, Indiana and Ohio.

In announcing the settlement, the Justice Department accused Concept of giving its E-rate business to “chosen vendors without a meaningful, fair and open bidding process” and alleged the charter operator paid those vendors “higher prices than those approved by the [federal government] for equipment with the same functionality.”

And some of the equipment the federal government acquired for Concept for was “discovered missing,” the Justice Department asserted.

Concept officials say they have been the subject of unfair allegations of wrongdoing from “foreign actors." The chain is run by Turkish immigrants and has faced criticism from the Turkish government for several years.

Turkey says Concept and other charter school networks in the United States “were created to siphon public, taxpayer funds away from the education of children in order to finance the international political activities of Fethullah Gulen, an exiled Turkish cleric residing in the State of Pennsylvania.”

Court filings state that Turkey “has initiated an investigation within its own borders to determine whether the proceeds derived from these illegal activities in the United States are being unlawfully transported and transmitted to individuals in Turkey in violation of Turkish criminal law, including international money laundering and fraud.”

Attorneys for Concept and its schools have sought to block the Turkish government’s legal efforts here. They argued they are not affiliated with Gulen and have been the target of an “attempt to engage in further harassment and persecution of perceived political opponents,” court records show.

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