A grand jury has handed down indictments related to misuse of funds and other charges related to construction procurements for the Elona Ranch and Sossaman middle schools in the Higley Unified School District.
The list of charges consists of:
Denise Birdwell, former HUSD superintendent, 18 felony counts for “procurement fraud, fraudulent schemes and practices, fraudulent schemes and artifices, misuse of public monies, conflict of interest, filing a false return, and conspiracy”;
Gary Aller, co-owner of Education Facilities Development Services, three felony counts for “fraudulent schemes and practices, fraudulent schemes and artifices, and conspiracy”;
Steven Nielsen, co-owner of EFDS, three felony counts for “fraudulent schemes and practices, fraudulent schemes and artifices, and conspiracy”, and
Kay Hartwell Hunnicutt, a close associate of Birdwell, three felony counts related to filing false returns.
A report following an investigation by the Arizona Auditor General was crucial to the indictments. The investigation covered May 2012-2016 and shows an ongoing fraud scheme.
The report alleges, at Birdwell’s instruction or with her knowledge, Higley staff provided EFDS with information about the district’s project development services procurement.
The indictment alleges EFDS received a competitive advantage in the procurement bidding process. Despite participating in the procurement process, EFDS was awarded contracts, which is prohibited by law. When the contracts were awarded, Birdwell, Aller and Nielsen allegedly signed project documents stating the awards were in compliance with state and district rules.
Birdwell also allegedly approved the misuse of $6M in Adjacent Ways funds, which are restricted to safe access and exiting of school properties, to be used for facilitating private bond funding. According to the Auditor’s report, Birdwell denied knowledge of the Adjacent Ways funds’ use, then later claimed it was an appropriate use after being presented with a copy of her wire transfer authorization.
The 18 counts in Birdwell’s indictment include seven counts of conflict of interest, claiming she had a substantial interest in payments from vendors to the district, including CORE Construction and architects Hunt & Caraway. These payments were allegedly deposited into a bank account Birdwell co-owned with Hunnicutt. She also is accused of accepting $43K in indirect payments from Hunt & Caraway, $1K from Hunt & Caraway’s former president and $2,500 from CORE Construction.
After leaving HUSD, Birdwell was employed as superintendent at Scottsdale Unified School District, where she continued her relationship with Hunt & Caraway. The firm was hired for design services following voter approval of a $229M bond in 2016.
SUSD documents show Birdwell failed to disclose her personal interest with the firm and was allegedly paid $15K by Hunt & Caraway in January 2016. The district dismissed Birdwell roughly two years into her tenure, following an internal investigation into alleged district and state policy violations.
The Auditor General’s report can be found here. A copy of the indictments is available here. (Source)