Additional charges filed against former New Media Technology School officials

Add bank fraud to the list of federal charges facing Ina M. Walker and Hugh C. Clark, two former charter school officials in Philadelphia who allegedly stole public funds to cover private expenses.

Walker, former chief executive officer at the New Media Technology School, and Clark, the public school’s former board president, were charged Tuesday with defrauding the Wilmington Savings Fund Society (WSFS), a federal savings bank.

The pair was previously indicted for allegedly using taxpayer dollars slated for NMTS’s Cedarbrook and Germantown campuses to help fund a small private school, three businesses and personal expenses.

Details of the indictment

This week’s superseding indictment, count 28 in the case, centers on a business loan WSFS awarded to Walker in July 2006 that was never repaid. Walker requested the $357,500 loan to purchase a commercial property in Mt. Airy.

Walker owed WSFS approximately $339,000 in loan repayments.

According to the indictment, Walker and Clark allegedly hatched a “scheme” to obtain the loan from the Delaware-based bank in order “to house their failed business venture, the Black Olive restaurant,” at 22-24 E. Mt. Airy Ave.

The pair allegedly presented WSFS with two fake lease agreements that included “false or forged signatures” of renters and overstated the “rental cash flow of the business”; misrepresented the “rental status” and “income cash flow” of the property owned by Walker and occupied by Clark; and misrepresented Walker’s finances on a fake tax return.

Thomas A. Bergstrom, Walker’s attorney, said Wednesday that he was not surprised by the latest charge against his client, adding that it doesn’t dramatically alter the case.

“It’s still a small tail wagging a big dog,” said Bergstrom of the indictment. “The main case is still the charter school case.”

He said the additional loss of funds could translate into a harsher sentence.

Clark’s attorney could not be reached for comment.

The back story

In February, a U.S. District Court judge awarded WSFS $354,379 after Walker did not respond to the civil suit that first accused her of defaulting on the business loan.

Walker and Clark will be re-arraigned Dec. 1, said Bergstrom. They are scheduled to appear in U.S. District Court Jan. 9. Both pleaded not guilty following April’s 27-count indictment.

In that initial document, Walker and Clark were charged with conspiracy, wire fraud and theft from a federally funded program.

Walker and Clark, who co-founded New Media Technology, allegedly stole $522,000 allocated by the School District of Philadelphia to operate the school.

Those funds were allegedly used to help finance Lotus Academy, a private school in Germantown that Clark founded, a health-food store, the Black Olive restaurant and a web-based business that Clark created. The two also allegedly used New Media money to cover meals and credit card bills.

Clark, who also founded Lotus Academy, oversaw Lotus’s and New Media’s finances at the same time, according to court documents.

Walker, who held an “unpaid” executive position at Lotus while heading New Media, had signatory authority with both school bank accounts.

As a result of the missing funds, New Media did not contribute to employee pension funds from December 2007 through February 2009, according to court documents. At times, there wasn’t enough money to cover employee paychecks.

An investigation, launched by the School District’s inspector general in 2008, put the school on the cusp of losing its state charter.

Instead, the School Reform Commission forced Walker and Clark to resign from their positions at New Media in December 2009. The SRC required the school hire a new CEO and completely replace its board, among other mandatory conditions.