Indiana Attorney General Greg Zoeller’s office filed a lawsuit Monday against a Kentucky maintenance product company and a former school maintenance director at Warsaw Community Schools demanding repayment of nearly $1 million.
An audit accused them of an illegal bribery and kickbacks scheme that defrauded the school system.
"This is among the most egregious public corruption situations we have seen of a vendor fraudulently billing the taxpayers and a government employee gaming the system in order to enrich themselves," Zoeller said. "My office will do our utmost to claw back the funds the defendants misappropriated and return them to the school corporation so they can be put to their proper operational use."
The defendants in the suit are Continental Maintenance Specialties Inc. of Lawrenceburg, and Gregory A. Schroeder of Milford, the former director of maintenance for Warsaw Community Schools.
The lawsuit filed in Kosciusko County Circuit Court seeks $988,917.57.
Schroeder and the owner of Continental Maintenance were arrested in July. The charges filed against Schroeder accuse him of taking more than $100,000 in kickbacks during a six-year span and receiving a new motorcycle for continuing to buy items from the company.
The 61-year-old Milford resident faces felony charges of corrupt business influence, official misconduct, bribery and theft. He is out on bail.
Continental Maintenance Specialties sells specialty chemicals to schools, hospitals, nursing homes, government agencies and universities, according to its website. A special audit by the State Board of Accounts covered from 2006 to 2012.
As part of the investigation, auditors compared the volume of cleaning chemicals Schroeder purchased for Warsaw schools to the amounts the school facilities actually needed, consulting with maintenance personnel from other schools using similar products to determine usage. Schroeder spent $790,298.33 on 16,869 gallons of kitchen drain maintenance products when the maximum reasonable cost should have been $40,291, or 860 gallons. Schroeder made similar overpurchases from CMS of weed killer and cleaning products for automated cleaning machines for restrooms and shower rooms, resulting in excessive, unreasonable costs billed to Warsaw schools totaling $828,161.07 for the various chemicals, the audit said.
The kickbacks by Stowers and CMS included checks and money orders written to Schroeder and payments on a Harley-Davidson motorcycle made on his behalf, a news release said.