A Manhasset man who pocketed millions off falsified financial statements he submitted to various government agencies for the funding of special education programs he ran in New York City accepted a plea agreement on Friday, prosecutors said.
Cheon Park, who received kickback payments from employees of his company, Bilingual SEIT, which provided classes and services to preschoolers with special needs, pleaded guilty to a mail fraud charge in Manhattan federal court.
Park faces up to five years and three months in prison and will pay $2.15 million in restitution to the New York City Department of Education and an additional $1.92 million to the federal government. He will be sentenced on July 29.
From 2005 to 2012, Bilingual SEIT received $94.5 million from the federal government, and the state and city education departments, prosecutors said.
Prosecutors said a joint investigation across multiple law enforcement levels found that Park, 46, submitted documents misrepresenting the roles several of his employees had with Bilingual SEIT and engaged in kickback schemes with them after paying their salaries.
To receive funding, Park was required to file annual consolidated fiscal reports and corresponding audited financial statements detailing to the city and state education departments the company’s costs during the previous year.
Prosecutors said the education departments used these documents to determine the proper funds per student to pay Bilingual SEIT for its services.
In June 2011, state Comptroller Thomas DiNapoli’s office audited Bilingual SEIT to determine whether financial reports that Park filed from July 2007 through 2009 were calculated properly.
In July 2012, DiNapoli concluded in a report that nearly $1.5 million in costs that Park documented in financial statements during that two-year period should have been disallowed by the by the state, including payments to 26 employees whose work hours could not be substantiated.
After the report was released, the city department of education cancelled Bilingual SEIT classes and did not renew its contract with the program.
Prosecutors said that in addition to receiving kickbacks, Park used Bilingual SEIT funds for his personal use, arranging for the program to pay his ex-wife and ex-sister-in-law for work they never actually did.
According to consolidated financial statements Park filed, Park’s ex-wife served the program from 2006-12 as its assistant executive director, the second most senior position with Bilingual SEIT and among the program’s highest-compensated employees.
Park’s ex-wife was actually just an office worker, prosecutors said, and his former sister-in-law never actually worked for the company.
Park also allegedly arranged for the program to pay for the tutoring of Park’s children and for a Bilingual SEIT employee to clean Park’s home twice a week.
Reach reporter Bill San Antonio by e-mail at firstname.lastname@example.org, by phone at 516.307.1045 x215 and on Twitter @ bill_sanantonio. Also follow us on Twitter @theislandnow and Facebook at facebook.com/theislandnow.