Special Needs Educational Co. Rips Off School Districts in N.J.

[Guest guest]

Education exec admits overbilling districts

Firm that trained special needs kids received $1.3 million extra, AG says

Tuesday, June 03, 2008

BY JIM O'NEILL

Star-Ledger Staff

The head of a company that provides educational and vocational training to

special needs students in as many as 60 districts in New Jersey is facing three

to five years in prison after pleading guilty yesterday to a charge of

overbilling taxpayers more than $1.3 million.

Ellyn Lerner, 56, of Long Branch admitted a single count of corporate

misconduct, saying she bilked the districts between July 1, 2001, and April 19,

2004.

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As president and CEO of High Road Schools of New Jersey Inc., located in the

Parlin section of Sayreville, Lerner told employees to undertake billing

practices that illegally increased the amount of claims for services above a 2.5

percent profit permitted by state Department of Education billing

regulations, authorities said.

She also admitted billing and collecting $250,000 to purchase books and

computers that were shipped to out-of-state districts that also use services

provided through High Road Schools and Kids 1 Inc., an affiliate that since has

changed its name to Specialized Education Services Inc. and no longer conducts

business in New Jersey.

State Attorney General Anne Milgram credited detectives Kukis and

Donlan of the state Division of Criminal Justice Corruption Bureau with

gathering evidence to uncover the costly scam.

Lerner " fraudulently enriched her corporations by $1.3 million at the expense

of New Jersey school districts and students, " Milgram said in a statement.

" We will vigorously prosecute such cases to ensure that our education dollars

benefit students, not corrupt corporate operators. "

Under the plea agreement reached between Deputy Attorney General J.

Brass and defense attorney Kipnees, Lerner avoids trial, but must divest

herself from High Road until she completes her criminal sentence. She also

must pay a $50,000 fine.

Attorneys also noted in court that the woman could seek admission to a

special probationary program that could mean her release from custody in nine

months or less. Lerner remains free until she is sentenced in New Brunswick on

Oct. 3.

During a hearing in the Middlesex County Courthouse, Brass detailed the plea

agreement to Superior Court Judge Mulvihill. Brass also said High Road

has agreed to make restitution on the full $1.3 million, and has already

repaid $912,000.

Lerner, appearing nervous, answered affirmatively to a series of questions

posed by her attorney, admitting she directed employees to follow a deceitful

billing practice. Outside court, her lawyer described the overbilling

practices as errors.

Page 2 of 2

" The purchasing practice errors Ms. Lerner made regarding the New Road

Schools of New Jersey solely benefited the students and school and did not

result

in any personal gain, " Kipnees said in a statement.

He said his client " dedicated her career to providing ... the best education

possible " to children with special needs.

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Brass said schools contract for special education services through the state

and pay the state education department, which channels the funds to High

Road.

High Road subsequently submitted bills to the state, and collected amounts

under fraudulent billing practices that increased its reimbursable costs and

profits, Brass said.

He said High Road provides education services for as many as 60 school

districts in New Jersey, and has schools located in Parlin, lin Township in

Somerset County, and in Toms River. During the time the state was improperly

billed, High Roads also had a school in Lodi in Bergen County, but that

facility since has closed, authorities said.

Brass said most of the public schools that had been cheated were located in

and around the counties where High Road offered educational services.

In 2007, High Road changed its corporate name to New Road Schools. The names

of the three remaining schools also were changed to reflect the New Road

name.

Jim O'Neill may be reached at joneill@... or (732) 249-5670.

" Ms. Michele "

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