FORMER OWNER AND INSTRUCTOR FOR HEALTH TECH SCHOOL ADMITS CONSPIRING TO STEAL $1.4M IN PELL GRANT FUNDS

KANSAS CITY, Mo. --Steve Hill, United States Attorney for the Western District of Missouri, announced that the former owner and a former instructor for a now-defunct health vocational-technical school in Blue Springs pleaded guilty today to conspiring with others to steal and misapply more than $1.4 million in federal Pell Grant funds.

Kathryn L. Harmon, 51, and her daughter, Angela S. Case, 34, both of Blue Springs, waived indictment and pleaded guilty to single counts of conspiracy to misapply federal Pell Grant funds, in appearances this morning before Senior U.S. District Judge Scott O. Wright.

From 1982 to March 1997, Harmon was owner, president, CEO, financial aid director, bookkeeper and medical instructor for the Eastern Jackson County College of Allied Health, at 808 South 15th Street in Blue Springs, said Assistant U.S. Attorney Christina Y. Tabor, who is prosecuting the case. Case attended the school in 1984 and completed its dental assistant program, and in 1988 was employed as its placement director, Tabor said. From 1989 until the school closed in 1997, Case worked for the school as a dental assistant instructor, Tabor said.

The College of Allied Health operated from 1982 to March 1997, offering education and training for medical, dental and pharmacy assistants, Tabor said. A majority of students who enrolled at the school received federal financial aid, including Pell Grants, she said.

The objective of the Pell Grant program is to provide direct grants to help qualified undergraduate students finance their college education. Pell Grants are designed to assist economically disadvantaged students; eligible students who receive Pell Grants do not have to repay any of the funds to the government.

In the case involving Harmon and Case, an investigation showed that from 1992 to 1997, the College of Allied Health. received allocations of more than $1.7 million in Pell Grant funding to distribute to its students, Tabor said.

Of that amount, the investigation revealed that more than $1.4 million had been fraudulently obtained by the school from the federal government as a result of Harmon, Case and other co-conspirators forging and creating false documents and submitting fraudulent grant applications to the U.S. Department of Education for non-existent or non-eligible students.

A former pharmacy instructor for the school, Kalyne D. Miller, 37, of Blue Springs, pleaded guilty to the federal conspiracy charge on March 6, 2000, and currently awaits sentencing, Tabor said.

Through their guilty pleas, Harmon, Case and Miller admitted that a portion of the $1.4 million in stolen and misapplied funds was used to pay salaries and operating expenses at the school to keep it from closing because of low enrollment, Tabor said.

The rest of the fraudulently obtained Pell Grant funds were converted to the defendants' own personal use, Tabor said. Some of the fraudulently obtained funds were spent on jewelry, real estate, furniture and an automobile, she said.

As a result of their guilty pleas, Harmon, Case and Miller could each be subject to a maximum punishment of five years in prison without parole, plus up to $250,000 in fines. Harmon, Case and Miller are currently free on bond, pending sentencing to be scheduled sometime after the completion presentence investigations by the U.S. Probation Office.

The case is being investigated by the Office of Inspector General for the U.S. Department of Education, in cooperation with the U.S. Postal Inspection Service.