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Monday, July 21, 2014
Search warrant reveals the details of the Horizon Science Academy FBI Raid
The recent FBI raid at the Des Plaines headquarters of Concept Schools focused on many of the politically connected charter-school operator’s top administrators and companies with close ties to Concept, according to federal documents obtained by the Chicago Sun-Times.
Authorities last month said FBI agents carried out raids at 19 Concept locations in Illinois, Indiana and Ohio as part of an “ongoing white-collar crime matter” but declined to provide further details of their investigation.
Copies of the search warrants that FBI agents served in Des Plaines and a subpoena seeking records show investigators went hunting for a wide range of documents pertaining to Concept president Sedat Duman, founder Taner Ertekin and other current and former executives of the fast-growing charter network.
The investigators also sought documents about companies that were hired by Concept to perform work under the federal “E-Rate” program, which pays for schools to expand telecommunications and Internet access.
Concept is linked to the Turkish cleric Fethullah Gulen, who lives in Pennsylvania, and has developed strong relationships with many local politicians, including state House Speaker Michael Madigan (D-Chicago).
Four of Concept’s 30 publicly financed schools are in Illinois, including the 600-student Chicago Math and Science Academy in Rogers Park and two campuses that opened a year ago in the Austin and McKinley Park neighborhoods. Chicago Public Schools officials approved another two Concept schools on the South Side for the 2014-15 school year.
For one of the two newest Concept sites, in Chatham, more than $528,000 in public funding was earmarked to pay rent for the coming school year to an arm of Fellowship Missionary Baptist Church. The church’s pastor, the Rev. Charles Jenkins, gave the invocation at Mayor Rahm Emanuel’s 2011 swearing-in and served on Emanuel’s transition team.
Work on the Chatham project stopped recently, although Ald. Howard Brookins – who initially supported the new school in his 21st Ward – said Jenkins told him federal authorities were probing an outside vendor of the charter network and “not investigating Concept itself.”
The federal documents obtained by the Sun-Times, however, reveal that the FBI is taking a close look at the operations of Concept.
Federal law enforcement authorities in Cleveland, who are leading the probe, sent a grand-jury subpoena to Concept on May 30. The subpoena gave the charter chain’s administrators until June 17 to provide a long list of records.
Concept did not receive the full time to turn over the records. Instead, shortly after 2 p.m. on June 4, a federal judge in Chicago approved three warrants to raid the charter network’s headquarters at 2250 E. Devon in the O’Hare Lake Office Complex.
Later that day, after normal business hours, agents arrived at the office park in Des Plaines where Concept has three suites.
The warrant gave agents the right to take any documents relating to Concept’s involvement in the E-Rate program as well as “all bank records,” “all general ledgers,” “all calendars,” “all documents related to employee travel” and “all telephone records, telephone lists and contact lists.”
At 9:29 p.m. on June 4, a Concept executive gave the key to a storage unit on Mannheim Road in Des Plaines to FBI agent Brian Murphy. From the storage unit, the agent seized “48 boxes of vendor records, business records and documents,” records show.
According to court records, investigators also were looking to take every record related to 13 Concept employees and companies. They included Duman, the current Concept president; chief information officer Huseyin Ulker, and Ertekin, who founded the charter chain in Ohio in the late 1990s. He now works in the United Arab Emirates, according to his online LinkedIn profile.
The warrant goes on to specify that the federal agents wanted “all personnel documents for Huseyin Ulker and Sedat Duman, including but not limited to documents reflecting their compensation packages.”
Among contractors mentioned in the warrant were:
•Advanced Solutions for Education of Schaumburg and company founder Ozgur Balsoy, who used to be administrator of a Concept-run school in Columbus, Ohio. The company was the consultant to Concept on applications for E-Rate funding, according to the federal program’s records.
•Arlington Heights-based Core Group Inc. and its president Ertugrul Gurbuz. Core is described in federal records as performing much of the work for Concept under the E-Rate program.
•Signature Maker Inc. of Hoffman Estates and president Ergun Koyuncu.
•Cambridge Technologies of Chesterland, Ohio and owner Stephen Draviam.
Balsoy and Koyuncu declined to comment Monday, Gurbuz did not return calls, and Draviam said he had been contacted late last year by FBI agents.
He said he provided records regarding E-Rate work his company performed for Concept more than five years ago, but the agents did not indicate the target of their investigation. The federal government's guidelines for E-Rate state that schools must choose companies to do work under the program through a "competitive bidding process" that is "open and fair."
Vicki Anderson, a special agent in the FBI’s office in Cleveland, declined to comment on the warrants.
At the time of the June 4 raids, Anderson had said all documents related to the investigation were sealed from public view. The Sun-Times obtained the warrants and other documents from the raid in Des Plaines through a state Freedom of Information Act request to Concept.
Concept officials have said they were cooperating with the investigation and would not make any further comment.