Financial Fraud: Marian Annette Cluff And Alsie Cluff Jr. Pleaded Guilty To Mail Fraud And Conspiracy To Commit Tax Evasion
Charter School Victims to Receive More Than a Half-Million in Restitution
Announcement comes on the heels of National Crime Victims Rights Week
HOUSTON – More than 4,000 parents who had entrusted their children to administrators at the Varnett Charter School are set to receive payments totaling more than $600,000, announced U.S. Attorney Ryan K. Patrick along with Special Agent in Charge Perrye K. Turner of the FBI, Special Agent in Charge Neil Sanchez from the Department of Education – Office of Inspector General (ED-OIG) and Acting Special Agent in Charge Sarah Kull of IRS – Criminal Investigation (CI).
Marian Annette Cluff, 70, was the founding superintendent of The Varnett Public School, a charter school with three locations in Houston, while her husband – Alsie Cluff Jr., 69, was the facilities and operations manager. They pleaded guilty Aug. 25, 2017, to mail fraud and conspiracy to commit tax evasion charges for embezzling millions of dollars from the school.
In June 2018, U.S. District Judge Melinda Harmon sentenced Marian Cluff to 120 months imprisonment and to pay a $295,596 fine, while her husband was ordered to serve a 36-month term of imprisonment and pay a $88,678 fine. More importantly, however, was that both were also ordered to pay a total of $4,443,755.69 in restitution.
In less than a year following the sentencing hearing, the Financial Litigation Unit (FLU) of the U.S. Attorney’s Office – with the substantial assistance of the U.S. Marshal Service (USMS) – collected the total restitution ordered in the case.
In an amended order issued in March 2019, U.S. District Judge Andrew S. Hanen ordered that $604,889.76 of that amount be distributed to the identified victim parents of the school. The U.S. District Clerk’s Office has indicated that restitution payments to the parents will be handled on an expedited basis.
At the time of the sentencing, the court heard that the couple embezzled millions of dollars in funds that were intended for the operation and function of the charter school and its programs. These included “money orders” parents had submitted to pay for school field trips and student fundraisers, such as chocolate sales, book fairs, school carnivals and other school-related activities.
The Cluffs used their positions of trust and authority and diverted and concealed money received from vendors of the school, insurance companies and federal agencies into the off-book accounts for the purpose of diverting money intended for the charter school for their own personal use and benefit. The Cluffs concealed the accounts from the charter school office manager, the school’s external accountant and their income tax preparer.
Testimony at sentencing also revealed the Cluffs conspired to commit tax evasion of approximately $1,827,477.55 in tax, interest and penalties owed to the IRS. The Cluffs did not pay income taxes on the money they received as a result of the scheme.
The Cluffs were ordered to surrender to the U.S. Bureau of Prisons in August 2018 and are currently serving their sentences.
Today’s announcement comes as National Crime Victim Rights Week (NCVRW) draws to a close. Every April, the Office for Victims of Crime leads communities throughout the country in their annual observances of NCVRW. This year’s theme – Honoring Our Past. Creating Hope for the Future – celebrated the progress made by those before us as we look to a future of crime victim services that is even more inclusive, accessible and trauma-informed.
The Department of Justice’s Mega Victim Case Assistance Program (MCAP) has also conducted research in this case to identify the current addresses for parents of former students. If your child attended the Varnett Public School between 2007–2014 and you have not received any correspondence from the U.S. Attorney’s Office, please contact the Victim Witness Unit at 713-567-9445.
The FBI, IRS-CI and Ed-OIG conducted the investigation. ED-OIG, USMS, FLU, U.S. District Clerk’s Office and MCAP worked collectively to assist in the restitution matter.
Assistant U.S. Attorney Quincy L. Ollison prosecuted the criminal case.