Feds indict Shahadey, Fennell in Vigo Co. School Corp. kickback scheme

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UPDATE 10/4/17-​  Frank Shahadey appeared in federal court in Indianapolis yesterday, where he was sentenced to 16 months in prison with two years of probation following a plea agreement on charges of theft an wire fraud in connection to the Vigo County School Corp. kickback scheme. Frank Fennell has rejected a plea deal and his trial is set for Dec. 11.

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By Lucy Perry
Indiana Central News​

A former Vigo County Sheriff's Office deputy -- who also served as a Vigo Co. School Corp. security adviser -- and  a former VCSC facilities director embezzled, stole or obtained by fraud at least $80,000 in funds, out of around 58 questionable projects between spring 2014 and fall 2016, according to an indictment issued today by a federal grand jury.

​The two  suspects named in the VCSC kickback scheme scandal -- Frank Shahadey and Franklin Fennell ---  were indicted  on several counts related to financial fraud.

Nine  of the counts outlined in the documents today include those based on payments issued from the VCSC to a tree service business owner. Two additional counts allege Fennell and Shahadey misused funds issued from federal programs to the school corporation and that they also obtained personal property with the money. Fennell faces an additional count of making false statements during the investigaiton.

The following is a list of itemized checks from the VCSC to the tree business for the nine fraud charges, according to the U.S. District Court of Southern Indiana  documents.

1.June 23, 2014 – $18,800 check
2.Feb. 23, 2015 – $7,300 check
3. April 20, 2015 – $7,300 check
4. April 20, 2015 – $12,800 check
5. June 22, 2015 – $26,400 check
6. Nov.16, 2015 – $17,000 check
7. April 25, 2016-- $21,338
8. June 17,,2016 – $33,700 check
9. Oct. 24, 2016 – $3,100 check
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According to the report, Fennell and Shahadey allegedly directed the tree service business owner to submit false and fraudulent estimates and invoices by inflating the cost of the work or seeking payment for work that was never performed.or work performed or the work was performed , but not by a vendor approved by the VCSC.

Fennell reportedly submitted the invoices to the school corporation business offfice for payment after awarding contracts to the business. Payments were deposited ino the business owner's account, which he then reportedly withdrew cash from, handing multiple kickback payments to Fennell and Shahadey over time. 

Shahadey remains held in a Kentucky jail and Fennell was released after his initial court appearance  Nov.1.

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