Yeah, I found that one too, when I went looking... Here it is expanded out, for posterity's sake...
Counselor charged with fraud -- Prosecutors say Bob Gluhareff, owner of a school for troubled teens, padded the school's accountsPublisher: The News & Observer (Raleigh, North Carolina)
By: Toby Coleman
First published: August 06, 2006Federal prosecutors have charged a longtime Raleigh family counselor with bilking parents, the government and others in an effort to keep his faith-based school for troubled teens open.
Prosecutors claim Bob Gluhareff, 61, illegally padded Wellspring Academy accounts with more than $662,000 in bad checks -- including ones parents believed he would hold until they secured loans to cover them. Prosecutors also think he criminally misled parents into thinking they could claim some of the South Boston, Va., school's $49,000 tuition as a charitable donation.
Gluhareff called the 36-count federal indictment, unsealed Friday in Virginia, the result of a prosecutorial "witch hunt" stirred up by parents angered by his school's sudden closure three years ago. He is charged with tax, wire, mail and bank fraud; money laundering; and making false statements before a grand jury.
"The U.S. Attorney wanted somebody to pay," he said in an interview at his North Raleigh office Saturday. "They had to answer to those angry parents."
A few parents of former academy students have been calling for prosecutors and regulators to punish Gluhareff for more than three years.
"We're ecstatic," said Cindy Mitchell, a Youngsville woman who sent her son to the school and said she lost thousands of dollars when it closed. "Bob has a counseling service in North Raleigh, and I think that every parent that takes their child there should know about these charges."
Gluhareff opened Wellspring in 1986 on 510 acres outside South Boston, about an hour north of the Triangle. He started by recruiting troubled kids from the Raleigh area and eventually brought in children from across the country.
The school offered high school and two years of college instruction for boys ages 13 to 19. He promised parents their kids would be in a structured environment with Christian counseling and uniforms of khakis and polo shirts.
At its peak in 2002, the school had 90 students, 60 staff members and a nearly $3 million budget. "It was a very successful school," Gluhareff said.
Federal prosecutors claim that he struggled to keep his growing little school afloat for years. Gluhareff said the school did not start having budget woes until 2002.
Prosecutors believe that between 1999 and 2003, Gluhareff tried a series of financial maneuvers to keep his school chugging, including writing bad checks and cashing tuition checks that parents thought he would hold until they notified him that they had the money.
"Mr. Gluhareff took advantage of parents who were desperate to help their children," John L. Brownlee, the U.S. Attorney for western Virginia, said in a statement. "He was dishonest in his dealings with parents, banks and corporations."
Prosecutors claim, among other things, that none of the school's counselors were licensed in Virginia -- even though Gluhareff told parents that their kids would receive help from licensed counselors.
Gluhareff said the charges were ridiculous, in part because he says it would have been impossible for him to push enough bad checks through to hide significant financial problems in a multimillion-dollar organization.
He said it is possible that he could have cashed a parent's $25,000 nonrefundable tuition deposit check too fast. He also acknowledged that he told parents who paid his school's full $49,000 tuition that he would count $24,000 of their payment as a donation -- mainly because he figured that most of that money went to help pay for student scholarships.
He said that if he did anything wrong, it was "procedural" and that he never meant to break the law.
"What angers me more than anything else is that my wife and I gave everything to make this work," he said.
He talked about the federal charges against him Saturday afternoon, while sitting in the waiting room of his North Raleigh office. There was Christian art on the wall and a jar labeled "Warm Fuzzies" on the table to his left. He is free on $25,000 bond.
Gluhareff said he continues to blame a former school counselor, Lisa Grant, for Wellspring's collapse, and he has urged federal prosecutors to investigate her. Grant did not respond Saturday to an e-mail message.
Grant has said she quit the school in April 2003 amid budgetary problems: Staff pay had been cut and, according to court records, the school was not paying bills.
She took four students with her as she left, then called their parents and told them the school was going out of business. By the time Gluhareff had called the local sheriff's office to report that Grant had kidnapped the boys, the school phones were starting to buzz with angry parents. Word spread among the students, and soon some were refusing to wear their uniforms and threatening to start fires.
A few days later, Gluhareff closed the school. In a letter to parents, he blamed Grant, the economy and parents' failure to pay tuition on time.
He said he contemplated reopening the school, but never could come up with the money to pay off his creditors -- much less the parents who paid him tuition to help their troubled children.
"Sixty wonderful people lost their jobs, parents lost a half a million dollars of tuition," he said. "I cried for days."
He still lives near South Boston -- though he says he is too broke to own land. These days, he rents.
