College's Ex-President Pleads Guilty to Fraud
Tuesday, May 2, 2006
The former president of Morris Brown College, a historic black school in Atlanta, pleaded guilty yesterday to embezzling millions of dollars in federal funds from the government and students, the climax of a financial debacle that caused the school to lose its accreditation.
Delores Cross, 69, who led the school from November 1998 until February 2002, pleaded in federal court in Atlanta to one court of illegally obtaining student loans, allowing her to avoid a trial and more than two dozen other counts she was confronting.
"I will always regret what happened, and I apologize to the students, the faculty and the staff of Morris Brown College," Cross said in a statement through her lawyer.
According to the 2004 indictment, $3.4 million in federally insured student loans and Pell grants were fraudulently obtained in the names of ineligible students -- some who never attended the college, some who were enrolled part time and others who had already left. It was never alleged that Cross personally benefited from the scheme, but that the money was used to pay bills at the strapped school. Ultimately the students found themselves responsible for loans they never requested.
"The Morris Brown College family is elated that this sad chapter in the college's history has come to closure," said Getchel L. Caldwell, vice president for institutional advancement at the school. "We are looking forward to building a new foundation."
Parvesh Singh, a former director of financial aid at the college, pleaded guilty last week to one count of theft of federal funds, admitting to fraudulently securing more than $92,000 in government loans for students whom he was aware were not attending the school. As part of his deal, Singh, 64, was committed to testify against Cross.
Had Cross gone to trial on the single count, she could have faced up to five years in prison and a $250,000 fine. Prosecutors are asking for up to 16 months in jail.
Under the agreement, she will pay $11,000 in restitution.
"Dr. Cross is relieved . . . this ordeal is over," said her lawyer Drew Findling, reading a prepared statement. "She hopes that ending the prosecution will assist Morris Brown in regaining its accreditation."
The 125-year-old college, which counts civil rights leader Hosea Williams and Pulitzer Prize-winning author James A. McPherson among its alumni, is still in a tenuous situation. It has gone from a robust campus of 2,000-plus students to an enrollment of 66 this year, with nine instructors. Students are no longer eligible for financial aid. Recently a group of students filed a lawsuit asking a judge to remove the board of trustees for breaching its fiduciary duty.
Prosecutors say that the mismanagement that devastated the school also hurt the credit ratings of students who only found out about the loans years later when they tried to obtain credit. The school is also fighting lawsuits brought by former students, and other suits stemming from the financial woes.
Caldwell said the school intends to reapply for accreditation -- which requires the institution to have a balanced budget for three years -- in 2009. It has $25 million in long-term debt.
He said both the alumni association and the African Methodist Episcopal Church, which founded the school in 1881, have promised to help the school rebound.
"We will have 107 students in the fall," Caldwell said. "That's how many students were enrolled when the school was founded. We're definitely going to make it."