Brantley Thomas pleads guilty to federal charges

Former Berkeley County School District Chief Financial Officer Brantley D. Thomas pleaded guilty last week to 20 federal charges stemming from an embezzlement scheme involving more than $800,000 in district funds.

Thomas entered his plea in U.S. District Court in Charleston on Jan. 16. According to court documents, he pleaded guilty to one count of fraud and embezzlement from a federally funded program, nine counts of money laundering, and 10 counts of honest services wire fraud. He also agreed to make full restitution in an amount to be determined by the court at the time of sentencing, and to cooperate fully with the government in identifying all victims.

Additionally, as outlined in the general provisions of the agreement, “the defendant agrees to be fully truthful and forthright with federal, state and local law enforcement agencies about all criminal activities about which he has knowledge.”

As per the court order, Thomas must submit to polygraph examinations as requested by the government. Any self-incriminating information provided by Thomas as a result of his cooperation “will not be used against him” in determining the applicable guideline range for sentencing, the documents continued.

The illegal transactions mentioned in the federal filing took place between 2010 and 2016. According to the indictments, investigators believe Thomas used a number of methods to carry out his scheme, including overpaying district vendors and then depositing the reimbursement money into his personal account for expenses such as paying off car loans, membership at a private club and foreign travel.

“It’s very sad that individuals would intentionally steal from children and even more terrible when he is stealing from special education funds,” stated Attorney Josh Whitley, who is serving as BCSD’s legal counsel.

Thomas is also facing a series of charges at the state level. The first indictment by the State Grand Jury was issued on Oct.17, followed by a separate indictment on Nov. 15. Both were unsealed on Dec. 6. Thomas first began working for the district in 1993. He was terminated from his post as chief financial officer (CFO) in February of 2017 after an investigation into the case was launched. While CFO, he was tasked with managing more than $400 million in district expenditures. He faces 14 state counts for embezzlement and one for forgery. On 10 occasions, Thomas is accused of depositing district dollars into his personal credit card account or personal checking account, with varying totals ranging from $3,771.25 in September of 2005 to $36,934.50 in December of 2009. According to a press release on the charges issued by the office of State Attorney General Alan Wilson, Thomas “converted public school funds to his personal use, by causing BCSD to disperse funds which supposedly were to pay legitimate BCSD expenses.”

Sentencing for the federal charges is expected to take place within two to four months, stated Whitley. Thomas could face more than 300 years in prison if sentenced the maximum amount of time for each count.

The state charges could result in up to 135 years of jail time. A timeline for that case has not yet been determined, said Whitley.

“The state grand jury appears to be digging as deeply as they can to follow all evidence and leads,” he added. “I expect their investigation will take significantly longer than the federal case.”

BCSD TAKE LEGAL ACTION AGAINST THOMAS AND INSURANCE ENTITIES

On Friday, Jan. 18, just two days after Thomas entered his guilty plea on the federal charges, the Berkeley County School District filed a $42.5 million lawsuit against Thomas and several insurance entities for their alleged role in defrauding “the District and its children out of tens of millions of taxpayer dollars over the course of many years,” according to the complaint filed in U.S. District Court. Named as defendants, in addition to Thomas, are Hub International Limited, Hub International Midwest Limited, Hub International Southeast, Knauff Insurance Agency, Inc., Stanley J. Pokorney, and Scott Pokorney.

According to court documents, Thomas and the other defendants are accused of fully concealing their schemes,” and that the wrongdoings were not discovered until after February 2017, when officials from the Federal Bureau of Investigation (FBI) and Wells Fargo Bank met with officials at the district and informed them that Thomas was under investigation for misappropriation of funds.

Investigators believe Thomas worked in concert with Hub; Hub’s predecessor, Knauff; and Pokorney, who served as an officer in both corporations. Pokorney served as the district’s insurance consultant and broker since at least 1993, stated the legal filing.

“During this period and at least since 2001, Thomas, Pokorney, and other agents of Knauff and Hub conspired and engaged in multiple schemes in which Thomas helped the Insurance Defendants secure contracts to broker insurance policies for the District and conduct insurance reviews, in exchange for which they paid Thomas illegal kickbacks in the form of cash, expensive hotel accommodations and dinners, and elaborate spa treatments.”

Marni Gordon, director of corporate communications for HUB International Limited, provided the following statement regarding the lawsuit:

“HUB first learned of the criminal investigation when it was contacted by the authorities last year. HUB fully cooperated with both the State Grand Jury and the U.S. Attorney’s office. At no time has either suggested to HUB that HUB had knowledge of, or participated in the alleged scheme. This is consistent with HUB’s internal investigation which found no evidence that HUB had any knowledge of the alleged scheme.”

According to Gordon, HUB is one of many brokers that sells insurance to school districts in South Carolina.

“Our review of the policies purchased by the Berkeley School District verified that those policies were and are consistent with what we and other brokers have sold to similarly situated school districts in South Carolina and were in no way excessive,” she stated.

Through the court action, the Berkeley County School Board of Trustees is seeking “compensatory, treble, and punitive damages, along with attorneys’ fees and costs, for the tortious conduct of these fiduciaries, who lined their pockets at the expense of the children of Berkeley County for at least 15 years,” stated the suit.

“The board wants to hold all wrongdoers responsible and to recover as much money as possible for the children of the district,” added Whitley.

The Daniel Island News also reached out to Matthew Hubbell, Thomas’s attorney, but did not hear back by the time the paper went to press. In previous articles, Hubbell has stated that Thomas is cooperating with authorities.