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Sunday, May 15, 2011

Judith Hederman, NYC DOE Director of Financial Operations, Resigns Under Investigation

Education Dept. official who oversaw $43M contract resigns amid corruption investigation
Juan Gonzalez - News, Friday, May 13th 2011, 4:00 AM

A Department of Education executive who supervised a major computer consulting firm that is under investigation for possible corruption has suddenly resigned.

Judith Hederman, the $168,000-a-year executive director of the DOE's division of financial operations, submitted her resignation on May 4, DOE officials confirmed.

That was the day the Daily News reported that Richard Condon, the schools' special commissioner of investigation, had filed court papers saying a "high-level" executive at the DOE with "oversight" over the $43 million contract of Florida-based Future Technology Associates, had a "personal relationship" with one of the owners of FTA.

FTA, which has not been charged with wrongdoing, is under investigation for "potential corruption and conflict of interest," the court papers say.

An affidavit submitted by Condon's deputy, Gerald Conroy, as part of a court dispute over the agency's subpoena power, did not identify the DOE official. A source at the DOE has since confirmed it was Hederman.

The affidavit said the unnamed official, who was interviewed under oath on April 14, initially denied having a personal relationship with either of FTA's owners, Tamer Sevintuna or Jonathan Krohe.

Four days after that interview, the official's lawyer called Condon's office and retracted the original denial of a personal relationship.

Hederman worked at the DOE since 1995. For nearly two years, until last November, she supervised the FTA contract.

She did not respond to phone calls and email requests in the past week for comments. Sevintuna and Krohe have repeatedly declined to respond to questions.

For more than a year, Condon's office has been probing a web of companies that Sevintuna and Krohe secretly controlled and utilized as subcontractors for themselves, including two that supplied consultants in Turkey and India to service the DOE computer system remotely.

FTA's contract bars the company from subcontracting or using outside consultants, and officials say the firm never told them about the practice.

Some of the Turkish workers, The News has found, were paid as little as $3,370 a month by a separate firm Sevintuna and Krohe owned in Turkey, yet FTA billed the DOE $22,400 a month for the labor of those workers. At least six were still on the DOE payroll as recently as March.

Nearly two years ago, The News began asking DOE officials about the unusual aspects of the agency's contract with FTA.

For example, the firm has never had any established offices, even though it has supplied as many as 80 consultants at a time to the DOE and has received close to $100 million from the school system over the past decade.

FTA headquarters in Jacksonville, Fla., is a mailbox in a UPS store. So is a second address in Brooklyn.

Another FTA subcontractor, MERA consulting, which received $14 million from the DOE contract, was wholly owned by Krohe. MERA's main address was another mailbox in the same Florida UPS store.

Only weeks after Condon's investigators began asking questions about MERA, Krohe dissolved the company.

Much of this appears to have happened while Hederman was supervising the contract. Hederman is gone, but the probe continues.

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Pay for each of the FTA employees is equal to that of Schools Chancellor Joel… Computer geeks at Future Technology Associates earn more than Joel Klein does
Wednesday, July 29, 2009

Taxpayers shelled out an average of $250,000 last year for each of 63 computer consultants a little-known Florida-based firm supplied to the Department of Education.

That's more than $15.7 million of our money going to Future Technology Associates, which landed a DOE contract in 2005 - the same year the company was founded. The company's job is to integrate the school system's financial accounting system with other city agencies.

That contract began at $2.5 million a year. Since then, it has been repeatedly extended - mushrooming to $15.7 million in fiscal year 2009

Story from The New York Post:

Schools $candal gal quits

by SUSAN EDELMAN and YOAV GONEN, May 13, 2011

The Department of Education's chief of financial operations has quit amid a probe into her relationship with a contractor under investigation for overbilling, sources told The Post.

Judith Hederman, executive director of the Division of Financial Operations, was making $168,000 a year when she abruptly resigned last week, according to education officials.

The Office of the Special Commissioner of Investigation confirmed that it is investigating Hederman, 42, but declined to provide further details.

Court records show that the commissioner has been engaged in a lengthy probe of Future Technology Associates, a computer consulting firm that Hederman had overseen and shared offices with since as early as 2005.

FTA has a three-year, $43.2 million contract to integrate the DOE's payroll and finance system with that of the rest of the city's agencies.

Documents show the probe of the firm involves "allegations of corruption, conflicts of interest, unethical conduct or other misconduct."

That includes accusations that FTA has been hiring its workers through multiple contracts so that the "hourly fee for the consultant's services was marked up before being passed on to the DOE."

However, the breadth of the probe was so wide that a Manhattan Supreme Court judge granted a petition by the co-owners of FTA, Tamer Sevintuna and Jonathan Krohe, to quash a subpoena requiring them to appear before probers.

City officials are still challenging that determination.

Hederman's husband, also is a highly paid DOE accountant, when reached by phone said his wife had no comment.

She joined the DOE in April 1992 as an accountant and was a payroll administrator when FTA landed its first contract in 2005.

She was also listed as the contract manager when the firm signed its latest three-year deal.

A lawyer for Sevintuna declined comment, and Krohe's lawyer was unavailable.

The allegations against FTA echo recent charges filed against another DOE contractor, Willard (Ross) Lanham, who allegedly bilked the city of $3.6 million by using layers of subcontractors to jack up costs.

Additional reporting by Andy Campbell and Dareh Gregorian