By Diane C. Lore | firstname.lastname@example.org on April 29, 2014 at 11:51 AM, updated April 29, 2014 at 11:53 AM
STATEN ISLAND, N.Y. -- A former Department of Education executive from Staten Island was fined by the city's Conflict of Interest Board, three years after she resigned from her post
amid an investigation into her relationship with a contractor, according to a New York Daily News report
The Conflicts of Interest Board fined former DOE finance boss Judith Hederman,
45, $1,000 for giving inside information to a consultant, who was also her lover, the News reported, citing information in documents released Monday.
His company, Future Technology Associates, reportedly did more than $74 million in tech consulting for the department from 2006-2009.
Ms. Hederman approved a $60,000 increase in Krohe's management fee, according to the News report. Krohe was already making $200,000 per year to lead a group of consultants the Education Department hired to create an online purchasing system for school principals, the report said.
According to the documents cited by the News, Ms. Hederman, who now works in the private sector, admitted she gave Krohe inside information about his contracts with the city on multiple occasions between 2006 and 2009.
Conflicts of Interest officials told the News that Ms. Hederman's fine "would have been substantially higher had she not suffered the loss of her job, income, and reputation" due to the scandal.
Neither Ms. Hederman nor Krohe was ever charged with a crime.
by lax oversight and a personal connection, the owners of a technology firm
stole at least $6.5 million from the city's Education Department by vastly
overstating how much they paid their workers and submitting false documents to
city agencies, the special investigator for the New York City school system
charged in a report issued on Wednesday.
also accused the official, who was then executive director of the Education
Department's Division of Financial Operations, of helping to enable the fraud
by giving the firm, Future Technology Associates, access to confidential
information. She also had a ''close personal relationship'' with one of the
owners, the investigators found.
loyalty was to him, not to the Department of Education,'' Richard J. Condon,
the special commissioner of investigation, said in an interview. ''And she was
in an important position.''
Condon described how the official, Judith Hederman, sent a text message to
Jonathan Krohe just before and after she had spoken with investigators, and
tipped him off repeatedly to concerns about the firm's conduct.
accusations against Future Technology Associates are the latest in a series of
embarrassing reports of theft by highly paid technology consultants hired by
the Bloomberg administration. As was intended with CityTime, the city payroll
system that federal prosecutors say was bled by corrupt consultants of $80
million, Mr. Krohe, 35, and the other owner, Tamer Sevintuna, 50, were hired to
improve the management of city finances -- in this case, by building an online
ordering system for school principals.
findings were forwarded to local and federal prosecutors for ''whatever action
they deem appropriate,'' Mr. Condon's office said. The city also said it would
try to recover any fraudulently obtained money.
Krohe, Mr. Sevintuna and their firm could not be reached for comment, nor could
April, federal prosecutors charged that Willard Lanham, a consultant, had
stolen $3.6 million over six years that was part of a billion-dollar
school-wiring and Internet-access project.
Hederman resigned in May, but the problem of oversight went well beyond her,
investigators said. Other officials responsible for overseeing the contract
failed to do so and did not know its basic terms. ''The D.O.E. cannot allow
consultants to have free rein over D.O.E. projects that cost millions of
dollars,'' Mr. Condon said in his report. ''D.O.E. officials who are charged
with oversight of the projects must be held accountable for failing to
Technology Associates received more than $74 million over five and a half years
from the Education Department to set up the electronic ordering system for
principals and to integrate the department's financial system with other city
agencies' systems. Mr. Condon began his investigation in 2009 after The Daily
News wrote a series of articles alleging possible improprieties.
found the firm had subcontracted with other firms it owned to hire low-paid
consultants in India and Turkey, although it was required to use workers in New
York and it billed $110 an hour for their services. In all, Future Technology
Associates is accused of fraudulently billing at least $6.5 million to the
department between 2007 and 2011.
firm also lied about its experience to get the no-bid contract in 2005, and
falsely denied that it owned the firms to which it was subcontracting, the
report said. Mr. Krohe also submitted $74,000 in expenses to entertain clients,
though the Education Department appeared to be the only client, according to
the report. Questioned by investigators, department officials who had eaten at
the firm's expense said they had reimbursed it in cash.
as evidence of the relationship between Ms. Hederman and Mr. Krohe,
investigators reported that the two had stayed together at the Mandarin
Oriental hotel in Washington, traveling on the Acela train apparently for a
weekend getaway, and exchanged thousands of phone calls and text messages. But
even among other Education Department officials, basic questions -- like why
roughly one-third of the employees the firm had on its books in Brooklyn never
showed up to the office (they were in Turkey and India instead) -- went unasked.
allegations against the firm first surfaced, the city defended its work.
Officials cut short the contract in June as evidence of fraud mounted. On
Wednesday, Natalie Ravitz, a spokeswoman for the city schools, called the
scheme ''a staggering web of deceit by the owners of Future Technology
To avoid future problems, Ms. Ravitz said, the department
has adopted new safeguards in its contract management process, including one
Mr. Condon recommended, an automatic review prompted by cost overruns.