Five indicted in North Chicago bus kickback scheme

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Gloria Harper

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Updated: July 15, 2011 2:33AM

CHICAGO — A former North Chicago Unit School District board member and the district’s former transportation director were indicted Thursday on federal fraud charges for allegedly receiving kickbacks totaling at least $800,000 from school bus contracts over about 10 years.

A total of five defendants were charged in a 26-count indictment alleging that, between 2001 and August 2010, they defraud the citizens of North Chicago and the 4,000-student District 187 of the honest services of former school board member Gloria Harper and former transportation director Alice Sherrod, according to the U.S. Attorney’s Office.

Harper, 59, of North Chicago, a member of the school board from 1999 to May 2009; and Sherrod, 59, of Gurnee, District 187’s transportation director from 2001 to July 2010, used their positions to solicit and accept gifts and cash from the three co-defendants in exchange for favorable action regarding school bus contracts totaling about $21 million, the indictment alleges.

Harper and Sherrod initially received initial kickbacks of $4,000 to $5,000 a month, but by 2003, were collecting up to $20,000 a month, the indictment alleges.

Also indicted were Derrick Eubanks, 47, of Lake Villa; Tommie Boddie, 66, of Wadsworth; and Barrett White, 52, of Matteson.

All five were each charged with six counts of wire fraud and various counts of soliciting or paying bribes. All but White were also charged with multiple counts of filing false federal income tax returns.

They will be arraigned at later dates in U.S. District Court in Chicago. The indictment seeks forfeiture of more than $9.67 million, as well as 48 buses and vans, and seven personal automobiles.

Lake County Regional Superintendent of Schools Roycealee Wood said it is unusual for school board members to get indicted and she felt sorry for the district.

“The district is struggling right now,” she said. “They have a new superintendent and a new board president,” referring to a December decision by the school board to agree to an intergovernmental agreement for a state-appointed liaison to help oversee the decisions and operations of the district.

According to authorities, from the late 1990s until mid-2003, District 187 contracted with outside firms for bus services, including T&M Transportation, owned in part and controlled by Boddie, and Eubanks Transportation, owned at least in part and controlled by Eubanks.

In 2001, Harper and Sherrod met with Boddie and told him they would arrange for the district to increase the number of students T&M transported if Boddie agreed to pay them in return, and Boddie agreed, the indictment alleges.

At Harper’s request, White began acting as an intermediary or “bagman,” receiving cash from Boddie, keeping some for himself, and providing the bulk to Harper, who shared it with Sherrod, according to the indictment.

The fraud involved several companies over the years until May 2003, when Harper allegedly suggested to Boddie and Eubanks that they join together to form one company to bid on the bus contracts. Both Harper and Sherrod told Boddie and Eubanks that if they won the contract, they would have to split the profits with the two school officials, and the two men agreed, the charges allege.

As a result, Boddie and Eubanks created Safety First Transportation, which won the District 187 transportation contract in 2003. Once Safety First began to receive school district payments, White allegedly converted Safety First’s funds into cash to pay Harper for her to share with Sherrod, while White kept a portion for himself.

After an IRS audit of Safety First in 2006-07, Safety First listed White as an employee and a contractor, though his only job was to pay kickbacks as an intermediary, according to federal officials.

In April 2008, the defendants agreed to set up a new company, Quality Trans, to replace Safety First and assume its contracts.

All five allegedly agreed to split Quality Trans’s profits, and Boddie, Eubanks and White continued to make cash payments to Harper and Sherrod, the indictment alleges. In June 2009, Quality Trans won a five-year contract to provide the district with transportation services.

Harper is no stranger to federal court. She was arraigned on 18 counts of forgery in in 2009 with another defendant stemming from the falsification of a North Dakota school official’s name on company invoices in a scheme to overbill a school district for technological services.

The federal government sued her company and won restitution of $241,000. Harper was given 12 months supervision and 50 hours of public service. She successfully completed her sentence Jan. 15, 2010.