Gateway High School embezzlement probe reveals trail of lavish spending, fraud

AURORA | “Hi, my name is Jazmin Lopez and I am the Dean of Students at Gateway High School in Aurora, Colorado,” the GoFundMe page created during the COVID-19 pandemic read. “A new school year is underway for my students and the transition to remote learning has presented new challenges with inequitable access to technology at home due to financial reasons.”

People who donated to Lopez’s campaign believed that they were raising money to purchase laptops for underprivileged students at Gateway, where over 71% of students qualify for free or reduced-price lunches. Others thought they were helping pay athletic fees for student athletes or purchase gifts that would brighten students’ holidays.

But according to an internal audit from Aurora Public Schools and a police investigation, the money donated in those fundraising campaigns never reached students. Instead, it was allegedly spent by former Gateway Principal Ronald Fay and former secretary Jill Watkins, who are now facing charges of embezzling more than $100,000 from the district.

According to an Aurora Police Department report obtained by the Sentinel, the pair spent money that had been donated to the school on items including designer bags for employees, a variety of flights and vacations, expensive staff meals and personal items.

Fay is facing charges of embezzlement of public property, a Class 5 felony; tampering with physical evidence, a Class 6 felony; and theft, a Class 6 felony, according to Aurora police records. Watkins is facing charges of embezzlement of public property, a Class 5 felony, and theft, a Class 5 felony.

The alleged crimes took place between October 2019 and June 2021, the police report said. Fay became principal of Gateway in summer 2019, having previously worked at Rangeview High School. He brought a number of his employees with him, including Watkins, who had been his bookkeeper at Rangeview.

The police report suggests that Fay and Watkins may have undertaken similar activities while at Rangeview. 

Fay retired abruptly right before the beginning of the 2021-2022 school year, and Gateway started the year with an interim principal. At the time, district representatives did not answer questions from the Sentinel about what led him to retire.

In an email, district spokesperson Corey Christiansen said that the district immediately launched an internal investigation after learning about the allegations of mismanagement and contacted the Aurora Police Department, which launched its own investigation.

“We have multiple policies and protocols in place to ensure that funding is used appropriately to serve Aurora Public Schools students,” Christiansen said. “We do not tolerate misconduct and hold staff to high standards. We work to fully investigate complaints and concerns. In this case, the actions of the two former employees are appalling. We remain committed to upholding high standards for all employees.”

The APS audit also included an investigation of claims that Gateway employees were given money in exchange for changing students’ grades. This claim was not investigated by police.

The audit did not find evidence of financial compensation in exchange for grade changes but did find that many teachers at the school said they felt pressured to change grades. The school is at risk of state intervention because of consistent academic underperformance. Staff told auditors that an investigation of the grade situation overseen by the district’s then-Chief Academic Officer Andre Wright was insufficient.

Gateway is one of three APS schools currently being monitored by the State Board of Education for its implementation of a board-directed improvement plan. In 2019, the school contracted with external management partner Communities in Schools to help improve student academic achievement. In 2021, it switched to working with Zero Dropouts LLC after Communities in Schools decided to leave.

In a February mid-year progress monitoring assessment, the Colorado Department of Education found that 56% of the school’s 1,400 students were on track to graduate, a slight decrease from the past year. The assessment noted that the school had seen “substantial staff turnover” in the past year.

Wright, who left the district in 2021, is currently one of three finalists in the APS search for a new superintendent. At a meet and greet with district parents on Wednesday, he denied any wrongdoing and described previous TV news reports on the situation as “irresponsible journalism.”

APS school board president Debbie Gerkin said that to her recollection, the board was not aware of the police report at the time they were selecting finalists for the superintendent search.

Investigation focuses on two Gateway administrators

An investigation compiled by Aurora police in 2022 reports the evidence prompted them to ask prosecutors to charge Fay and Watkins for their alleged theft of Gateway funds.

Eric Ross, a spokesperson for the 18th Judicial District Attorney’s Office, said that there is an open investigation currently being reviewed by the office’s economic crimes unit. No decision has been made yet on whether to file charges.

Officers were first notified of the situation in early 2022, when APD was contacted by an internal auditor from the school district, who investigated the allegations of embezzlement. APS said it had received an anonymous tip in June of 2021 that Fay and his secretary were embezzling money at Gateway, and the district launched an investigation.

Fay and Watkins allegedly diverted money from a number of sources into an account through Alpine Bank, a Colorado-based bank. This account was in violation of district policy and had not been approved by the school board, the report said. The pair also transferred money into a Venmo account that only they could access.

According to the report, Fay and Watkins referred to the Alpine Bank account as the “offshore account.”

Money was embezzled from several different fundraising campaigns for students, the report said. This included the #GoTogether campaign, a fundraiser set up by the school to support athletics during the pandemic; Adopt an Athlete, a fund to help student athletes pay their athletic fees that was donated to primarily by Gateway staff; Shop with an Oly, a program to provide students in Gateway feeder schools with meals, gifts and clothing during the holiday season and Workout For a Cause, a GoFundMe campaign set up by an employee to purchase laptops for students.

“Funds from these campaigns were paid to the Venmo account which then transferred funds to the Alpine Bank account,” the report said. “It was discovered that funds collected from the fundraisers were not used as intended, rather they were used for personal spending, staff gifts, Rotary Club memberships, a drone purchase, a staff holiday party, staff baby shower, travel, and other miscellaneous purchases.”

APS hired an outside firm, BDK CPAs and Advisors, to conduct a forensic audit of the spending. The audit found that Fay and Watkins had spent more than $100,000 of donations and taxpayer money intended for the school, the report said.

The money was spent on a number of big-ticket items, many of which had scant or no connection to the school, the report said. Purchases included designer Tory Burch bags given to female Gateway employees as gifts, designer jackets for administrators, a retirement party at a restaurant that totaled over $2,000 including a $725 tip and other expensive purchases. Auditors calculated the cost of the tip at 43% of the cost of the meal.

The money was also allegedly used for a number of trips, including a $1,900 golf trip that Fay took to Austin with another Gateway employee, who told investigators he thought Fay had paid for it out of his own pocket. Watkins told the BDK auditors that the trip was in order to visit the University of Texas, but the other employee said that neither he nor Fay ever went. The trip was during a time period where APS employees were not allowed to conduct business travel due to the COVID-19 pandemic.

Fay also allegedly used the money to go on another golf trip with his wife to Oakland and on a trip for Fay and several other employees to Dallas, which was allegedly to visit Southern Methodist University and discuss school rebranding efforts.

Over the course of about two years, the report said there were 286 transactions from the Alpine account.

“The money raised and placed into the Alpine Bank account was considered school funds and public money,” the report said. “All the funds were donations from outside sources to Gateway High School, to be used to, or through the school, for the benefit of the students either as a group, or as individuals.”

The theft left Gateway employees, many of whom described to auditors a challenging working environment under Fay, struggling with how to react. While some quickly agreed to press charges, the report describes others as struggling with how to move forward.

Lopez, the Dean of Students who created the laptop fundraiser — the biggest donor to which was her own boyfriend — told investigators that she never found out where the funds went. Another woman who donated to the Adopt an Athlete campaign felt torn about pressing charges because though she knew what he had done was wrong, Fay was a mentor to her.

A third former employee, a witness to the case, told investigators she had left public education entirely. She said she just wanted “to close that chapter on her life.”

The report said that Watkins allegedly spent money from the account on a significant number of small-dollar personal expenses, including food, purchases from stores such as Bath & Body Works, Ulta and Old Navy that she told investigators were the result of her “mistakenly grabbing the wrong card from her wallet,” gift cards, veterinary services for her dog and three bottles of wine totaling $459 that were given as gifts to staff.

Gateway also received $60,000 from the district to hire a student engagement advocate that was never brought on board. According to the APS audit, Fay received approval from Wright in August 2020 to transfer the money from the District’s Division of Equity in Learning fund to create a one-year position. However, the audit said there is no evidence the hire was ever made and that instead the money was used for things including golf equipment, a chartered trip to a state football game and local restaurant gift certificates.

At the April 12 meet and greet, Wright said that as chief academic officer he was not responsible for managing the day-to-day budgets of schools. He suggested that in the future, if money has been approved for a position and it has not been filled in a certain number of days, a report should be automatically generated and transmitted to the supervisors of the person in charge of hiring.

Beyond theft, allegations of grade changing

The BDK audit also detailed a situation where Gateway employees raised concerns that some students’ grades had been changed in order to get them enough credit to graduate. The district conducted its own investigation into these claims, the findings of which were not included in the audit.

The audit said it found no evidence of an allegation that some staff were accepting money in exchange for improving students’ grades. However, a number of teachers the auditors interviewed said that they felt pressured by Fay to boost grades.

One teacher interviewed “stated that he felt a lot of pressure from Dr. Fay to change grades,” and that he felt that Fay “cared more about numbers than the kids.”

As APS chief academic officer at the time, Wright oversaw the district investigation of more than 400 grade changes at Gateway. The audit said that when APS employee Katrina Dainko attempted to speak to Gateway employees for the investigation, she received resistance and heard from others that Fay was telling people not to speak to her.

She then asked Fay to help her, and he responded by sending teachers emails asking if they changed grades, and to only respond yes or no.

“Ms. Dainko stated she felt pressure from Mr. Wright to not follow up further on the grade changes, so she accepted the email communications as support without any additional contemporaneous support from the time the grade change was made,” the audit said.

Any grades for which she did not receive documentation, she changed back to the original letter. The audit said that it did not find any evidence that teachers were being paid to change grades.

Neither Fay nor Wright agreed to be interviewed by the auditors.

At the meet and greet, Wright defended his actions, saying that he and the team of district officials investigated the allegations for six months. He said that over half of the grades in question had actually been changed to Fs, not increased.

“There was no benefit for children,” he said. “In fact, the children failed.”

He held up copies of a memo regarding the investigation, saying it was “convenient” that it hadn’t been leaked to the press as well as the police report. He declined at the time to go into further detail. 

Probe uncovers additional issues

The audit also found that eight different people held the position of Climate and Culture Coordinator, which allowed them to be paid a higher salary. Several of these people were coaches at the school. According to the district’s salary schedule coaches receive a stipend of $6,000, but this position allowed them to receive a minimum salary of $80,000.

“During the interviews, we asked several individuals, including those that held this title about their understanding of the position and its responsibilities,” the audit said. “None of the individuals could clearly explain the position.”

Other teachers and coaches were pushed out or pressured to leave, the audit said. One teacher told the auditors that Fay demeaned some teachers’ appearance, calling one “fat,” and that there was a general atmosphere of ridicule and harassment.

After initially being placed on paid leave while the investigation was ongoing, Fay resigned from APS in July 2021.

An allegation of tampering with physical evidence stems from allegedly deleting data from a school district laptop and iPhone that he returned to the district upon leaving. According to the report, both devices had been restored to their factory settings, and the APS IT department could not retrieve any data from either.

“BDK’s digital forensics team believed the act was an intentional act to destroy or delete all the data off the devices,” the report said.

APS school board president Debbie Gerkin declined to detail what this means for district policy going forward.

“We’re letting that take its course,” she said of the criminal investigation.

Asked whether the district needs improved safeguards to prevent situations like this from reoccurring, Gerkin said that the policies in place are what led to the fraud being uncovered in the first place.

“Of course it’s heinous,” she said. “You don’t want $100,000 — you don’t want a dollar — missing from accounts that are meant for children. And that’s why we went forward with the investigation.”