Detroit schools sue firm for millions

DETROIT (AP) — Detroit’s public school district is suing a school contractor that it says charged the impoverished district millions of dollars to start an employee wellness program but did little work.
Bank records show that Associates for Learning was spending lavishly at a luxury car dealership, upscale stores and on a stay in the Cayman Islands — all while collecting millions from the school district, the Detroit Free Press reported.
Detroit Public Schools obtained the records as part of its lawsuit against the company and its four founders — Sherry Washington, a prominent downtown Detroit art gallery owner; Dr. Gwendolyn Washington, a Southfield physician; along with  Detroit business consultants Sally Jo Bond and Marilyn White.
DPS contends the company provided few services in return for the multimillion-dollar payments it received between October 2005 and September 2006.
The company’s bank account routinely was debited for expenses ranging from mundane purchases such as gas, groceries, a car wash and manicures to luxurious expenses.
Those expenses, according to papers filed in the case,  including spending thousands at Louis Vuitton, Nordstrom and Marshall Field’s.
According to the lawsuit, Sherry Washington and her three partners sold the district on a pilot wellness program.
 The company promised to educate roughly 3,000 district employees on the benefits of a healthy lifestyle for $150,000.
But by 2006, payments to Associates for Learning had ballooned to $3.32 million even though fewer than 150 workers had taken part in a health-assessment survey that was key to the company’s proposal, according to the district’s lawsuit.
Software for the survey cost the district another $1.4 million, the suit said.
Sherry Washington referred questions about the investigation to her lawyer, Jeffrey Collins of Detroit, who did not return the Free Press’ repeated calls.
Collins also represents Gwendolyn Washington.
This is not the first time Sherry Washington has been tied to questionable DPS payments.
In February 2007, the Free Press reported that officials overseeing Detroit’s impoverished schools purchased $1.6 million in art from her gallery.
Court records indicate that federal authorities are now investigating her, one of her partners and Stephen Hill, the school official who approved the payments.
Collins said in a December court filing that a federal prosecutor has indicated both Sherry Washington and Gwendolyn Washington were targets of a federal investigation.
“The government contends the evidence they have against Sherry Washington and Gwendolyn Washington is compelling,” Collins wrote.
“The threat of criminal charges is real and imminent,” Collins added.
DPS also is alleging that Hill, the former head of risk management for the district, accepted as much as $30,000 in kickbacks from Washington’s group.
The district’s claims against Associates for Learning are part of a larger lawsuit that alleges that Hill and his assistant, Christina Polk-Osumah, diverted more than $57 million in improper wire transfers to a dozen vendors, including Associates for Learning.