Varnett charter school founders sentenced to prison, ordered to pay $4.4M in restitution

June 15, 2018 GMT

Comparing them to villians from a Charles Dickens novel who steal from the poor, a federal judge on Friday sentenced Varnett charter school founders Marian Annette Cluff and Alsie Cluff Jr. to 10 years and 3 years in prison, respectively, for running an embezzlement and tax scheme that bilked low-income parents.

U.S. District Judge Melinda Harmon rejected requests for mercy from the Cluffs, who stood side-by-side as Harmon sentenced them to the maximum allowed under their plea agreements. The married couple has admitted to siphoning $2.6 million from the school — nearly half of which came from parents — over several years, using the money to furnish their 7,000-square-foot south Houston mansion, travel the world in a private jet and purchase high-end clothing and jewelry. They also failed to disclose the income to the IRS, ultimately racking up $1.8 million in unpaid taxes, interest and penalties.

Following a nearly-five-hour sentencing hearing, during which former employees and parents lamented financial losses to the Cluffs, Harmon criticized the couple for “grinding away and pinching and stealing” from their victims.

“It’s just got to be giving in to pride and greed,” Harmon said.

The couple also has been ordered to pay $4.4 million in restitution. The Cluffs have set aside $1.6 million to date. They are hoping to sell their Houston estate in the coming weeks, using the proceeds to pay back victims and the IRS.

The Cluffs founded the Varnett school in 1984 as a private institution, converting it to a taxpayer-funded charter network in 1998. Marian Cluff, 70, served as the school’s superintendent, while Alsie Cluff Jr., 69, worked as vice president and treasurer.

In the decade leading up to their indictment, the Cluffs made far-above-average salaries and profited off business dealings through their charter school, which served about 1,600 predominately low-income students at three campuses across Houston. During an eight-year period, they reported about $12 million in income tied to Varnett through their salaries, real estate transactions and transportation company.

A Texas Education Agency investigation in 2013 found the school’s leaders and governing board engaged in pervasive conflicts of interest and spent extravangantly on cruises, airplane tickets and spa services.

In a statement to Harmon, Marian Cluff, described as the leader of the scheme, said she regretted her actions and accepted responsibility. She said she “didn’t harm the children” and exposed students to a strong education at a quality school.

“I’ve been an embarrassment to my family, to my grandchildren, to my own children, to the community. I regret the decisions that I made. My decisions were not reflective of my upbringing.”

Prosecutors, however, said the Cluffs scammed families that often scraped by financially, pocketing money given to the school by parents for field trips, fundraisers and other events. Two parents described how the Cluffs even charged parents a few dollars each Friday to allow their children to forgo wearing school uniforms.

“How could they sleep at night knowing what they did to these people? If they do, it’s because they don’t care,” Assistant U.S. Attorney Quincy Ollison said.