Partial verdict in charter trial: Two acquitted

PHILADELPHIA After five weeks of testimony about phantom board members, fabricated documents, and forged signatures, the federal jury in the Dorothy June Brown charter-school fraud trial acquitted her two codefendants Thursday and indicated it was divided on the charges against Brown.

In a partial verdict after more than five days of deliberations, the jury said it had not reached agreement on any of the 60 counts against the 76-year-old Brown, who is accused of defrauding the four charter schools she founded of $6.7 million, and participating in a scheme to cover it up.

But the panel of nine women and three men acquitted her codefendants of conspiracy and obstruction of justice in connection with the alleged cover-up.

Michael A. Slade Jr. and Courteney L. Knight were each charged with conspiring to obstruct justice and two counts of obstructing justice. Slade, 32, Brown's great-nephew, is a suspended chief executive of one of her charters, Laboratory Charter School. Knight, 66, a teacher, was once the CEO at another.

Brown is charged with 48 counts of wire fraud, one count of conspiracy to obstruct justice, 10 counts of obstructing justice, and one count of witness tampering.

The outcome has implications for other pending cases. It is the largest of six fraud cases that the U.S. Attorney's Office has brought against city charter schools since 2005, and it was the first to go to trial. Defendants in the other cases, including Masai Skief, a former CEO of Harambee Institute of Science Technology, pleaded guilty. Skief is awaiting sentencing.

Sources have said federal authorities are investigating at least a dozen local charter schools.

Early Thursday afternoon, the jury foreman told U.S. District Judge R. Barclay Surrick that the panel had reached an impasse on some counts. According to a note that the judge read aloud, the foreman also said the jurors were "tense and defensive but are considerate of each other."

The foreman indicated the jury had not even begun reviewing evidence for some of the counts because they were connected to charges where they were deadlocked.

At that point, the panel returned to the jury room and quickly announced the Slade and Knight verdicts. Afterward, it deliberated for about 90 minutes before recessing.

The judge, noting scheduling conflicts on Friday and the impending holidays, dismissed the jurors until Jan. 6.

Slade teared up when he heard that he had been acquitted and later said: "I'm just glad to be cleared."

His attorneys said Slade will ask the board of Laboratory Charter to reinstate him as CEO.

Knight referred questions to his attorney, Robert J. Donatoni, who said: "I believe that this was absolutely the correct verdict, and we are very grateful to the judge and to the jury."

Knight, who is still employed by Laboratory Charter, will resume his job evaluating teachers.

Before the trial began, two of Brown's former employees pleaded guilty in connection with the case. They are scheduled to be sentenced next month.

Joan Woods Chalker, a longtime Brown employee and a former chief executive at one of the schools she founded, pleaded guilty to three counts of obstruction of justice.

Anthony Smoot, who handled the finances for Brown's schools for nine years, pleaded guilty in March to participating in a conspiracy to obstruct justice with Brown and the others, and to obstructing justice during the four-year federal probe.

During the trial, neither Brown nor her two remaining codefendants testified. Defense attorneys focused on the high test scores of the charters that Brown founded and sought to cast doubt on the prosecution's case.

In closing arguments on Dec. 11, William M. McSwain argued that federal prosecutors were so obsessed with how much money Brown made that they had to "make up a criminal scheme."

The government, McSwain said, filed so many counts "so it can try to keep the world safe from Dr. Brown."

"This is a case about the money she got paid. This is not about any crimes," McSwain said.

The government showed that during two years alone, Brown collected $4.27 million from the schools: $1.6 million in 2007-08 and $2.67 million the next year.

In her rebuttal, Assistant U.S. Attorney Joan E. Burnes urged the jurors to use common sense.

The case, Burnes said, was about fabricated contracts with Brown's two management firms with forged signatures that no charter boards had approved and that benefited Brown alone.

"Keep your eyes on the ball," she said. "The signatures are forged, and the contracts benefited one person."

Burnes reminded jurors that they had heard from several witnesses who described fabricating documents at Brown's direction, including Chalker, Smoot, and a former counselor who admitted forging the signature of her late aunt on a contract with one of Brown's management firms.

Brown founded three elementary charter schools in Philadelphia: Laboratory, with has campuses in Northern Liberties, Overbrook, and Wynnefield; Ad Prima, with campuses in Overbrook and Frankford; and Planet Abacus in Tacony.

She also established Agora Cyber Charter in 2005 but cut her ties with it in 2009 as part of a settlement involving several civil suits, including one involving the state Department of Education.