Convicted: Varnett Public School Founder and Husband Will Do Time
ABOVE: Source photo by: Dylan Aguilar, Houston Chronicle
When will we learn?
The more we talk about the increased efforts of federal authorities to crack down on greed, fraud and corruption across the United States, especially as it relates to the microscope they seem to have on African Americans in the city of Houston, we find yet another prominent African American couple has found themselves in the crosshairs of the federal government and has plead guilty to a major federal crime.
In a case the Forward Times has been following since 2015, we have learned that the founding superintendent of The Varnett Public School, Dr. Marian Annette Cluff, 69, and her husband, Alsie Cluff Jr., 69, have both agreed to separate plea deals after initially pleading ‘not guilty’ to a 19-count indictment returned against them by a federal grand jury just two years prior – a federal indictment with alleged charges of conspiracy, mail fraud, tax evasion and obstruction justice.
According to the plea agreements, Marian pleaded guilty to two counts of Conspiracy to Commit Tax Evasion and Mail Fraud, while Alsie pleaded guilty to Conspiracy to Commit Tax Evasion, with the couple agreeing to pay $4,443,755.69 in restitution prior to sentencing. As part of the plea agreements, Marian has also agreed to a maximum sentence of up to 10 years in prison for both counts, while Alsie has agreed to a maximum sentence of up to 3 years in prison.
So how did we get here?
Alsie Cluff Jr. served as the facilities and operations manager, while Dr. Marian Cluff founded and was responsible for the complete oversight of The Varnett Public School’s three campuses, which were located in Northeast and Southwest Houston.
The 2015 federal indictment alleged that the Cluffs embezzled in excess of $2.6 million in funds intended for the operation and function of the charter school and its programs. The federal indictment also charged the couple with tax evasion, alleging they did not pay income taxes to the IRS of approximately $851,845, not including interest and penalties, on the money they received as a result of the scheme.
The federal indictment alleged that the Cluffs used their positions of trust and authority to embezzle money from The Varnett Public School by opening four “off-books” accounts (bank accounts not directly tied to the financial operation of the charter school) in a name similar to the school. The Cluffs were the signatories of the four accounts, according to the federal indictment, and only used the “off-books” accounts for the purpose of diverting money intended for the charter school for their own personal use and benefit. According to federal authorities, Marian and Alsie allegedly concealed the “off-books” accounts from the office manager at The Varnett Public School, as well as from the school’s external accountant and their income tax preparer.
The federal indictment also stated that the Cluffs embezzled more than $1 million from “money orders” submitted by parents of the students to pay for school field trips and student fundraisers, such as chocolate sales, book fairs, school carnivals and other school related activities. Additionally, federal authorities claimed that the Cluffs allegedly diverted and concealed money received from vendors of the school, insurance companies and federal agencies into the “off-books” accounts. In a separate false invoicing scheme also charged in the federal indictment, federal authorities claimed that the Cluffs directed The Varnett Public School’s building maintenance and landscaping contractor to submit false invoices to the school for payment on work that was never actually performed. The federal indictment alleged that The Varnett Public School paid invoices totaling more than $115,000, and that Marian allegedly instructed the contractor to return the money by writing checks from the contractor to her personally, which she then deposited into her personal bank account. According to the federal indictment, she then told the contractor to make a false statement to the FBI stating that the money was for a “loan” and that she had paid the contractor back in cash.
If the Cluffs would have gone to trial and were convicted of either mail fraud or obstruction of justice, the couple would have faced up to 20 years in prison, while they would have faced a possible five-year federal prison sentence for the conspiracy and tax evasion charges, with a possible $250,000 fine.
The federal indictment of the Cluffs came as the result of the investigative efforts of the FBI, IRS-CI and the U.S. Department of Education-OIG, who stepped in after the Texas Education Agency first dispatched investigators to The Varnett Public School back in March 2011, to look into what they believed was questionable activity, such as American Express statements that showed roughly thousands of dollars spent at a jewelry and souvenir store at Walt Disney World and more than $700 charged at a luxury spa, and much more.
The Cluffs had built up a number of assets, which included a nearly 10,000-square-foot Riverside-area mansion with a two-bedroom carriage house that sat on nearly two acres of land and was appraised at $1.7 million at the time of their indictment, as well as a ranch in Oregon.
This is a huge fall from grace for the founder of a charter school that was widely celebrated and highly-recognized across the state of Texas, and her husband.
Not only is Marian a two-time Greater Houston Black Chamber Pinnacle Award winner (1996 and 1998), but in 2011 the chamber inducted her into the Pinnacle Hall of Fame, and in 2013 the chamber presented her and The Varnett Public School with the Pinnacle Endurance Award.
After growing The Varnett Public School to a burgeoning three-campus institution – going from a privately-run institution for 14 years, to becoming a large taxpayer-supported charter school that primarily served low-income students – the couple finds themselves facing significant jail time from a federal judge who will be determining their sentence in the upcoming months.
The Forward Times will continue to monitor this federal case and update you on the sentencing of Dr. Marian Annette Cluff and Alsie Cluff, Jr. Stay tuned!