Consultant Stole $3.6 Million from Schools

April 28, 2011 Updated: August 15, 2011

NEW YORK—Special Commissioner of Investigation for the New York City School District Richard J. Condon revealed on Thursday that consultant William Lanham stole $3.6 million from the Department of Education (DOE) while overseeing the installation of the Internet in the city's schools.

Contractors IBM and Verizon were complicit in the scheme and profited from it, says Condon.

With the DOE’s money, Lanham placed consultants from his private company, Lanham Enterprises, Inc. at Verizon and IBM. Through his lawyer, Landham is claiming he did nothing wrong and saved the DOE "at least $10 million," according to NY1 News.

Verizon profited more than $800,000 from the deal. It was awarded the multimillion dollar contract by Lanham on the condition that it hire specific subcontractors, which also in turn hired Lanham's consultants.

IBM and Verizon executives were well aware of the scam and did not report it, but rather continued to facilitate it, reports Condon. Both IBM and Verizon have said that they would cooperate with authorities, according to reports.

Schools Chancellor Dennis Walcott has said reform is necessary concerning how consultants are used in the school system. Manhattan Borough President Scott Stringer acknowledged that this is a hopeful sign, but still laments the waste of funds in a time of great fiscal need.

“At a time when the Department of Education is still threatening to lay off more than 4,000 teachers, it is extremely distressing to learn that the department can’t seem to keep track of its own contractors—or the money they spend,” declared Stringer in a statement.