Former Scottsdale Unified School District CFO facing 11 felony charges

Former Scottsdale Unified School District Chief Financial Officer Laura Tenison Smith has been indicted by a state grand jury, Attorney General Mark Brnovich announced on May 14.

Laura T. Smith (photo by Scottsdale Schools)

Ms. Smith, 61, was indicted on the afternoon of Monday, May 14, Arizona Attorney General’s Spokesperson Mia Garcia confirmed, for allegedly breaking the state’s conflict of interest laws.

Ms. Smith is facing 11 felony charges, including two counts of fraudulent schemes and practices and eight counts of conflict of interest.

She served as CFO for less than one year, and resigned from SUSD on Jan. 26, amid the outcome of an ongoing internal investigation.

In December 2017, Gust Rosenfeld attorney Susan Segal publicly announced that she was investigating Ms. Smith’s conflict of interest with the district.

While employed as Scottsdale Unified School District’s CFO, Ms. Smith is accused of approving purchase orders and change orders for Professional Group Public Consulting, Inc., also known as PGPC. Both Ms. Smith and her sister had ownership interest in PGPC, according to the AG’s office.

The conduct is alleged to have taken place between February and October 2017.

Special Agents with the Arizona Attorney General’s Office and the Office of the Auditor General investigated the case, while Assistant Attorneys General Joseph Waters and Mary Harriss are prosecuting the case.

All defendants are presumed innocent until proven guilty in a court of law, the AG’s office noted in a press release.

In a copy of the indictment obtained by the Independent, the Arizona State Grand Jury’s accusations are dated May 8.

“When we go to a grand jury and the grand jury hands down an indictment it doesn’t become official until it’s officially served,” Ms. Garcia said. “It’s a secret until service happens.”

Ms. Smith’s two counts of fraudulent schemes and practices occurred on or about Feb. 24, 2017, and May 3, 2017, the document states. It accuses her of knowingly falsifying, concealing or covering up material by any trick, scheme or device, or making or using any false writing or documents knowing such documents contained false, fictitious or fraudulent statements.

Conflict of interest charges detail Ms. Smith, a public officer or employee of a public agency, knowingly had, or whose relative had, a substantial interest in any decision of a public agency failed to make known such interest in the official records of such public agency and failed to refrain from participating in any manner as an officer or employee in such decision. A number of purchase orders are included in the indictment.

In Ms. Smith’s January resignation letter, she states she allegedly signed three conflict of interest statements, and signed two change orders regarding purchase orders to compensate PGPC for services, calling it “an inadvertent mistake.”

Ms. Segal’s internal investigation into the matter showed that two conflict of interest documents were signed by Ms. Smith.

Ms. Smith’s resignation letter states her sister, Caroline Brackley, is also listed as a principal of the company.

“As you know, I completed three conflict of interest statements revealing my past relationship with the Professional Group,” Ms. Smith’s resignation letter states. “Although it is common knowledge in Arizona education circles that Caroline is my sister, I inadvertently erred in not also disclosing that on the conflict of interest forms. It was a genuine and innocent mistake.”

Ms. Smith goes on to say that she did not intentionally act to reward PGPC while serving as Scottsdale School’s CFO.

“I became chief financial officer in May,” she stated in the letter.

Ms. Smith was hired as CFO Feb. 15, 2017, district officials confirmed earlier this year.

“The Professional Group suspended my active ownership and participating on May 1, 2017 because of my new duties at the district,” she said.

“By the end of the month, my interest in the Professional Group was valued; the Professional Group board accepted my request to buy my interest.”

Ms. Smith says she mistakenly signed two change orders regarding purchase orders to compensate PGPC for services.

Northeast Valley News Services Editor Melissa Rosequist can be e-mailed at mrosequist@newszap.com or can be followed on Twitter at twitter.com/mrosequist_.

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