Arkansas School Administrator Pleads Guilty to Stealing More Than $230,000 Funds To Spend in Personal Shopping

According to a press release from the US Attorney's Office in the Eastern District of Arkansas, a former school district administrator in Little Rock, Arkansas, pled guilty to mail fraud Wednesday after spending more than $230,000 in school district funds on personal internet shopping costs.

From 2010 until 2019, Karen James, 48, was the Little Rock School District's adminsitrator of early childhood education and elementary literacy. The prosecution stated that James was given two credit cards to use to make purchases for the district's early childhood programs; the cards were made possible by state and federal funds.

School Administrator Uses Funds for Personal Benefit for over 4 Years

James had to sign many agreements declaring that the credit cards could not be used for personal transactions or that products purchased with the cards could not be delivered to a person's home address.

According to prosecutors, James spent more than $27,000 on 83 unauthorized PayPal purchases between August 2014 and August 2018. He also purchased nearly 2,500 items on Amazon, including clothing, makeup, knitting materials, pet products, and gift cards, totaling more than $199,200, and spent more than $4,000 on bath rugs, a recliner, and other home goods from Wayfair.

James spent $230,635.86 on personal costs using the district credit cards throughout the four years. By tracking individual transactions and giving a confirmation receipt, the district obliged James to document each purchase made on the credit cards.

Investigators said James has been providing false invoices and transaction logs to the district since August 2018. After additional inquiry, the school system was able to get the real vendor receipts, which showed James' fraud, and the falsified receipts and logs were modified to reflect permitted transactions, Insider reported.

LRSD administrators were mocked over high salaries

When James used a school district credit card to buy expensive spectacles and had them mailed through the United States, she was charged with one count of postal fraud. According to a charging document filed in federal court on Wednesday, the Postal Service was on March 13, 2018.

In addition to a guidebook that specifically specified that the card was not for personal use, the LRSD-issued credit cards were supported by state and federal funding and were handed to James. According to the charge document, personal, cash, or cash-type expenditures are a clear breach of the card's usage agreement and might result in termination of employment and/or criminal prosecution, as per Daily Mail.

Gift cards were also forbidden from being purchased and products purchased with an LRSD credit card could not be sent to one's home address. James was meant to keep track of each credit card transaction and provide a receipt or other proof of purchase, as required by the district.

When the actual invoices from merchants were retrieved by LRSD, they found James' personal buying habits. James remained free until her sentencing when a sealed amendment to the plea deal was submitted. According to statistics, she lives in a tiny two-bedroom house in Little Rock that is valued at $212,970.

People have previously chastised James and the school system for the excessive compensation of LRSD administrators. A three-year salary hike proposal for all employees was overwhelmingly adopted by LRSD at the end of 2021.

Teacher wages would rise from $36,000 to $43,000 this year as a result of the pay rises, while other district employees would see a 3% increase. According to the Arkansas Times, the compensation increases would eventually make LRSD teachers among the best paid in the state.