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Press Release

AG Shapiro: Philadelphia Man To Be Charged With Embezzlement

November 20, 2020 | Topic: Criminal

HARRISBURG—Attorney General Josh Shapiro is today announcing the charges against Darnell Smith, a former employee of Khepera Charter School, of Philadelphia.

“Darnell Smith was responsible for sustaining the place where children had the opportunity to learn and grow, and the Grand Jury found evidence that he took away their resources for personal gain,” said Attorney General Shapiro. “It’s important that Pennsylvanians know about the findings of this Grand Jury, and that Smith can’t swindle any other institutions.”

Darnell Smith, also known as Darnell Sulaiman, formerly served as the Chief Financial Officer of Khepera Charter School (KCS) in North Philadelphia. A Grand Jury investigation conducted by the Attorney General, in conjunction with the Philadelphia Office of Inspector General and FBI, discovered that during Smith’s time as CFO, hundreds of thousands of dollars in funds intended for the school’s teachers and students were missing.

The Grand Jury found that, while more than $200,000 was withheld from teachers’ paychecks in order to pay into their Public School Employee Retirement System (PSERS) accounts, the money was never actually distributed to their pensions. The Grand Jury also found that an additional $370,000 in employer contributions to teachers’ pensions wasn’t contributed. In addition to the funds that were never contributed to teachers’ pensions, Smith embezzled $350,000, while already earning a six-figure salary.

Because Smith failed to make these payments, the Pennsylvania Department of Education was forced to withhold KCS’s payments, intended to help educate their students, in order to satisfy the PSERS obligations. As a result, KCS was unable to meet teachers’ payroll requirements.

Due to the financial strain on KCS, in June 2017, the School District of Philadelphia formally recommended revoking KCS’s charter. A hearing was scheduled in August 2017 to discuss revoking KCS’s charter, and Smith was expected to testify on his school’s behalf. Instead, he never arrived and cut off all contact with school. Partially because of Smith’s selfish actions, KCS’s charter was ultimately revoked and the school was closed, denying hundreds of students an education and depriving dozens of teachers of a job.

Smith is being charged with Theft by Unlawful Taking, Theft by Deception, Theft by Failure to Make Required Disposition of Funds, Tampering with Public Records, and Willful Failure to File PA Personal Income Tax. This case is being prosecuted by Senior Deputy Attorney General Megan Madaffari.

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