coats Case: 1:14-me-00485 Document #: 1 Filed: 09/11/14 Page 1 of 51 PagelD #:8 iL 0 106 (REY 4/10) At AUSA Megan Cupaitt Ghuych, 73, UNITED STATES DISTRICT COURT NORTHERN DISTRICT OF ILLINOIS, EASTERN DIVISIQNp 1 1 2014 UNDER SEAL _ pagistrate Judge Sidney |. Schenkier, United Stetes District Court In the Matter of the Search of: ‘The AOL account ozbyrdbennett@acl.com, further described in Atachment A aa 14M485 Case Number: APPLICATION AND AFFIDAVIT FOR A SEARCH WARRANT 1, Steven W. Rausch, a Special Agent of the Federal Bureau of Investigation, request a search warrant and state under penalty of perjury that { have reason to believe that on the following property or premises: See Attachment A located in the Eastern District of Virginia, there is now concealed: See Attachment A, Part ITI ‘The basis for the search under Fed. R. Crim. P, 41(¢) is evidence and instrumentalities. ‘The search is related to a violation of: Code Section Offense Description ‘Title 18, United States Code, Sections 666 (federal program federal program bribery, mail and wire fraud, and bribery), 1341 (mail fraud), 1343 (wire fraud), and 371 conspiracy to defraud the United States (conspiracy to defraud the United States) ‘The application is based on these facts: See Attached Affidavit, Continued on the attached sheet. “Applicant's Signature ‘STEVEN W. RAUSCH, Special Agent. Federal Bureau of Investigation Printed name and title ‘Sworn to before me and signed in my presence. Date: September 11,2014 S — Judge's signatire City and State: Chicago, Illinois _________ SIDNEY L SCHENKIER, U.S, Magistrate Judge __ Printed name and titleCase: 1:14-me-00485 Document #: 1 Filed: 09/11/14 Page 2 of 51 PagelD #:9 UNITED STATES DISTRICT COURT —) NORTHERN DISTRICT OF ILLINOIS } AFFIDAVIT 1, Steven W. Rausch, being duly sworn, state aa follows: 1. Lama Special Agent with the Federal Bureau of Investigation. I have been so employed since approximately June 30, 2002. 2. As part of my duties as an PBI Special Agent, I investigaté criminal violations relating to public corruption offenses. I have investigated a number of foderal violations, including mail and wire fraud, bank fraud, fraud against the government, money laundering, and civil rights violations. Ihave gained experience in such investigations through training and everyday work related to these types of cases. 3. Ihave participated in the execution of multiple federal search warrants. ‘This affidavit is made in support of an application for a warrant to search, pursuant to 18 U.S.C. §§ 2708(a), 2703(b)(1)(A) and 2703(0)(1)(A), for information associated with certain accounts that are stored at the premises owned, maintained, controlled, or operated by AOL, a free web based electronic mail service provider located at AOL Corporate Legal Department, America Online, 22000 AOL Way, Dulles, Virginia, 20166; Rackspace US, Inc. (Rackspace), an email provider located at 1 Fanatical Place, City of Windcrest, San Antonio, Texas 78218; and Yahoo!, a free web-based electronic mail service provider located at Yahoo! Headquarters, 701 First Avenue, Sunnyvale, California 94089. ‘The accounts to be searched, which are further described in the following paragraphs and in Part II of Attachment A, are:Case: 1:14-me-00485 Document #: 1 Filed: 09/11/14 Page 3 of 51 PagelD #:10 ozbyrdbennett@aol,com (hereinafter, “Subject Account 1"); garyso@synesiassociates,com (hereinafter, “Subject Accotint 2"); garyso@supesacademy.com (hereinafter, “Subject Account 3"); garyso@proactsearch.com (hereinafter, “Subject Account 4”); thomasv@proactsearch.com (hereinafter, “Subject Account 5”); thomasv@supesacademy.com (hereinafter, “Subject. Account 6”); thomasv@synesiassociates.com (hereinafter, “Subject Account 7"); and tracyyardena@sbeglobal.net (hereinafter, “Subject Account 8°). 4, As set forth below, there is probable cause to believe that in the account(s), described in Part II of Attachment A, in the possession of AOL, Rackspace, and/or Yahoo!, there exists evidence of violations of Title 18, United States Code, Sections 686 (federal program bribery), 1841 (mail fraud), 1843 (wire fraud), and 371. (Conspiracy to defraud the United States). The statements in this affidavit are based on my personal knowledge, and on information I have received from other law enforcement personnel and from persons with knowledge regarding relevant facts. Because this affidavit is being submitted for the limited purpose of securing a search warrant, I have not included each and every fact known to me concerning this investigation. I have set forth facts that I believe are sufficient to establish probable cause to believe that evidence and instrumentalities of violations of Title 18, United States Code, Sections 666 (federal program bribery), 1341 (mail fraud), 1343 (wire fraud), and 871 (conspiracy to defraud the United States), are located in the Subject Account(s).Case: 1:14-mc-00485 Document #: 1 Filed: 09/11/14 Page 4 of 51 PagelD #:11 BACKGROUND 1, The Chicago Board of Education (CBOE) is responsible for the governance, organizational, and financial oversight of the Chicago Public Schools (CPS). The CBOE establishes the policies, standards, goals and initiatives for CPS. 2. Barbara Byrd-Bennett is currently the Chief Executive Officer for CPS. ‘In April 2012, she was appointed as Chief Education Advisor for CPS, and she began working for OPS on May 1, 2012. She later entered into a contract with CPS to hecome the Chief Executive Officer from October 12, 2012 through June 80, 2015. 3. Chicago area businesemen Gary Solomon and Tom Vranas own three interrelated companies that service the public education industry (herein, referred to collectively as the “SUPES Entities”): (1) the SUPES Academy (SUPES), which offers professional development training for school administrators; (2) Synasi Associates (Synesi), which provides education consulting services; and Proact Search (Proact), which offers head-hunting and recruiting services. From September 2011 until approximately May 1, 2012, Byrd-Bennett worked as a paid consultant for SUPES. 4, Tracy Martin is the Chief of Strategic School Support Services (OS4) for CPS and reports to Byrd-Bennett. Martin was a paid consultant for SUPES prior to her employment with CPS. 5. Pursuantto its investigative authority, the Office of the Inspector General for the Chicago Board of Education (IG-CBOE) requested emails from the SUPES Entities and obtained emails from CPS. Basod on my review of these emails, some of 3Case: 1:14-me-00485 Document #: 1 Filed: 09/11/14 Page 5 of 51 PagelD #:12 which are described below, Byrd-Bennett, Solomon, Vranas, and Martin maintain emails, including those that are evidence of the subject offenses, in their accounts for an extended period of time. As noted below, Byrd-Bennett has used Subject Account 1 since January 9, 2010. Solomon and Vranas have used Subject Accounts 2 through 7 since September 7, 2008. Martin has used Subject Account 8 since May 18, 2006, Based on their pattern of storing emails for an extended period of time and their use of their email addresses in furtherance of the subject offenses, I believe evidence of the subject offenses is currently stored in the Subject Accounts. AQL 6. Based on my training and experience, I have learned the following about AOL: a. AOL is an email service which is available to Internet users. Subscribers obtain an account by registering on the Internet with AOL. AOL requests subscribers to provide basic information, such as name, gender, zip code and other personal/biographical information; b. AOL maintains electronic records pertaining tothe individuals and companies for which they maintain subscriber accounts. These records often include account access information, email transaction information, and account application information; e Any email that is sent to an AOL subscriber is stored in the subscriber's “mail box” on AOL's servers until the subscriber deletes the email or the 4Case: 1:14-me-00485 Document #: 1 Filed: 09/11/14 Page 6 of 51 PagelD #:13 aubscriber’s mailbox exceeds the storage limits preset by AOL. Ifthe message is not deleted by the subscriber, the account is below the maximum storage limit, and the subscriber accesses the account periodically, that message can remain on AOL's servers indefinitely; d. When the subscriber sends an email, it is initiated by the user, wansferred via the Internet to AOL's servers, and then transmitted to its end destination. AOL users have the option of saving a copy of the email sent. Unless the sender of the email specifically deletes the email from the AOL server, the email can remain on the system indefinitely; e An AOL subscriber can store files, including emails and image files, on servers maintained and/or owned'by AOL. 7 According to information provided by AOL pursuant to a grand jury eubpoena requesting subscriber information for Subject Account 1, the name on Subject Account 1 is Barbara Byrd-Bennett; the account is active; and Byrd-Bennett has been a “member” since January-9, 2010. Rackspace 8. Based on my training and experience, [have learned the following about Rackspace:Case: 1:14-me-00485 Document #: 1 Filed: 09/11/14 Page 7 of 51 PagelD #:14 a. Rackspace is a managed cloud computing company that offers email hosting cervice ata cost to its customers, which include businesses, corporations, and individuals; b. Rackspace maintains electronic records pertaining to its customers’ accounts, These records include information such as the customer’s name, address, and contacts; c. Any email that is sent to a Rackspace customer may be stored on Rackspace’s servers until the customer deletes the email from that customer’s email account, depending on the type of service that customer has. Ifthe email is stored on Rackspace's servers, that email will can remain on Rackspace’ servers until the customer deletes it; 4. When the customer sends an omail, it is initiated by the user, transferred via the Internet to Rackspace's servers, and then transmitted to its end destination. Rackspace’s users have the option of saving a copy of the email sent. ‘Unless the sender of the email specifically deletes the email from the Rackspace server, the email can remain on the system indefinitely; ¢. According to information provided by Rackspace pursuant to a grand jury subpoena, Rackspace has been “mail hosting” Subject Account 2, Subject Account 3, Subject Account 4, Subject Account 5, Subject Account 6, and Subject Account 7 from September 7, 2008 to the present. Rackspace identified its customer for these email accounts as Proact Search, 1215 Washington Avenue, 6Case: 1:14-me-00485 Document #: 1 Filed: 09/11/14 Page 8 of 51 PagelD #:15, Wilmette, Ilinois 60091, Rackspace further identified Thomas Vranas as the primary contact and Gary Solomon one of two secondary contacts for Subject Accounts 2,3, 4, 5, 6, and 7. Yahoo! 9. Based on my training and experience, I have learned the following about Yaboo!: a. Yahoo! is an email service which is available to Internet users. Subscribers obtain an account by registering on the Internet with Yahoo!. Yahoo! requests subscribers to provide basic information, such as name, gender, zip codé and other personal/biographical information; b. Yahoo! maintains electronic records pertaining to the individuals and companies for which they maintain subscriber accounts. These records often include account access information, email transaction information, and account application information; c Any email that is sent to a Yahoo! subscriber is stored in the subseriber’s “mail box” on Yahoo!'s servers until the subscriber deletes the email or the subscriber's mailbox exceeds the storage limits preset by Yahoo!. Ifthe message ‘is not deleted by the subscriber, the account is below the maximum storage limit, and the subscriber accesses the account periodically, that message can remain on Yahoo!'s servers indefinitely;Case: 1:14-me-00485 Document #: 1 Filed: 09/11/14 Page 9 of 51 PagelD #:16 d. When the subseribor sends an email, it is initiated by the user, transferred via the Internet to Yahoo!'s servers, and then transmitted to its end destination. Yahoo! users have the option of saving a copy of the email sent. Unless the sender of the email specifically deletes the email from the Yahoo! server, the email can remain on the system indefinitely; e. A Yahoo! subscriber can store files, including emails and image files, on servers maintained and/or owned by Yahoo!; £. Yahoo! provides email services to SBC Global in the same manner for sbeglobal.net email accounts. g According to information provided by Yahoo! pursuant toa grand jury subpoena, the name on Subject Account 8 is Tracy Martin; the account is active, and the account was created on May 18, 2006. 10. Based on my training and experience, I believe that. law enforcement agents can use the following information to identify the user(s) of an emailaccount by, among other things, cross referencing the information to other information about the user(s): a, Information maintained in electronic calendars (e.g,, meetings, birthdays, and anniversaries); b. Information in address books/eontact lists c.g., names, nicknames, addresses, email addresses, and phone numbers of family, friends, and business associates);Case: 1:14-mc-00485 Document #: 1 Filed: 09/11/14 Page 10 of 51 PagelD #:17 ¢. Documents addressed to individuals with whom the user(s) has personal or professional relationship or that concern a subject matter in which the user(s) has an identified interest; and d. Photos of the user(s) and the user's family members, friends, and business associates. 11. Based on my training and experience, I also know that individuals often sign omails or attachments with their true identities or nicknames and that individuals often use their true identities or nicknames in the “from” line, “subject” line, and body of the email. I believe that law enforcement agents can use that information to identify the user(s) of an email account by, among other things, cross referencing the information to other information about the user(s). FACTS SUPPORTING PROBABLE CAUSE TO SEARCH THE SUBJECT ACCOUNTS Summary 12. Asexplained in greater detail below, the investigation has revealed that Byrd-Bennett, Solomon, Vranas, and Martin have participated and are participating in a fraud and bribery scheme. 13. According to information provided by the IG-CBOE that it obtained from CPS's purchasing system, CPS received more than $10,000 in federal funding for the calendar years 2012, 2013, and 2014, CPS used some of the federal funding that it received to pay for services rendered by SUPES. In 2012, for example, payments to SUPES by CPS included approximately $553,000 in federal grant funds. In 2013, 9Case: 1:14-me-00485 Document #: 1 Filed: 09/11/14 Page 11 of 51 PagelD #:18 payments to SUPES by CPS included approximately $10.9 million in federal grant funds. In 2014, payments to SUPES by CPS included approximately $2.9 million in federal grant funds. 14, Immediately before she joined CPS, Byrd-Bennett began negotiating a Consulting Agreoment with Solomon and Vranas on behalf of the SUPES Entities. As part of that Consulting Agreement, the SUPES Entities agrood to compensate Byrd- Bennett for any rovenue that she generated for the SUPES Entities. The Consulting Agrooment was finalized on May 29, 2012, neaily a month after Byrd-Bennett began working for OPS, Byrd-Beunett has nover disclosed this financial arrangement and, in fact, is prohibited by the CPS Code of Ethics from having such a financial arrangement. 15, As detailed below, Byrd-Bennett has used her position within CPS to aid the SUPES Entities in obtaining contracts with CPS totaling more than $20 million. In exchange, she has received numerous personal benefits and has requested financial benefits. Based on the terms of her undisclosed agreement with the SUPES Entities, Byrd-Bennett stands to gain as much as 10% of the revenues generated from the SUPES Entities’ contracts with CPS. 16. As also detailed below, Solomon and Vranas agreed to hold the compensation that Byrd-Bennett has accrued as a result of the Consulting Agreement until she completes her employment with CPS. Solomon and Vranas have further 10Case: 1:14-mo-00485 Document #: 1 Filed: 09/11/14 Page 12 of §1 PagelD #:19 agreed to disguise the accrued compensation by paying it to Byrd-Bennett assigning bonus’ for returning to the SUPES Entities following her employment with OPS. 17. Additionally and as detailed below, with Byrd-Bonnett’s knowledge, Martin improperly influenced the outcome of a competitively bid request for proposal (RFP) for School Improvement Services and Supports, resulting in the awarding of contract worth $844,110 to Synesi, As part of her Consulting Agrooment with the SUPES Entities, Byrd-Bennett stood to benefit financially from the awarding of this contract to Synesi. Byre mn ‘ons! ree! PES Entities 18. As set forth below, based on my review of email correspondence and the investigation to date, Byrd-Bennett entered into a Consulting Agreement with the SUPES Entities after she began working for OPS. At the time that she negotiated the contract with the SUPES Entities, Byrd-Bennett, Solomon, and Vranas anticipated that Byrd-Bennett would use her position with OPS for the benefit of the SUPES Entities and that Byrd-Bennett would be compensated accordingly. Byrd-Bennett never diselosed this financial arrangement to CPS. Pre-CPS Negotiations 19. OnJanuary 4, 2012, Solomon, using Subject Account 4, sent an email to Byrd-Bennett at Subject Account 1, with a carbon copy to Solomon at Subject Account 5, Inthe email, Solomon discussed the terms of a Compensation Agreement between the SUPES Entities and Byrd-Bennett in which Byrd-Bennett would receive uCase: 1:14-me-00485 Document #: 1 Filed: 09/11/14 Page 13 of 51 PagelD #:20 compensation for the sale and use of her “toolkit”! by the SUPES Entities. Specifically, Solomon stated: ‘Tom [Vranas} will work on revised documents for you that call out: Additional compensation for BBB [Byrd-Bennett], per project, for every district where a toolkit is used and implemented Additional comp will be a % of gross revenue ‘Tom will also spell out that if Synesi is sold, acquired, etc, that BBB is compensated for the ongoing use of toolkit elements, consistent with our agreement, and gets an additional bonus as well... ? 20. Ondanuary 9, 2012, Solomon, using Subject Account 2, sent an email with the subject “SUPES for CPS Principals” to Byrd-Bennett at Subject Account 1, Vranas at Subject Account 5, and another individual. In the email, Solom asked, “Do you all have time on Wednesday to talk about what we can do to pitch CPS on SUPES for both sitting and aspiring principals?” 21. Also on January 9; 2012, Vranas emailed Byrd-Bennett and Solomon,$ stating: 1 Based on my review of email correspondence and my investigation to date, I understand the “toolkit,” aso known as the "Synesi School Turnaround Toolkit,” to be in reference to school-turnaround materials and models developed by Byrd-Bennett during ber tenure at SUPES. 2 ‘This affidavit refers to portions of emails correspondence. To the extent that such email correspondence is summarized, those suminaries do not include references to all of the topics covered during the course of the emails. In addition, the suinmaries donot include references to all statements ‘on the topics that are described. Portions of the emails included in the affidavit include direct quotes, Additionally, the account holders in these emails have been identified. Their identities are based on a combination of several factors, including subscriber information relating to the email accounts used and the content and context of the emails. My understandings and/or interpretations of all the conversations detailed below, indicated in brackots, are based on my experience and knowledge of the investigation to date, the context of the email correspondence, and the experience of other law enforcement officersand investigators associated with this investigation, 12Case: 1:14-me-00485 Document #: 1 Filed: 09/11/14 Page 14 of 51 PagelD #:21 Wanted to give you my initial thoughts on compensation. BBB to earn 5% of revenue if we use the toolkit, without you being involved in the sale. So, every time we use the tool kit and you don’t help us sell, you make 5%. BBB to carn 10% if you help us sell a Synesi project (this also includes the right for us to use the toolkit). In addition, that 10% is good for you selling anything else (SUPES, PROACT, or other services whether or not wo use the toolkit). If we are purchased by HMH{ [Houghton Mifflin Harcourt], we will give you 5% of total amount we are purchased for 22, These emails show (1) that Byrd-Bennett, Solomon, and Vranas were negotiating the Compensation Agreement at the samo time that the SUPES Entities wore developing a strategy to increase their business with CPS, and (2) the basic compensation structure to Byrd-Bennett. As discussed below, this compensation structure remained substantially the same during negotiations and was agreed to by Byrd-Bennett, Solomon, and Vranas in the final contract. 23, OnJanuary 16, 2012, Solomon, using Subject Account 4, sent anemail with the subject “Thursday” to Byrd-Bennett at Subject Account 1, Martin at Subject Account 8, and carbon copied Vranas at Subject Account 5. In the email, Solomon said that he and Byrd-Bennett were having drinks with “Beth Swanson, from the Mayor's office” (thon, Deputy Chiefof Staff for Education to Mayor Rabm Emanuel] on Thursday night. Solomon also stated that among the topics that he hoped to discuss 8Tbis unclear which email accounta Vranas, Solomon, and Byrd-Bennett used for this email. However, on January 30, 2012, Vranas, using Subject Account 5, forwarded an email chain that ineluded the Januaxy 9, 2012 email to Byrd-Bennett at Subject Account I and to Solomon at Subject Account 2, 13Case: 1:14-mc-00485 Document #: 1 Filed: 09/11/14 Page 15 of 51 PagelD #:22 following the meeting with Swanson and Byrd-Bennett were the toolkit and “CPS ‘SUPES for Aspiring and Sitting Principals.” 24. OnJanuary 24, 2012, Solomon, using email account Subject Account 4, sent an email to Byrd-Bennett at Subject Account 1, stating, “I am excited that you are going to become the next CAO [Chief Academic Officer] of CPS[]" This email suggests that by January 24, 2012, Byrd-Bennett and Solomon knew or had reason to believe that Byrd-Bennett would be joining CPS in a high-level position. 25. On February 23, 2012, Vranas! emailed a Consulting Agreement to Byrd- Bennett at Subject Account 1. The Consulting Agreement defined the parties to the Agreement as “botwoon Synesi Associates, LLC, and its affiliates, Proact Search LLC and ‘The SUPES Academy LLC, (‘Synesi")" and. “Barbara Byrd- Bennett...(‘Consultant’).” Byrd-Bennett, Solomon, and Vranas continued to negotiate the agreement from approximately February 23, 2012 until approximately May 29, 2012. 26. On April 26, 2012, Solomon, using Subject Account 4, emailed Byrd- Bennett at Subject Account 1. In the email, Solomon advised Byrd-Bennett regarding her on-going contract negotiations with CPS. Solomon specified that. he “would suggest you [Byrd-Bennett] offer to take a leave from Supes, to eliminate 4 ‘The specific email address identified for Vranas in this email correspondence is “Vranas@mex07a.com[J" which likely rafere to Microsoft Exchange platform and is not a specific email address to Vranas or anyone else, However, the signature on that email identifies Vranaaiin his capacity aa President of Proact Search and provides Subject Account 6 as Vranac’s email addxess. I therefore believe that it is likely that Vranas used Subject Account 6 to send this email to Byrd-Bennett, 4Case: 1:14-mo-00485 Document #: 1 Filed: 09/11/14 Page 16 of 51 PagelD #:23 conflict. BUT, I would make clear that you do work for us, hmh (Houghton Mifflin Harcourt], and others, and you will not take the post if it means those orgs are no Jonger allowed to do business in the district. I think this needs to be clear.” This email demonstrates that Solomon and Byrd-Bennett were aware of the conflict of interest that would exist if Byrd-Bennett continued to work for the SUPES Entities while working for CPS.5 27. On May 1, 2012, Byrd-Bennett became the Chief Education Advisor to the CEO for CPS. Byrd-Bennett subsequently entered into another contract with CPS to become the Chief Executive Officer from October 12, 2012 through June 80, 2015. e Consultins nt 28. On May 16, 2012, Byrd-Bennett, using Subject Account 1, emailed Vranas at Subject Account 7, with the subject “Trying to get everythin [sic] off my desk. (: Sorry Iam go delayed{]” Attached to the email was the signature page of a document, "Synesi Associates Consulting Agreement,” containing Byrd-Bennett’s signature, dated April 19, 2012. Ina letter to Byrd-Bennett that is dated April 30, 2012, Solomon stated, “As per your email, please consider this letter ai formal termination of your consulting agreement with The SUPES Academy, effective immediately.” 1 believe that this letter was created as a ruse to disguise Byrd-Bennett's continued financial interest in the SUPES Entities because Byrd-Bennett, Solomon, and Vranas continued to negotiate the terms of her Conaulting Agreement, which was fully executed after she begen ‘working for CPS and which gave her a financial interest in the SUPES Entities. 15Case: 1:14-me-00485 Document #: 1 Filed: 09/11/14 Page 17 of 51 PagelD #:24 29. On May 29, 2012, Vranas® sent an email to Byrd-Bennett at Subject Account 1 that contained the “Synesi Associates Consulting Agreement” signature page as an attachment. The signature page was signed by Byrd-Bennett, bearing a date of April 19, 2012, and Vranas, bearing a date of May 29, 2012. Also attached to the email was the signature page of Byrd-Benitett’s teaching contract with SUPES, bearing Byrd-Bennett’s signature, dated September 22, 2011, and Vranas’s signature, dated May 29, 2012. Because Vranas sont this email in response to an earlier email from Byrd-Bennett, from Subject Account 1, to Vranas, in which she asked for the executed Synesi contract. Accordingly, I believe that by May 29, 2012, Byrd-Bennett and Vranas, on behalf of the SUPES Entities, had executed the Consulting Agreement. 30. Under the terms of the Consulting Agreement, Byrd-Bennett agreed to “assist Synesi in sales efforts with a sales targets of 20 mutually agreed upon schools for 2012 and 30 schools for 2013.” The Consulting Agreement does not identify those 20-schools. In other emails that occurred during the negotiations of the Consulting Agreement, however, Chicago was contemplated as one of the 20 schools. For example, on March 12, 2012, Solomon used Subject Account 4 to send Byrd-Bennett an email to Subject Account 1 that stated, “Below is the list of districts/partnerships that wo have talked about to date. Feel free to add or subtract as you deem appropriate, but regardless, it is my hops to get 6 additional SUPES projects or 5 Synesi projects in Q2 © Again, the specific ome address identified for Vranas in this email correspondence is “Vranas@mex07a.com[.” As explained in footnote 4, T believe that it is likely that Vranas used Subject. Account 5 to send this email to Byrd-Bennett. 16Case: 1:14-me-00485 Document #: 1 Filed: 09/11/14 Page 18 of 51 PagelD #:25 of this year (April, May, June). Anything you can do to assist would be great.” Chicago is listed as one of 24 districts/partnerships in the list that Solomon provided in that same email, Based on this email, and others I have reviewed in which Chicago was specifically contemplated as one of the districta/partnerships, I believe Chicago is one of the “20 mutually agreed upon schools for 2012 and 30 schools for 2018.” 81. The Consulting Agreement containod a section pertaining to “Consultant Fes.” Under the terms of the Consulting Agreement, the SUPES Entities agreed to compensate Byrd-Bennett for using her “Deliverables,” which were defined as a “Turnaround Model Draft,” including 4 “Turnaround Toolkit” and its components. Specifically, the SUPES Entities, referred to collectively in the contract as “Synesi,” agreed to pay Byrd-Bennett: (1) 5% of their gross revenue if they used Byrd-Bennett’s Deliverables; or (2) 10% of their gross revenue if they use her Deliverables and Byrd- Bennett provided sales services; or (8) 10% of their gross revenues if Byrd-Bennett provided sales services that did not include her deliverables plus an hourly oper diem fee. The Consulting Agreement further provided that Byrd-Bennett would receive 5% of the cash proceeds from the sale of the SUPES Entities if she acted 28 a broker or was directly involved in the sale of the SUPES Entities or its assets and such participation was acknowledged in writing. 7Case: 1:14-mc-00485 Document #: 1 Filed: 09/11/14 Page 19 of 51 PagelD #:26 The CPS Code of Ethies 32, As discussed below, Byrd-Bennett violated the CPS Code of Ethies by entering into the Consulting Agreement while a CPS consultant and by failing to disclose to CPS her financial interest in the contracts awarded to the SUPES Entities. 33. ‘The CPS Code of Ethics prohibits all employees from having an “Heonomic Interest” in contracts with the Chicago Board of Education or the work or business of the Chicago Board of Education, regardless of expense, price, or consideration. (CPS Code of Ethics § VILL (A)) An “Weonomic Interest” includes @) an ownership interest under which the owner currently receives or is entitled to receive more than $2,500 per year, and (ii) any interest with a cost or present value of $5,000 or more. (CPS Code of Ethics § 11 (P).) As discussed below, Byrd-Bennett’s interest in the SUPES Entities exceeded $5,000. 34, ‘The Code of Ethics also prohibited Byrd-Bennett from exercising “Contract Management Authority” in connection with () Board business with an entity in which she has an Economic Interest; (ii) Board business with a person or entity with whom she has an employment relationship; or (jii) Board business with a person or entity with whom she has a “Business Relationship.” (CPS Code of Ethics § X.) The Code of Ethics defines “Contract Management Authority” as “personal involvement in or direct supervisory responsibility for the formulation or execution of a contract.” (CPS Code of Ethics § Il (K).) “Business Relationship” means “any contract or other transaction between a CPS official or employee and any other person or entity which 1BCase: 1:14-mo-00485 Document #: 1 Filed: 09/11/14 Page 20 of 51 PagelD #:27 entitles the official or employee to compensation or payment in the amount of $2,500 or more in a calendar year.” (CPS Code of Ethies § 11 (B).) As discussed further below, Byrd-Bonnett exercised Contract: Management Authority in contracts involving the SUPES Entities and had an ownership interest in the SUPES Entities that exceeded $2,500, 85. ‘The CPS Code of Ethics prohibited Byrd-Bennett from participating in any aspect of any contract award process with the SUPES Entities because she had, or had reason to know that she had, an““Economic Interest distinguisbable from that of the general public.” (CPS Code of Ethies § XI (A).) 36. In both of her contracts with CPS, Byrd-Bennett agreed.to be bound by the CPS Code of Ethics, Specifically, paragraph 27 of her Chief Education Advisor contract incorporated the Code of Ethics by reference. Paragraph 3 of Byrd-Bennett’s agreement to become Chief Executive Officer stated that Byrd-Bennett’s agreed to be bound by “the policies, rules, regulations and directions (collectively the “Board Policies”) adopted by the Board.” Byrd-Bennett Failed to Disclose her_ nomic Interest i UPI ities 87, On April 18, 2013, Byrd-Bennett submitted a document entitled “2013 Statement Of Business and Financial Interests” to CPS. Byrd-Bennett answered “No” to the question asking, “In 2012, did the Chicago Board of Education award any work, business or contracts to any person or entity in which you or a relative have an 19Case: 1:14-me-00485 Document #: 1 Filed: 09/11/14 Page 21 of 51 PageiD #:28 economic interest? This includes, butis not limited to, Income derived from the sale of textbooks or computer programs.” 38. On.April 10, 2014; Byrd-Bennett submitted a document entitled “2014 Statement of Business and Financial Interests” to CPS. She answered “No” to the question asking, “In 2018, did the Chicago Board of Education award any work, business or contracts to any person or entity in which you or a relative have av economicinterest? This includes, but is not limited to, Income derived from the sale of textbooks or computer programs.” 39. In answering “no” to the question asking if the Chicago Board of Education had awarded any work, business or contracts to any person or entity in which she had an economic interest, Byrd-Bennett failed to disclose the economic interest she had with the SUPES Entities. As explained below, at the time Byrd- Bennett made these representations, CPS had awarded contracts to the SUPES Entities of more than $2 million in 2012 and more than $20 million in 2018. CPS and the SUPES Entities Prior to Byrd-Bennett 40. Based on the investigation to date and my. review of documents obtained by the IG-CBOE, before Byrd-Bennett began working with OPS in 2012, CPS awarded limited work to the SUPES Entities. When Byrd-Benuett joined CPS in May 2012, SUPES was completing approximately $410,000 worth of leadership training services for CPS principals for the 2011-2012 school year. The majority of the funding for this 20Case: 1:14-mc-00485 Document #: 1 Filed: 09/11/14 Page 22 of 51 PagelD #:29 contract came from a private charitable entity knowns the Chicago Public Education Fund (he CPE), CPS directly funded approximately $30,000 of this contract. GES and the SUPES Entities Under Byrd-Bennett 41. As digoussed below, “despite concerns raised about SUPES by the OPE, CPS, under Byrd-Benvitt, has asvarded millions of dollar in contracts to the SUPES Entities, Byrd-Bermelt slands to profit from these contracts under the terme of her Consulting Agreement with the SUPES Entities. $2.09 Million CPS Contract Awarded to the SUPES Entities 42, Based on emails betweon Byrd-Bennett and others, as well as interviews conducted by the IG-CBOE with CPS employees who were directly involved, throughout summer and early autumn 2012, Byrd-Bennett was actively engaged in trying to expand SUES, called the Chicago Executive Leadership Academy (CELA), at CPS. She sought approximately $2.5 million in funding for CELA, with $1 million from the CPEF and §1.6 million from CPS for the 2012-2018 school year. When the CPHF ultimately decided not to provide any payment to CPS for CELA, Byrd-Bennett used her influence and convinced the CPS Non-Competitive Procurement Review Committee (NPRC)’ to directly fund a sole-source contract with the SUPES Entities for approximately $2.09M. Because the contract was a sole-source contract, it was not 1"The NPRC concista of five voting members from various CPS Central Office departments. Itreviews supporting documentation submitted to determine the validity and adequacy of a non-competitive procurement request. After it reviews a non-competitive procurement request, the comnittee will then submit a recommendation to Chicago Public School#’ chief purchasing officer. Upon approval by the chief purchasing officer, the non-competitive procurement request must also be approved by ‘the Chicago Board of Education before contract is negotiated and executed. aCase: 1:14-me-00485 Document #: 1 Filed: 09/11/14 Page 23 of 51 PagelD #:30 subject to the Request For Proposal (RFP) process, meaning that the SUPES Entities ‘did not compete against other potential vendors for the contract. As also discussed below, Byrd-Bennett expected to receive compensation from the SUPES Entities for her assistance in procuring this CPS contract. 43. OnJune 26, 2012, Vranas sent Byrd-Bennett at Subject Account 1, an email containing a proposal for three SUPES Academies (a Chiefs Academy, a Deputy Chiefs Academy, and a Principal Development Academy) for CPS. Specifically, Vranas wrote, “We may want to start thinking about procurement issues that may arise for this work. We've had some other districts do a blanket ‘come one come all’ type of BFP for any services, and have had some sole source REPs, Just want tomake sure that as this work progresses, we don't get hindered with procurement (which has been notoriously terrible at CPS){]" In an email sent on June 26, 2012 from Subject Account 1, Byrd-Bennett responded, “What might be the issues ai [sic] ean navigate now?" On June 26, 2012, Vranas, using Subject Account 5, responded that the options included a sole source contract, and specific and general RFPs, but that sole source would be the best option. These emails indicate that Vranas and Byrd-Bennett had already agreed that the SUPES Entities would receive a contract from CPS for CELA and that funding for the work was still needed. ‘The specific email address identified for Vranas in this email correspondence is “Vranas@mex07a.com|,]” which likely refers to Subject Account 5 for the reasons stated above. 2Case: 1:14-mc-00485 Document #: 1 Filed: 09/11/14 Page 24 of 51 PagelD #:31 44, On August 26, 2012, Solomon, using Subject Account 2, emailed Byrd- Bennett at Subject Account 1, and said, “If you tell me these look ok, Iam going to send to Steve (Gering]® asap. I do not want to send to him until you review and comment, We sent you the cost breakdown a couple weeks ago, but with everything going on, we just want to make sure you take a good look before we go further with this, in terms of finding a funding source....” Attached to this email is a nine page proposal from SUPES that detailed the services that it intended to provide to CPS ata total cost of $2,550,000, 46. According to emails and reports interviews of current and former CPS employees that I have reviewed, in tbe Fall of 2012, while Byrd-Bennett was the Chief Education Advisor for CPS, the CPEF questioned the value of CBLA and indicated to OPS that it was reluctant to provide further funding for the program. ‘The CPEF was concerned about the absence of benchmarks or an evaluation system to measure whether CELA was a successful program. Despite the concerns raised by the CPEF and with pressure from Byrd-Bennett, CPS awarded a $2.09 million sole sourve contract to the SUPES Entities for CELA with the hope that the CPEF would provide funding for the contract, as it had done the prior year. 8 According to my review of documents, emails, and reports of interviews conducted by the IG-CBOE, Steve Gering became 2 CPS consultant in 2008 and was bired into the fulltime position of Chief of Leadership Developmentin June 2011. Goring became the Chief Network Officer from April 2012 until danuary 2018, Gering remained with CPS until May 31, 2013, According to Gering, as the Chief ‘Network Officer, he was intimately involved in the decisions regarding the SUPES Academy contracts, 23Case: 1:14-me-00485 Document #: 1 Filed: 09/11/14 Page 25 of 1 PagelD #:32 46. On September 10, 2012, Byrd-Bennett, using Subject Account 1, sent an email to Solomon at Subject Account 4, stating, “[NJext time we talk, we need a strategy on principal pd [professional development] to got § from the fund (CPTI. have tuition. {sic] to pay and casinos to visit (; (]" I believe that Byrd Bennett was making reference to the personal financial benefits she expected to receive from the SUPES Entities in exchange for the SUPES Entities receiving a contract for professional development with CPS, as well as the need to locate a funding source to pay for the contract. 47. — According to Gering, despite the CPEF’s hesitancy in the Fall of 2012 to fond CELA, Byrd-Bennett and other OPS officials were confident that it would pay at least as much as it did the previous year. CPS moved forward with CELA for the 2012- 2018 school year without a funding commitment from the CPEF. Gering reported that once they moved forward without external funding, they needed to get an action from the Chicago Board of Education to pay for some of the Fall 2012 CELA that had happened on the assumption that the CPEF would pay for it. 48. On September 13, 2012, Gering emailed Solomon at Subject. Account 2: “Just got off with BBB [Byrd-Bennett]. Can I come down for a few minutes this am to talk through a couple more things, regarding procurement? She asked me to work with you to get her some information so that she can best move forward with our funding options. Let me know.” On September 13, 2012, Solomon, using. Subject Account 2, responded to Gering, stating that he would prefer to speak on the phone. 4Case: 1:14-me-00485 Document #: 1 Filed: 09/11/14 Page 26 of 51 Pagel #:33 49. Less than an hour later, Gering sent an email to Tommie Henderson, a CPS employee working for Byrd-Bennett, stating, “Hi Tommie — I just got off the phone with Gary Solomon. Please connect with Gary today and walk through the options for REP, sole source, ‘and bypassing procurement through law." Later that morning, Henderson sent an email to Solomon at Subject Account 2: “In anticipation of our meeting, I wanted to share thie document to give you some background about my understanding of the issue.” Attached to Henderson's email to Solomon was a spreadsheet that compared three “Patlis to Approval”: () sole souree (via Procurement); Gi) sole source (via Legal); and (ii) an RFP. The spreadsheet identified the benefit of the two sole source options: “Ensures SUPES is selected.” 50. At approximately 12:00 p.m. on September 13, 2012, Henderson forwarded to Byrd-Bennett at bbyrd-bennett@cps.edu the email that Gering sent to bim earlier. Byrd-Bennett, using bbyrd-bennett@eps.edu, wrote back at. 12:54 p.m.: “Ah ha Somehow Jen translated this to mean you were leading CELA....get to her and clarify that you working with this specific aroa of RFP and procurement process for me because Stevé (Gering] did not.” I believe that Byrd-Bennett was instructing Henderson to use her name and identify her as leading the procurement process for the CELA contract in order to facilitate the procurement process at CPS. 51. On 1:28 p.m. on September 13, 2012, Byrd-Bennett, using bbyrd- bennett@eps.edu, wrote an email to Gering and Henderson, Byrd Bennett wrote, “Because I am unable to be on site to get this done, the communication is really 25Case: 1:14-mc-00485 Document #: 1 Filed: 09/11/14 Page 27 of 51 PagelD #:34, becoming distorted. I want to have the RFP drafted in the event I can not [sid] go sole source, Ido not want to delay the process for kick off, I do not want to recalibrate the calendar. Given the importance of this, Steve is it possible that you go to procurement to discuss sole source. Ihave talked with Tim and you simply must make the case. No one there wants to take responsibility and now wo are stuck. I am also spealring to the Fund [CPEF] via written communication today as soon as I receive the draft. With all of then [sic] changes moving forward, this has become crucial [sic] our leaders... Chiefs and principals. Have I provided clarity??” 52. On September 19, 2012, Henderson, sent an email to the CPEF ‘in which. he stated, “As per Dr. Barbara Byrd-Bennett, I am sending the following documents related to the Chicago Executive Leadership Academy and SUPES Academy.” One of the attached documents was a letter from Byrd-Bennott to the CPEF asking it to pay $1 million toward CBLA for the 2012-18 school year. The CPEF notified CPS in November 2012 that it would not provide any additional funding for CELA to CPS. 83. On November 7, 2012, the $2,09 million contract between the SUPES Entities and CPS was executed. Under this contract, the SUPES Entities agreed to provide leadership development services for CELA. Two days later, Byrd-Bennett was named the Chief Executive Officer for CPS. 54. Underthe terms ofher Consulting Agreement with the SUPES Entitites, Byrd-Bennett is entitled to receive 10% of the revenue generated. from the $2.09 million contract. 26Case: 1:14-me-00485 Document #: 1 Filed: 09/11/14 Page 28 of 51 PagelD #:35 Byrd-Bennett, Solomon. and Vranas Conceal Byrd-Bennett’s Financial Interest in the $2.09 Million Contract 55. On December 6, 2012, Solomon, Vranas, and Byrd-Bennett exchanged a series of emails that acknowledged that money was owed to Byrd-Bennett and set forth a plan to conceal payment of that money to Byrd-Bennett by (1) placing it into accounts of Byrd-Bennett’s relatives and (2) by holding the money for her until she completes her contract with CPS and disguising the payment as a “signing bonus.” 56. On December 6, 2012 at approximately 12:21 p.m., Byrd-Bennett, using Subject Account 1, emailed Vranas at Subject Account 5 with a carbon copy to Solomon at Subject Account 3: “{A]ny progress with the boys (Byrd-Bennett’s grandsons}?! i sont the numbers(.)” 57. A few minutes later, at approximately 12:33 p.m. Solomon, using Subject Account 2, responded to Byrd-Bennett at Subject Account 1, stating, “Like we have discussed, we have created accounts that, upon withdrawal, we will pay down the taxes and distribute. You can distribute to the boys as you deem appropriate. It is our assumption, that the distribution will serve as a signing bonus upon your return to ‘8 Based on the investigation to date, inclading my review of other emails, Byrd-Bennett has referred to hher two grandsons as “the boys" in other email correspondence during the same time: period. For ‘example; on December 8, 2012, Byrd-Bennett, using Subject Account 1, aent an email to Solomon at Subject Account 2 in which she asked whether Solomon had access and the cost for four tickets toa Chicago Bulls basketball game, Specifically, Byrd-Bennett asked, “Any access and whatis the cost for 4 tickets to Bulls on 12/29 or 12/317 Using Subject Account 2, Solomon responded later that night to Byrd-Bonnott at Subject Account 1 stating, “Ofcourse. Lemme check. How many?" Byrd-Benzett, using Subject Account 1, respanded, "4..sny daughter and son in law and the boys{ I" After a oeries of emails in which Byrd-Bennett, using Subject Account 1, and Solomon, using Subject Account 2, settled on the date for the game, in an email sent on December 9, 2012, Byrd-Bennett asked, "Cost?” Solomon, using Subject Account 2, responded, “Zero.” Byrd-Beonett replied, “WOW! Thanke{]" 2714-me-00485 Document #: 1 Filed: 09/11/14 Page 29 of 51 PagelD #:36 SUPES/Synesi. Ifyou only join for the day, you will be the highest paid person on the planet for that day. Regardless, it will be paid out on day one.” 68. At approximately 4:12p.m. that afternoon and using Subject Account 1, Byrd-Bennett responded to Solomon at Subject Account 2:"T guess so.......[ thought the accounts fin the names of her grandsons] were created now I had a different understanding Calculations for Chicago [payment for her assistance in obtaining the CPS contract]? I have PG and St. LL” 59. At approximately 4:12 p.m., Solomon, using Subject Account 2, forwarded the above-described email chain to Vranas at Subject Account 6, stating, “You can call her [Byrd-Bennett] anytime you like.” Vranas, using Subject Account 5, responded to Solomon at Subject Account 2, stating “I haven't been part of those discussions at all. [can if you want let me know. Everyone sucks and is greedy.” Byrd-Bennett Secures Additional Funding for the SUPES Entities 60. As discussed above, the SUPES Entities conducted CELA training for CPS in the Fall of 2012 before it was awarded the $2.09 million contract based on the assumption that the CPEF would fund a portion of the work. As discussed below, after the award of the $2.09 million contract and after the CPEF informed CPSthatit would not provide additional funding for CELA, the SUPES Entities asked CPS officials for payment of approximately $450,000 for the pre-contract work. Byrd-Bennett pressured CPS employees to locate additional funding to pay the SUPES Entities $450,000, 28Case: 1:14-me-00485 Document #: 1 Filed; 09/11/14 Page 30 of 51 PagelD #:37 resulting in the SUPES Entities claiming to provide “new work” as. ruse in order to receive payment. 61. On November 20, 2012, Byrd-Bennett, using Subject Account 1, sent an email to Vranas at Subject Account 5, and asked, “How much are we short on $ {funding for pre-contract CELA training in the Fall of 2012]2” Vranas responded, "460,000." Byrd-Bennett replied, “I'm on it.” 62. On November 27, 2012, Steven Goring sent an email to CPS personnel rogarding Byrd-Bennett’s direction to CPS employees to find $450,000 to pay the SUPES Entitites: ‘Need to meet with you as a follow-up ... to identify funds for SUPES. This is an all hands on deck as directed by BBB to secure the needed funding internally.” 63, Based on the investigation to date, including tny review of the emails and interview sdiscussed below, I beliove the funding plan that was eventually developed and executed involved a fraudulent contract extension for work that the SUPES Entities did not intond to perform (or at least did not intend to fully perform), and that worl was not fully. performed. 64. On December 4 and 5, 2012, Gering and Solomon, using Subject Account 3, discussed via email a possible plan for expanding the scope of the $2.09M sole-source contract by $450,000 through the addition of more professional development services. On December 5, 2012, Gary Solomon, using Subject ‘Account 2, wrote to Steve Gering, with a carbon copy to Byrd-Benmett at Subject 29Case: 1:14-me-00485 Document #: 1 Filed: 09/11/14 Page 31 of 51 PagelD #:38 Account 1 and another individual: “Let me be clear, we are NOT suggesting additional service. We are simply giving you a rationale for asking for additional funds, without calling out mistakes are pre contract work. I thought this was what was asked of us. Iam not comfortable with this and think we should bring others in. Sherry? BBB? I will be there today, but we need to clarity on this.” I believe that Solomon was informing Gering that even if an amended contract required the SUPES Entities to provide additional services, the SUPES Entities would not provide those services. Instead, the additional services were merely a pretext to provide CPS with a method to pay the SUPES Entities for the pre-contract services. 65. According to email correspondence and the IG-CBOE interview of Steve Gering, CPS eventually decided on a plan to obtain the additional $450,000 in funding for the SUPES Entities. They decided (i) to negotiate a deal to settle the $450,000 pre- contract claim for $225,000 and have CPS pay the $225,000 settlement amount; and to simultaneously extend the $2.09 million contract by amending it to add $225,000 to it while extending the duration of the contract by adding services to the end of the existing contract. 66. Emails show that Byrd-Bennett was kept informed of the efforts to pay the SUPES Entities the $450,000. For example, on December 13, 2012, Gering wrote to Byrd-Bennett: “We need to amend the contract with SUPES in order to pay them the $450,000 that the Fund was going to pay directly to SUPES. There are a couple of 30Case: 1:14-me-00485 Document #: 1 Filed: 09/11/14 Page 32 of 51 PagelD #:39 different options that we have worked through. Need your advice on which path to follow.” 67. Emails and other evidence suggest, however, that it was never intended that the SUPHS Entities provide the additional §225,000 of contract work and, in Suet, none or almost none of the agreed-upon contract extension work was performed. The SUPES Entities, however, received the additional $225,000. 68. For example, on January 3, 2013, CPS employee Kelly Bruno! wrote to Vranas at Subject Account 6 and Solomon at Subject Account 2 about the proposed terms of the planned contract extension, stating, “Attached is the updated scope of services (Uxhibit A-1) and Payment Schedule (B-1) with the information regarding scope of services. Please review and let me know if the service and pricing information inchided is accurate and final.” 69. On January 4, 2018, Vranas, using Subject Account 6, responded to Bruno: “The only thing I'm concerned about is the timing of these invoices. June, July and August seems a little late- can we move them to January, March and May?" Steve Gering responded to this email, and cc’d his response to both Bruno and Solomon, 4 Kelly Bruno started her employment with CPS in October of 2011 and was working in the Procurement Department during the time periods in which the sole-source contracts were awarded to the SUPES Eotities. She was interviewed by the IG-CBOS in November 2013. According to Bruno, her dutios on the first sole-source contract originally consisted of gathering documents but she became more involved with the §225,000contract amendment and the $226,000 approved pay. Once the gole-souree ‘was approved, she waa tald to reach out to Solomon and Vranasto discuss pricing. According to Bruno, Vranas became very upset with her and questioned who she waa and why she was calling when she reached out to him, Bruno said that Vranas told her that he had written the pricing on the back of a. napkin in a cab, According to Kelly, during this call, Solomon told her that Byrd-Bennett had already 3Case: 1:14-mc-00485 Document #: 1 Filed: 09/11/14 Page 33 of 51 PagelD #:40 stating, “Hi Tom - The invoicing needs to align with the services provided. Since we are extending the contract to include June, July, August coaching services, then we need to align the invoicing dates to the services provided.” Solomon then responded using Subject Account 2: “The lion share of the ‘new work’ is in the first couple months....and the invoices should be heavily reflective of this 70. I believe that this email exchange shows that Vranas and the SUPES Entities never intended to provide any real services: (1) Vranas used quotes to qualify “new work,” which suggests that he knew that there was no new work; and (2) the new work set forth in the proposed Scope of Services (Exhibit A-1) and Payment Schedule B-1) were two additional two-day sessions of training in June 2013 and three additional months of personal coaching, which were to occur throughout June, July and. August 2013. These additional services were to occur as specified in the Scope of Services, not during the winter and spring months that Vranas suggested for the invoices, which suggests that Vranas did not anticipate that they would occur at all.!2 TI. On January 23, 2013, the Board of Education approved (1) a $225,000 payment for the pre-contract work, and (2) a $225,000 contract extension of services, meaning the “new work,” discussed above. On February 6, 2013, the SUPES Entities and the Chicago Board of Education entered into an Amendment to the Leadership ‘agreed on the price months ago and that they wore not discussing any changes because everything was final, 1 According to Gering, when he saw this email, he had a conversation with Solomon in which they acknowledged that work was done prior te the contract, but if they agreed to more services, then actual 32Case: 1:14-mc-00485 Document #: 1 Filed: 09/11/14 Page 34 of 51 PagelD #:41 Development Services Agreement (the $2.09 million contract). The amended contract increased the total payment to the SUPES Entities from approximately $2.09 million to approximately $2.32 million, an increase of $226,000. 72. Although the amended contract specified that the $225,000 worth of additional work was to be invoiced on June 30, 2013 ($145,180.25), July 80, 2013 ($39,909.92), and August 80, 2013 ($29,909.92), the SUPES Entities invoiced the full amount of the original contract plus the additional $225,000 by June 20, 2018, which suggests that the additional training that was to occur in June, July, and August never occurred, 78. Additionally, the invoices that: the SUPES Entities submitted to CPS for both the $2.09 million original contract and the $225,000 contract extension include only vague descriptions of the work claimed. There is insufficient detail regarding the dates of the claimod training and hours of coaching to determine when or even ifthe additional work ever occurred. 74. Under the terms of the Consulting Agreement Byrd-Bennett entered into with the SUPES Entities before joining CPS, Byrd-Bennott is entitled to as much as $10% of the revenue generated from the $450,000 that she arranged for CPS to pay to the SUPES Entities, or $45,000, Byrd-Bennett never disclosed this arrangement to CPS at the time she was facilitating the payment to the SUPES Entities. services and “reel work” would noed ta be provided. Gering said that he did not get-any pushback fram Solomon after that conversation. 33Case: 1:14-mc-00485 Document #: 1 Filed: 09/11/14 Page 35 of 51 PagelD #:42 SUPES Receives a $20.5 Million Sole-Source Contract 75, In dune 2018, the Chicago Board of Education awarded a second-sole source contract to SUPES. This contract was worth §20.5 million. As discussed below, somo of the CPS employees involved in the decision to award the contract to SUPES have described the pressure that Byrd-Bennett placed on them and others to have this contract awarded to SUPES, 16. For example, according to Gering, when the $20.5 million contract was under consideration, he thought that this contract or a significant portion of it should go through the RFP process and not be sole sourced. Gering said that he expressed his thoughts to the Procurement Department and to others involved in the process. According to Gering, Byrd-Bennett told him not to raise any more questions regarding this contract with Procurement and to let the process continue, According to Gering, Byrd-Bennett mada it clear to him that sho wanted SUPES to have all of the leadership development contracts with CPS. 77. According to Gering, he questioned the prices that SUPES charged forits services. He said that during a meeting with Vranas, he asked Vranas about cutting some of the costs. Vranas told him that unless SUPES started cutting services, there was no room for negotiation and the cost was the cost. ‘18. According to Bruno, she could not believe that anyone was considering awarding SUPES another contract. She said that it was common knowledge that the program was not as successful as it should have been and that the sessions were very 34Case: 1:14-me-00485 Document #: 1 Filed: 09/11/14 Page 36 of 51 PagelD #:43 disorganized, the speakers and coaches had no “touch” with Chicago, the attendance was very low, and no one liked being forced to attend a conference on Saturday. 79. OnMay 14, 2013, during negotiations for the $20.5 million contract, Byrd. Bennett, using bbyrd-bennett@cps.edu, sent an omail to OPS Chief-Talent Officer Alicia Winckler in which she oxprossed her intention to continue to use SUPES for training despite what the Procurement Department or Goring had said. Specifically, she wrote, "Yes..we need to do this for multi year and I have no intentions of changing horses in reference to SUPES] despite what procurement or at least what Steve (Gering] had said." 80. Under the terms of her Consulting Agreement with the SUPES Entities, Byrd-Bennett is entitled to 10% of the revenue generated from the June 2013 contract, between the SUPES Entitios and CPS, or approximately $2,050,000. 81. OnJuly 1, 2013, five days after the $20.5 million contract was executed by the SUPES Entities, Byrd-Bennett, using Subject Account 1, sent an email to Solomon at Subject Account 4, stating, “Anything u can provide to me or a designated person relative to the future college and weddings for the boys (Byrd- Bennett's grandsons] might be helpful.” I believe that Byrd-Bennett was requesting money in exchange for the actions that she had taken to ensure that SUPES was awarded the $20.5 million contract. 82. On August 24, 2013, Byrd-Bennett, using Subject Account 1, and Solomon, using Subject Account 2, exchanged emails, In the first email, Byrd- 35Case; 1:14-mc-00485 Document #: 1 Filed: 09/11/14 Page 37 of 51 PagelD #:44 Bennett said to Solomon, “Have my contract ready (: []” Solomon responded, “Ready and waiting. Always on my desk.” This exchange shows that Byrd-Bennett intends to roturn to the SUPES Entities after she leaves OPS, $844,110 of Additional Work Is Awarded to Synest 83. In August 2013, CPS awarded Synosi a School Management Consulting Agreoment, the value of which was $844,110. That contract was the result of an RFP for School Improvement Services and Supports (Specification No. 13-250020), which was advertised on February 25, 2013. ‘That REP included a letter from Byrd-Bennett stating that the purpose of the of the RFP was “to identify highly qualified and motivated Lead Partner Organizations that will be paired with one or more of OS4’s [Office of School Strategic Support Services] secondary schools and that will collaborate with these schools to build the internal capacity required to implement whole school reform and continuous improvement...” The Scope of Services section of the RFP noted that any proposers who eventually were chosen to perform work in a current or prospective School improvement Grant (SIG) school would be required to apply for “Lead Partner” approval with the Illinois State Board of Education (ISBE). 84, As discussed further below, CPS employee Tracy Martin, a former consultant for the SUPES Entities and a longtime associate of Byrd-Bennett, (1) developed the REP for the work that was awarded to Synesi with the help of Vranas; and (2) improperly influenced the RFP process so that Synesi would be awarded the 36Case: 1:14-me-00485 Document #: 1 Filed: 09/11/14 Page 38 of 51 PagelD #:45 ‘work, Byrd-Bennett was aware of the REP and had a financial interest in the work that was awarded to Synesi. 85. _ Beforo joining CPS, Martin had a working history with bdth Byrd-Bennett and the SUPES Entities. She worked under Byrd-Bennott in the Detroit Pablic Schools, and she and Byrd-Bennett were both consultants forthie SUPES Bntities after Teaving the Detroit Public Schools. According to her resume, Martin acted as the Vice President of Program Development for SUPES beginning in 2011, the same time that Byrd-Bennett was also a SUPES consultant. 86. A March 12, 2012 email from Solomon, at Subject Account 4, to Byrd- Bennett, at Subject Account 1, suggests that it was Byrd-Bennett who pushed Solomon to find a larger role for Martin at the SUPES Entities. Specifically, Solomon wrote: “Barbara..As I mentioned, I really enjoy working with you and will do everything I can to find a good place for Sherree and Tracy [Martin]. I think we are getting to a good place with ‘Tracy, and once we got 8 or so Synesi projects and/or SUPES Academies, I will have the financial flexibility to be creative in finding consistent and long term roles for them both.” Based on my review of emails and the investigation to date, Martin also helped Byrd-Bennett develop the above-referenced “toolkit.” 87. Inthe April 26, 2012 email sent from Solomon to Byrd-Bennett, which is referenced dbove, among the other items that Solomon advised Byrd-Bennett to 37Case; 1:14-mc-00485 Document #: 1 Filed: 09/11/14 Page 39 of 51 PageiD #:46 negotiate with CPS was “to bring an interim deputy, tracy [Martin], to grow someone into that role as welll ]” 88. CPS records reflect that Tracy Martin was hired as the Chief of Strategic School Support Services (OS4) on November 26, 2012. In that position, she reports to Byrd-Bennett. 89, Ihave also reviewed emails to and from Tracy Martin. These emails wore produced to the IG-CBOE by the SUPES Entities through their counsel. In nearly all of the emails I have reviewed, Tracy Martin used the email address tracyyardena@sbeglobal.com. On limited occasions, Martin used the address tmartin29@cps.edu. Emails using the eps.edu email address were obtained by the 1G- CBOE from CPS pursuant to their investigative authority. 90. On October 30, 2012, Vranas, using Subject Account , emailed Martin at Subject Account 8: “Congrats!!! We'll miss you but hopefully we'll be working together soon.” ‘The email also contained a list of options and prices for Chicago apartments and referenced that Martin would be “staying long term in Chicago.” In this email, I believe that Vranas was congratulating Martin on the news that she would be taking a full-time position in Chicago, which I believe to be the CPS OS4 position, and he was helping hor research prices for housing. 91. Shortly after starting at CPS, Martin wrote Vranas about upcoming opportunities but specified the need for talk “offline.” Specifically, on January 20, 38Case: ‘14-mc-00485 Document #: 1 Filed: 09/11/14 Page 40 of 51 PagelD #:47 2018, Tracy Martin, using Subject Account 8, wrote to Vranas, Vranas later responded to Martin's email using Subject Account 5. Martin's email read: Hey Tom, Hope all is well. I have a fow matters I need to discuss with “Tax info, [ecsved from SUPES -Remaining payment for services provided -Upcoming opportunities... Need to discuss offline” ‘This email appears to show that Martin wanted to discuss opportunities in private and without having an email record of the conversation. 92, Based upon other eraails, [believe that one of the upcoming opportunities that Martin wanted to talk to Vranas about was the work that was eventually awarded pursuant to the RFP for School Improvement Services and Supports (Specification No. 13-250020). Specifically, several emails appear to show that Vranas was anticipating needing ISBE approval for one or more SUPES entities as a “Lead Provider" before the RFP was even advertised. 93. OnJanuary 30, 2013, Vranas, using Subject Account 7, sent an email to ISBE inquiring about becoming an ISBE Lead Partner Provider for SIG school districts. Later in the day, Vranas, using Subject Account 5 forwarded that email to ‘Tracy Martin, who later replied to Vranas using Subject Account 8: “Yes!!” Vranas wrote back: “Will let you know what they say. Been calling since the weekond and got nada.” Thus, these emails appear to show not only that Vranas was anticipating the need for “Lead Partner’ approval, but that Martin was very pleased he was asking about how to apply for euch approval. 39Case: 1:14-mo-00485 Document #: 1 Filed: 09/11/14 Page 41 of 51 PagelD 4:48 94. A subsequent email also appears to show that Martin asked Vranas for samples of SIG-related RFPs that other districts had issued. On January 31, 2013, Vranas, using Subject Account. 5 sent Martin an email at Subject Account 8 that read: “Tracy, Take a look here are 4 urban Lead SIG RFPs for Lead Partners. Hope this helps...let me know if you need anything else!” Attached to the emails were four RFPs issued by four other school districts. Thus, I believe that Vranas was giving Martin samples of RFPs for work that Martin intended to use to steer contract work to Vranas and the SUPES Entities. 95. On February 4, 2013, Vranas, using Subject Account 5, followed-up with email to Martin at Subject Account 8; asking, “Were those RFPs helpful? Anything else we can help with?” 96, On February 7, 2013, Martin, using Subject Account 8 wrote to Vranas at Subject Account 5, in relevant part, “Let’s plan to touch base next week. Info, will go out next week. Had to make some changes on recent info. we received from ISBE. Let's connect next week.” 97. Other emails show that Vranas actively reached out to Kelly Bruno to ask her to help Martin navigate the procurement process related to SIG grants and RFPs. For example, on February 13, 2013, Vranas, using Subject Account 6, emailed Bruno, “Have you got to meet Tracy Martin? She's one of BB's [Byrd-Bennett’s] right hands and is trying to get some stuff through procurement. If you could be her guide and help I'm sure it would be good stuff...” Later that day, Bruno responded, “Of 40Case: 1:14-mc-00485 Document #: 1 Filed; 09/11/14 Page 42 of 51 PagelD #:49 course. 'ye met her once and would be happy to help. Lan stop by or send her a one liner if I don't see her, She pushing forward [sic] a contract for you guys? Just kidding.” Vranas then responded, ‘Till let her know to hook up with you if she needs anything. She's working on sig related stuff and has some tight timeframes with rfps to hit, New tothe system and would really benefit from some help down by you." 98. Later on February 13, 2013, Vranas, using Subject Account 5, wrote to Martin at Subject Account 8 that Bruno was available as a resource, stating, “Know that you are going to need some help in procurement to get things going. Not sure if you have met Kelly Bruno but she was Gering’s right hand and helped us usher through the SUPES contract. She has been moved to procurement and is looking to get on Bbb [sie] and everyone's good side, so you can engage her and push her to help you got things done. Not sure if you need it but she could be a great resource to lean on and make sure everything you need is handled. Let me know if there is ANYTHING we can do to help.” (Bmphasis in original.) 99, Eleven entities eventually submitted proposals in response to the February 25, 2013 REP, including Synesi. 100. CPS records show that an RFP review committee was established to determine which proposals were the best and dotermine who would move on tothe oral presentation phase. The review committee met on March 15, 2013. 4Case: 1:14-me-00485 Document #: 1 Filed: 09/11/14 Page 43 of 51 PagelD #:50 101. Based on preliminary scoring by review committee members, Synesi should not have been sélected to move on to the next phase of the selection process, the oral presentation state. 102. I have reviewed an IG-CBOE interview report. of Liz Kirby, who is a Network Chief for CPS and was at the review committee meeting on March 15, 2013. She stated that Synesi would not have advanced to the oral interview stage if not for Martin’s influence. Kirby stated that when discussions were held by the evaluators during the March 15th meeting, each candidate's proposal was presented with a detailed summary. Kirby stated that Synesi’s proposal was rejected by the evaluators until Martin suggested that it was necessary to ask further questions before dismissing Synesi entirely. Kirby stated that this second look was completely unnecessary and defeated the purpose of having an established cut-off score. Kirby stated that this is the only reason that Synesi had an opportunity to present at the oral interviews after submitting a poor proposal. 103. I-have also reviewed the IG-CBOE interview report of former CPS employee Jill Regen, who was also present at the March 15th meeting. She stated that ‘Synesi initially had low scores but that Martin spoke positively about Synesi at the meeting. Regan stated that after Martin endorsed Synesi, Synesi’s score increased and they were invited to the oral presentations despite their previous low score. 104, After the oral presentation stage, Synesi and three other proposers were selected for a “matching day,” a process whereby schools needing services met with the aCase: 1:14-mc-00485 Document #: 1 Filed: 09/11/14 Page 44 of 51 PagelD #:51 selected vendors and chose the vendor with which they wished to work. Synesi was eventually selected to work with four CPS schools and was awarded a contract for $844,110. 105. Under the terms of the Consulting Agreement Byrd-Bennett-entered into with the SUPES Entities before joining CPS, Byrd-Bennett was entitled toas much as $10% of the revenue generated from the Synesi contract. Although the contract was originally awarded for $844,110, a total of only $110,543 was paid on the Synesi contact, as CPS canceled the contract after, among other things, Synesi failed to gain ISBE Lead Partner approval. 106, Based on my training and experience in fraud investigations, I believe that a search of email provider account contents often yields investigative leads relating to: a. the identities of co-conspirators, customters, and other individuals congaged in federal program bribery, mail and wire fraud, and conspiracy to defraud the United States offenses; b. the contact information of co-conspirators, customers, and other individuals engaged in federal program bribery, mail and wire fraud, and conspiracy to defraud the United States offenses; 43Case: 1:14-mc-00485 Document #: 1 Filed: 09/11/14 Page 45 of 51 PagelD #:52 c. the timing of communications among co-conspirators, customers, and other individuals involved in federal program bribery, mail and wire fraud, and conspiracy to defraud the United States offenses; and d. the methods and techniques used in federal program bribery, mail and wire fraud, and conspiracy to defraud the United States offenses. SEARCH PROCEDURE 107. In order to facilitate seizure by law enforcement of the records and information described in Attachment A, this affidavit and application for search warrant seck authorization, pursuant to 18 U.S.C. §§ 2703(a), 2708()(1)(A) and 2703(¢)(1)(A), to permit employees of AOL, Rackspace, and/or Yaboo! to assist agents in the execution of this warrant. In executing this warrant, the following procedures will be implemented: a. The search warrant will be presented to AOL; Rackspace, and/or ‘Yahoo! personnel who will be directed to the information described in Section I of Attachment A; b. _ Inorder to minimize any disruption of computer service to innocent third parties, AOL, Rackspace, and/or Yahoo! employees and/or law enforcement personnel trained in the operation of computers will create an exact duplicate of the information described in Section IT of Attachment A, including an exact duplicate ofall information described in Section II of Attachment A;Case: 1:14-me-00485 Document #: 1 Filed: 09/11/14 Page 46 of 51 PagelD #:53 108. . AOL, Rackspace, and/or Yahoo! employees will provide the exact duplicate in electronic form of the information described in Section II of the Attachment A and all information stored in those accounts and files to the agent who serves this search warrant; and 109. Following the protocol set out in the Addendum to Attachment A, law enforcement personnel will thereafter review all information and records received from AOL, Rackspace, and/or Yahoo! employees to locate the information to be seized by law enforcement. personnel pursuant to Section III of Attachment 45Case: 1:14-me-00485 Document #: 1 Filed: 09/11/14 Page 47 of 51 PagelD #:54 CONCLUSION 110. Based on the above information, I respectfully submit that there is probable cause to believe that evidence and instrumentalities of violations of Title 18, United States Code, Sections 666 (federal program bribery), 1341 (mail fraud), 1343 (wire fraud), and 371 (conspiracy to defraud the United States) are located within one or more computers and/or servers found at AOL, 22000 AOL Way, Dulles, Virginia, 20166; Rackspace US, Inc., 1 Fanatical Place, City of Windcrest, San Antonio, Texas 78218; and at Yahoo!, 701 First Avenue, Sunnyvale, California 94089. By this affidavit and application, I request that the Court issue a search warrants directed to AOL, Rackspace, and Yahoo! allowing agents to seize the electronic evidence and other information stored on the AOL, Rackspace, and Yahoo! servers following the search procedure described in Attachment A and the Addendum to Attachment A. Le AFFIANT \ NOT. Steven W. Rausch Special Agent Fedoral Bureau of Investigation Subscribed and sworn before, 11th day of September, 2014 Fiondtible SIDNEY I. SCHENKIER ‘United States Magistrate Judge : 46Case: 1:14-me-00485 Document #: 4 Filed: 09/11/14 Page 48 of 51 PagelD #:55, ATTACHMENT A 1 Search Procedure 1. The search warrant will be presented to AOL personnel, who will be directed to isolate those accounts and files deseribed in Section II below. 2, Inordex to minimize any disruption of computer service to innocent third parties, company employees and/or law enforcement personnel trained in the operation of computers will create an exact duplieate of the computer accounts and files described in Section II below, including an exact duplicate of all information stored in the computer accounts and files described therein, 3. AOLemployees will provide the exact duplicate in electronic form of the accounts and files described in Section II below and all information stored in those accounts and files to the agent who serves the search warrant. 4. Following the protocol set out in the Addendum to this Attachment, law enforcement: personnel will thereafter review information and records received from company employees to locate the information to be seized by law enforcement personnel specified in Section ILI below. I. Files and Accounts to be Copied by AOL Employees a. Allelectronic mail, including attachments thereto, stored and presently contained in, or on behalf of, the following electronic mail address: ozbyrdbennett@aol.comCase: 1:14-mc-00485 Document #: 1 Filed: 09/11/14 Page 49 of 51 PagelD #:56 which are stored at premises owned, maintained, controlled, or operated by AOL, headquartered at AOL Corporate Legal Department, America Online, 22000 AOL Way, Dulles, Virginia, 20166. b. All existing printouts from otiginal storage of all the electronic mail described above in Section I1(a). c. All transactional information of all activity of the electronic mail addresses and/or individual accounts described in Section I1(a), including log files, dates, times, methods of connecting, ports, and dial-ups. d. All business records and subscriber information, in any form kept, pertaining to the clectronic mail addresses and/or individual accounts described above in Section II(a), including applications, subscribers’ full names, all screen names associated with the subscribers and/or accounts, all account names associated with the subscribers, methods of payment, telephone numbers, addresses, and detailed billing records. e. _ Allrecords indicating the services available to subscribers of the clectronie mail addresses and/or individual accounts described above in Section II(a). TIL. Information to be Seized by Law Enforcement Personnel a. All information described above in Section TI that constitutes evidence and instrumentalities concerning violations of Title 18, United States Code, Sections 666 (federal program bribery), 1841 (mail fraud), 1843 (wire fraud), and 371 (conspiracy to defraud the United States), as follows: 2Case: 1:14-mo-00485 Document #: 1 Filed: 09/11/14 Page 50 of 51 PagelD #:57 Electronic files, including computer source code, computer executable programs, email messages, electronic communications, attachments, and any other electronic files that contain information regarding: + Financial records, including receipts, checks, bank and savings and loan records of deposit, withdrawal and wire transfer, statements and other bank records, letters of credit, credit card statements, money orders, cashier's checks, passbooks, cancelled checks, certificates of deposit, loan records, customer account information, income and expense summaries, cash disbursement journals, financial statements, and state and federal income tax returns. ’ All of the records and information described in Section IT (c), (d), and (e). ADDENDUM TO ATTACHMENT A With respect to the search of any information and records received from the free web-based electronic mail service provider, law enforcement personnel will locate the information to be seized pursuant to Section III of Attachment A according to the following protocol, ‘The search procedure may include the following techniques (the following is a non-exclusive list, and the government may use other procedures that, like those listed below, minimize the review of information not within the list of items to be seized as set forth herein):Case: 1:14-me-00485 Document #: 1 Filed: 09/11/14 Page 51 of 51 PagelD #:58 a. searching for and attempting to recover any hidden, or encrypted data to determine whether that data falls within the list of items to be seized as set forth herein. be surveying various file directories and the electronic mail, including attachments thereto to determine whether they include data falling within the list of items to be seized as sot forth herein. . opening or reading portions of electronic mail, and attachments thereto, in order to determine whether their contents fall within the items to be seized. as set forth herein, and/or a performing key word searches through all electronic mail and attachments thereto, to determine whether occurrences of language contained ih such electronic mail, and attachments thereto, exist that are likely to appear in the information to be seized described in Section III of Attachment A. ‘Law enforcement personnel are not authorized to conduct additional searches on. any information beyond the scope of the items to be seized by this warrant.