Attorney General Brnovich Announces 4 Individuals Indicted in Fraud Scheme Related to Higley School District

PHOENIX --- Attorney General Mark Brnovich announced today that a State Grand Jury indicted Denise Birdwell, Gary Aller, Steven Nielsen, and Kay Hartwell Hunnicutt for their alleged role in the procurement for construction of the Elona Ranch and Sossaman middle schools in Higley Unified School District (HUSD).  
HUSD was required to follow the procurement process when issuing Request for Proposal 013-203. The procurement process prohibits any party that provides input on a project from receiving any direct or indirect benefit from the project. The indictment alleges that in 2012, Birdwell, who was HUSD Superintendent at the time, was aware that Aller and Nielsen had participated in the pre-bid process which provided a competitive advantage to a bidding company owned by Aller and Nielsen, Education Facilities Development Services (EFDS), and disadvantaged other bidders. It is further alleged that despite EFDS’s principals participation in the procurement process, EFDS was awarded the contract under RFP 013-203.
Following the award of RFP 013-203 to EFDS, Birdwell, Aller, and Nielsen are accused of signing documents related to the project attesting that the award of RFP 013-203 was done in compliance with the HUSD’s procurement rules and the Arizona Administrative Code. 
Birdwell was also charged with two counts of Violation of Duties of a Custodian of Public Monies for allegedly approving the use of $6 million in Adjacent Ways Funds to facilitate the private bond funding required to build the two middle schools. Use of Adjacent Ways Funds is limited to making improvements to assure the safe ingress and egress to the schools. Adjacent Ways Funds are not fungible and may not be mingled with other funds. 
The State Grand Jury also charged Birdwell with seven counts of Conflict of Interest alleging that she had a substantial interest in payments from school vendors, including architectural firm Hunt & Caraway and Core Construction.  It was purported that many payments were deposited into a bank account Birdwell held jointly with Kay Hartwell Hunniuctt. The indictment further alleges that neither Birdwell nor Hunnicutt claimed these payments on their tax returns resulting in the State Grand Jury returning three counts of filing a False Tax Return against Birdwell and three counts of filing a False Tax Return against Hunnicutt.  
All defendants are presumed innocent until proven guilty in a court of law.
Assistant Attorney General Mary Harriss is prosecuting the case.
The Auditor General’s report can be found here.

Copy of indictment here.