June 16, 2015

The Fake Scholastic Swindler pleads guilty

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Unfortunately, most fake invoices do not carry this sticker.

Unfortunately, most fake invoices do not carry this sticker.

The long, sad story of the Scholastic School Swindler has taken a big step towards its conclusion. Robert S. Armstrong, who devised a scheme to defraud hundreds of thousands of dollars from schools across the country, recently pled guilty in federal court to one count of mail fraud.

Armstrong’s scheme relied on two axioms; that textbooks are always seen as necessary, and schools don’t pay enough attention to accounts payable. The former elementary school vice principle started by opening a brazenly fake LLC named “Scholastic School Supply” (which, for those of you not familiar with the schoolbook trade, is like opening a fake smartphone company called “Macintosh Gügle), which consisted of nothing but a PO Box and the will to defraud. Armstrong then proceeded to mail 70,000 fake invoices, complete with fake ISBNs, to elementary schools nationwide, in an attempt to trick them into paying for books that never existed.

While news of fake invoices for $647.50 began to spread, no school openly admitted to being defrauded. But these types of consumer frauds are difficult to contain, and though Armstrong failed to adequately or even semi-adequately cover his tracks and was eventually arrested, he continued collecting illicit checks while out on bail. He was arrested again, and charged with running a similar scam on colleges. All in all, he was accused of bilking his marks out of over $350,000.

In February one of the victim schools, Blackfoot Charter, went public about their experience as part of a CBS Philly investigative team report into the Armstrong case.

“I was deeply disappointed that someone would do this to us … We are such a low funded school. We struggle for every penny we can get. This plan was so well devised and the timing was so perfect that they were able to sneak it through on us,” said Blackfoot Charter School’s director, Fred Ball.

CBS’s Charlotte Huffman managed to get Armstrong on camera, after an initial (and very profane) refusal. He foregrounds his record as an educator, as well as displaying masterful use of the passive voice.

“I’ve been an educator for 16 years. I would never do anything intentionally to defraud any school,” said Armstrong.

“So how do you explain this invoice?” Huffman asked Armstrong.

“If you speak to my lawyer he would be more than happy to talk to you about that,” Armstrong said.

“But surely you can explain this invoice for textbooks,” said Huffman.

“Invoices were sent. Some on my behalf and some were not authorized. That’s pretty much all I can say,” Armstrong responded.

CBS also reported that the number of schools that paid the fake invoices was likely much higher than originally claimed by the U.S. Attorney, and now, that number is coming into focus. The amount that Armstrong pled guilty to stealing tops out at a whopping $612,774, which comes to almost a thousand dupes assuming each school paid the $647.50. Armstrong accepted a plea deal of 44 months in prison, and has agreed to repay the balance of what remains after investigators conclude their recovery of funds from his frozen accounts. As part of the plea, the U.S. Attorney will not pursue charges for Armstrong’s college scam.

While Armstrong faces sentencing in September, the question remains; how will schools get their money back, if at all? The answer, unfortunately, doesn’t yet exist, and the U.S. Attorney says there is no timeline for restitution. Any victim schools who have not yet reported the fraud can still do so, though the judge indicated that a significant enough rise in the number of reported victims would sway his decision to accept the defendant’s plea, which puts Armstrong in the position of rooting against his own scam, and hoping that schools remain too humiliated or oblivious to report.

 

Liam O’Brien is the Senior Sales & Marketing Manager at Melville House, and a former bookseller.

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