Ex-Palmer Company Executives Admit Defrauding Schools

Two former executives of a Palmer Township athletic equipment supply firm each face 20 years in prison after admitting their roles in a scheme to defraud schools.

, 81, of Highland Beach, Fla., pleaded guilty Tuesday in federal court in Newark, NJ to one count of mail and wire fraud conspiracy.

he Easton Express-Times said Kurlander is from South Whitehall and Abeshaus was a former Palmer Township resident.

Kurlander and Abeshaus served as chief financial officer and chief executive officer, respectively, of Circle Systems Group Inc., which had contracts with a number of Pennsylvania and New Jersey school districts.

The athletic apparel and equipment firm systematically defrauded school districts from at least 1997 to 2007, according to a release by U.S. Attorney Paul Fishman, by keeping duplicate payments from schools that should have been returned, submitting fake quotes to districts and preparing fraudulent invoices to schools.

The allegations also involve cash payoffs and gifts, authorities say.

“The long-running fraud Kurlander and Abeshaus ran cheated students, teachers and the taxpayers who support them,” Fishman said. “Just as offensive is the conduct of school officials who turned a blind eye to the deceit in exchange for cash payoffs and gifts. The admissions of guilt by these two main defendants will help turn a page on this sorry chapter.”

Circle Systems kept at least $822,000 in overpayments from districts that were used for Abeshaus' personal benefit, Fishman said. Kurlander also allowed Circle employees to make gifts and donations to school officials as a "routine business practice" and "routinely inflated Circle's invoices for services and goods ... to reimburse Circle for these donations and gifts," Fishman said.

Circle also submitted bids for equipment reconditioning work that were lower than the prices they actually ended up charging, by fraudulently inflating the quantity or nature of the work by submitting other invoices to the schools.

“These well-orchestrated schemes not only affected the schools they were defrauding, but innocent students and taxpayers as well," said David Velazquez, FBI acting Special Agent in Charge.

They are not the only participants.

Former Circle President David Drill and two New Jersey high school officials who previously pleaded guilty in connection to the scheme are awaiting sentencing.

Kurlander and Abeshaus are scheduled to be sentenced July 9, with each facing a maximum penalty of 20 years in prison and a $250,000 fine.