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Former Arizona school leader accused of misusing funds in $1.5M scheme

Jeffrey Van Handel is accused of not disclosing his substantial interest in a nonprofit that had financial contracts with the school district he oversaw.

PINAL COUNTY, Ariz. — An Arizona grand jury has indicted a former school superintendent for allegedly funneling funds between their school district and a nonprofit they simultaneously managed in a financial scheme that inflated their pension benefits. 

Jeffrey Van Handel, who served as superintendent of the Toltec Elementary School District until his resignation in 2017, is facing charges of fraud and theft for allegedly not disclosing how money was getting exchanged between the district and Van Handel's nonprofit. 

The Arizona Attorney General's Office announced this week it had obtained an indictment against Van Handel and Eileen Crumbaker, the district's former business services director, for their connections to a nonprofit that had financial contracts with the Pinal County school district.

According to the Arizona Auditor General, Van Handel had been CEO of the World School Foundation, an organization that had the mission of owning and operating charter schools. Crumbaker had been the chief financial officer of WSF. 

Up until June 2014, the bank balance of WSF had been no more than $100. But the nonprofit's accounts substantially increased over the next two years after Van Handel and Crumbaker allegedly deposited over $462,000 of their personal funds into WSF, according to the auditor's report.

Those funds would then be used to pay invoices the district was charging WSF for "administrative services." The district had approved a contract calling for WSF to pay $12,500 and $13,667 in monthly rates to the defendants.

Auditors believe Van Handel and Crumbaker orchestrated this arrangement to fraudulently inflate their pension benefits through the state retirement system.

"Their actions resulted in liabilities against the District and WSF totaling approximately $1.5 million," the auditor's report states.

The state retirement system notified Toltec in 2019 that Van Handel had allegedly received "a 216.35% increase in compensation resulting in an increase to their monthly benefit amount,” public records show. 

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Local media outlets and community members started asking questions about Toltec's relationship with WSF in 2016, but Van Handel defended the business contracts and called the attacks on him a "smear" campaign.

As a small district serving only about 1,000 students in Eloy and Arizona City, Toltec Elementary generates about $9 million in revenue each fiscal year. So the district's families were skeptical as to why so much money was being funneled between WSF and the district.

“At the very least what transpired was unethical," one local resident told the Eloy Enterprise in 2016.

The Auditor General's Office concluded in its 2022 report the defendants took advantage of their positions within the district to hide their alleged misconduct.

"Dr. Van Handel and Ms. Crumbaker appear to have abused their positions of trust at the District and at WSF to personally benefit from agreements between the District and WSF that provided no perceivable benefit to either the District or WSF," auditors wrote in their report.

Some of the charges against the defendants are listed as Class 2 felonies, which can result in significant prison sentences if convicted. 

Van Handel and Crumbaker are scheduled to be arraigned in court for the felony charges on May 31.

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