Foundation not targeted by Shurtleff
None of the Utah school districts saddled with debt by the now-bankrupt National School Fitness Foundation have asked the Utah Attorney General's Office to proceed with criminal charges, according to spokesman Paul Murphy.
Cameron Lewis and his father, Ty Lewis, headed the foundation until spring 2004, when allegations surfaced that it had stopped making promised reimbursement payments for $77.5 million in fitness equipment it placed in some 600 schools in 20 states.
Cameron Lewis, 34, was terminated as president in June after an independent auditor reviewed the foundation's records and found major financial discrepancies. Ty Lewis, 63, a former San Juan County commissioner who was chairman of the foundation's board, resigned after his son was taken out of his post.
A total of 131 Utah schools bought into the foundation's program, which required schools to buy the foundation's high-tech fitness program with the expectation that the money would eventually be reimbursed by the foundation through donations and grants, and were left with hefty tabs.
Alpine has since paid off that debt, and its schools continue to use the equipment, said district business administrator Rob Smith.
"The question is: Did we pay too much?" Smith said.
Alpine spokeswoman Jerrilyn Mortensen said the school district determined that it would not be "a good use of taxpayer dollars" to press for charges or file lawsuits against the defunct charity.
Alpine, Jordan and Granite school districts are taking part as creditors in the foundation's Chapter 11 bankruptcy pro- ceedings.
"The bankruptcy process is proceeding, and there might be some recovery at some point," Smith said, "but we'll have to wait and see what those proceedings yield."
On Oct. 20, 2004, Cameron and Ty Lewis were charged with felonies in federal court in Minnesota for allegedly defrauding school districts. The executives each were charged with four counts of bank fraud, eight counts of mail fraud, 12 counts of wire fraud and 16 counts of money laundering.
A series of legal motions during the past year has kept the case from moving forward, according to the Minnesota U.S. Attorney's Office.
The indictment alleges that Cameron Lewis and Ty Lewis failed to tell school districts about the foundation's lackluster fund raising and precarious financial condition and that prior school districts had been reimbursed almost exclusively from payments made by other schools. Instead, the schools were told that the foundation would reimburse the cost of the equipment through government and private donations.
You can be the first to comment on this story.