Former School District Director Allegedly Steals Millions

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CUYAHOGA Heights, Ohio -- A special new state audit reveals that a former Cuyahoga Heights School District director allegedly stole nearly $4.2 million from the school district in an intricate scheme.

According to the special audit report by the state, the money was taken from the district through an intricate scheme by its former IT Director Joseph Palazzo and vendors he did business with, including his brother.

"This has been devastating to the entire community to see that so much money has been taken from this district, and taken out of the hands of children," says Cuyahoga Heights School District Superintendent Dr. Edwin Holland.

According to the audit findings, Palazzo allegedly authorized 436 payments for equipment to be bought for the district totaling $3,844,155 from seven companies for which the district received no goods or services.

The audit reveals the payments went to associates who were owned or operated by family members or friends of Palazzo.

There were also another 179 transactions totaling $336,495 for goods and services that cannot be located by the district. 

"We actually had not only looked at the documents, but we had staff on the ground who went to look for the equipment that had allegedly been purchased and it didn't exist," says Dave Yost, Auditor of State.

Additionally, a review of Palazzo's bank records reveals he received an alleged kickback from four of the seven vendors totaling $1,308,194.

Some parents who attended Tuesday's press conference say it's a shame a former school employee allegedly stole from students.

"I'm very saddened, my heart goes out to all the kids and children in this community that were basically abused by this system and didn't receive the full benefits they should have had," says Ben Rosolowski of Valley View.

Palazzo no longer works for the Cuyahoga Heights school district.

He resigned in February of 2011 and the district's school superintendent says measures have been put in place to correct this problem.

"So, we have been very pro-active to try and correct these problems from the past, but also put controls in place to prevent it from happening again in the future," says Dr.Edwin Holland, Cuyahoga Heights School Superintendent.

The findings in the special audit have been turned over to the Cuyahoga County prosecutor's office, and charges could be pending against Joseph Palazzo.

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