A former high-ranking Chicago State University official and the official’s mother were indicted Thursday on felony corruption charges for an alleged “ghost payroll” scam.
Cook County State’s Attorney Anita Alvarez announced the charges against 43-year-old Lashondra Peebles and her 65-year-old mother Shirley Kyle alleging Peebles hired her mother and steered a university consulting contract to a family friend.
According to prosecutors, Peebles was working as Director of Compliance and Interim Vice President for Enrollment Management at the university in March of 2014 when she arranged for her mother to be hired as an employee. She created and posted an available part-time position on the university’s website, receiving more than 3,000 applications for the position before hiring Kyle, prosecutors said.
Kyle filled out hiring paperwork at the university on March 3 and was employed until May 30, though she was never seen on campus and did not report to her assigned department, officials alleged. Peebles also allegedly never told her co-workers that Kyle was her mother.
Kyle received nearly $4,500 from the university during her employment.
Peebles was terminated from her position at Chicago State in June of 2014 after an internal investigation uncovered “financial misappropriations,” which the university then reported to the state’s attorney’s office.
She allegedly made a request to a university superior to enlist the consulting services of a company called PMO501. The request was denied by her superior on the grounds that the university did not need the services, but Peebles entered into a contract anyway and used a Chicago State credit card, which she did not have authority to use, to pay the organization a total of $4,748, prosecutors claim.
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Investigators later discovered the company was owned by a family friend of Peebles.
Officials claim that in addition to using the university credit card, Peebles manipulated computer software at “several levels” to obtain approval for the contract.
Peebles, of Chicago, is charged with six counts of theft by deception at a school, five counts of official misconduct, two counts of wire fraud and four counts of computer fraud.
Kyle, who lives in Oak Park, has also been charged in the case and faces two felony counts of theft by deception at a school for accepting payment for work that was never performed.
“This was a bold and brazen scheme that defrauded not only Chicago State, but all of the students that attend this university,” Alvarez said in a statement. “At a time when public funding for our colleges and universities is stretched to the limit, a crime like this is even more reprehensible.”
A university spokesperson said the school is "disappointed" by the findings of the investigation.
"We are disappointed that we placed our faith in someone who ultimately betrayed that trust," said spokesman Tom Wogan. "We are pleased that our internal controls were able to catch these wrongdoings early enough to limit the financial damage to the univeristy."
The school, which faces tough financial constraints amid a budget stalemate in Illinois, said the incident won't impact school services.
"We are stretching our dollars very thin right now," Wogan said. "We're on a very, very tight budget so it was certainly unwelcome, but we caught it early enough that the dollar amount didn't disrupt any services."
Neither Peebles nor Kyle have previous criminal histories, officials said. It was not immediately clear if either had an attorney.
