- Associated Press - Wednesday, December 14, 2016

TERRE HAUTE, Ind. (AP) - A federal grand jury indicted two former western Indiana school officials Wednesday on wire fraud and other charges for allegedly embezzling more than $80,000 through a kickback scheme with a contractor.

The indictment charged former Vigo County School Corp. facilities director Frank Fennell and Frank Shahadey, an ex-Vigo County deputy sheriff who was assigned to the school district, with nine counts of wire fraud and one count of theft. Fennell also faces two counts of making false statements.

The two men were charged last month with theft or bribery of programs receiving federal funds for allegedly taking kickbacks from a contractor over 2½ years. The indictment returned Wednesday in Indianapolis said the unidentified contractor completed 58 jobs for the school corporation for an artificially inflated total cost of $440,000, of which $80,500 went to Fennell and Shahadey in kickbacks.

The FBI raided school district offices on June 8. The false statement counts allege Fennell denied accepting anything of value from a school contractor during interviews with FBI agents on June 8 and 12.

The school corporation has fired both men. Shahadey also resigned from the sheriff’s department.

The school corporation issued a statement Wednesday thanking the FBI and federal prosecutors and saying it will continue to cooperate with law enforcement in the case.

Messages seeking comment were left for attorneys for the two men.

WTHI-TV reported Shahadey continues to be held at a detention center in Henderson, Kentucky. Fennell was released following his arrest.

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