INDIANAPOLIS | Crown Point Community School Corp. will receive a payout topping $3 million later this month, its share of a securities fraud settlement between the Indiana secretary of state's office and the Indiana State Teachers Association.
Secretary of State Connie Lawson announced Tuesday that ISTA has agreed to repay $14 million of the $27 million the teachers union collected prior to 2009 for educator health insurance premiums that allegedly was used for other purposes.
"ISTA took money from one fund to pay claims and cover deficiencies of another, then issued falsified statements to clients to create the illusion of funds," Lawson said. "This is a classic example of a Ponzi scheme."
Teachers union President Teresa Meredith denied ISTA used the money for its own benefit. She said the settlement will be paid with proceeds from litigation against those responsible for the collapse of the ISTA Insurance Trust.
Republican former Secretary of State Todd Rokita, a Munster native, initially sued ISTA in 2009. He alleged the union's insurance program violated numerous Indiana securities laws, which the secretary of state enforces.
Lawson, a Republican who took over the office last year, said she believes the state could have gotten schools more than the settlement award of some 50 cents on the dollar, but wanted to avoid "endless litigation."
Indiana already has spent more than $1 million of its securities fines revenue on attorney fees for this case.
Crown Point is getting more money back than any of the 26 other affected school corporations: $3,040,851.39.
Also sharing in the settlement are Michigan City Area Schools, $319,711.05; and Rensselaer Central Schools Corp., $216,090.70.