School founder arrested for theft
Vail CO, Colorado
AVON ” As Stone Creek Elementary opened its doors to Eagle County kids last fall, its founder was stealing money from the struggling charter school checking account, Avon police say.
Bill Hammer was arrested Thursday in Jefferson County, accused of stealing $68,539 from Stone Creek to help his two failing businesses and to pay off a lawsuit to the Vail Resorts Development Corporation, police say.
Police had issued an arrest warrant, but couldn’t find him locally. Soon after the news broke on the Vail Daily’s Web site, a reader called police with a tip on his whereabouts. Avon police then called the Jefferson County Sheriff’s Department, who found him in Evergreen.
The theft is a class three felony and could put Hammer in prison for four to 12 years if convicted. His bond is set at $75,000, and he’ll be given a court date to appear in Eagle County.
The news is upsetting ” but not necessarily shocking ” to the people still running Stone Creek. Earlier this year, the school board disclosed a series of financial problems that had gone unchecked since the school opened and put the school behind in bills. Expenses outpaced the money coming in, and the school board was soon looking a giant debt in the eye.
There was always suspicion that something illegal had happened, but no solid proof, board president Kevin Kromer said. Now, the board is faced with the real possibility that Hammer did more than simply mismanage the school’s money, which is an unsettling thought.
“We knew how much time he put into getting the school up and running, it’s a hard concept to accept,” Kromer said. “People trusted Bill ” the people at the state who gave him the charter, and the parents putting their kids in the school.”
Police were approached by newly elected members of the Stone Creek Board of Directors in February who were concerned about discrepancies they discovered in the school’s financial records.
Treasurer Kevin Randel said he and other board members weren’t prepared for the mess they found in the books. The records were scattered, incomplete and didn’t quite add up.
They also found a slew of unaccounted for funds ” checks written without matching receipts or invoices adding up to more than $68,000.
Hammer had stepped down as president of the board of directors, and at a February meeting, he was voted off the board entirely after being accused of mismanaging the school’s money. He denied the mismanagement at the meeting, but hasn’t returned phone calls requesting comment since, including one placed Thursday, after news of his arrest.
The records were indeed scattered and incomplete ” but once they went through check by check and rebuilt the books, the fraud was pretty blatant, Det. Paul Arnold said.
“It was way out in the open ” not how most people do fraud,” Arnold said.
Checks written directly from Stone Creek’s account were found deposited in Hammer’s personal business accounts for Noel, a Christmas shop in Beaver Creek, and the Oregon Country Tree Farm, a business in Oregon, Arnold said.
Both those businesses were failing, Arnold said. “The books showed he had $182,000 in losses in his businesses. He was losing money in both.”
Hammer was also behind on rent at his shop in Beaver Creek, and Vail Resorts Development Corporation sued him. Hammer paid them off, but with Stone Creek money, Arnold said.
“He wrote a check to Wells Fargo, then they made it a cashier’s check, and when he paid off Vail Resorts, they never knew where the money was coming from,” Arnold said. “The school didn’t realize where the money went because the check was made to Wells Fargo.”
Aside from how he paid off Vail Resorts, Hammer didn’t do much to cover up that he was spending the school’s money, Arnold said. Instead, the fact that Stone Creek was just starting and owed a lot of money to a lot of people, and that Hammer didn’t keep financial records, made it difficult for investigators to determine where the money really went.
Looking back, that $68,539 definitely made a difference in the school’s problems, Kromer said.
“I don’t know how much in interest or in other damages we might incur because we couldn’t pay debts in the time they were created,” Kromer said.
The school overestimated its enrollment numbers, which means it received more state funding per student than it should have, according to Randy DeHoff, executive director for the Colorado Charter School Institute.
At first, Stone Creek received money for 250 kids, while only 151 were actually enrolled. Stone Creek was denied state funding for December and had its funding severely cut through May to make up the money.
The rest of the debt comes from leftover building expenses, teacher salaries and everything else you need to run a school. There were also unanticipated construction costs and about $400,000 in grants and fundraising that were budgeted for but never came in.
The total debt started around $1.8 million, although about $1.2 million of that is the cost of the school building. While financial troubles are common for startup schools, the situation was made worse by inexperience and poor communication in the beginning, board members have said.
Staff Writer Matt Terrell can be reached at 748-2955 or email@example.com.