Alleged scrap-selling scheme at NIU results in charges against 9 current, former employees
(MCT) — Nine current and former Northern Illinois University employees were charged with felonies Tuesday in an alleged scheme to sell university scrap materials and deposit the proceeds in a private bank account.
Eight of the individuals were charged with felony theft, including a former senior administrator, Robert Albanese, who had been NIU's associate vice president for finance and facilities before he resigned in July while under investigation for misconduct.
NIU police began the investigation into the unauthorized bank account, known as the "coffee fund," on Aug. 3, school officials said. At least $13,000 had been deposited into the account in the past six years, and about $2,100 was in it when it was closed in August and the balance transferred to the university's general fund.
Employees allegedly had sold university scrap materials, including those from campus building renovations, and used the money as a slush fund for holiday parties, retirement celebrations and similar social uses.
NIU police Sgt. Alan Smith said his department turned its findings over to the DeKalb County state's attorney's office Sept. 4.
But NIU administrators were caught off guard by the criminal charges -- and the scope of the investigation -- announced Tuesday afternoon by the state's attorney's office.
One of the employees charged, Controller Keith Jackson, had been given responsibility in late August for improving university procedures related to property control in the wake of the coffee fund allegations.
Jackson, 55, of Hinckley, was assigned to a three-member "policy review" committee charged with reviewing and updating all procedures related to property control, recycling and the disposition of surplus materials, according to a university news release at the time.
Jackson, charged Tuesday with felony misconduct and obstruction of justice, is accused of failing to properly submit proceeds from recycled NIU property and of moving money from the coffee fund account into another account he controlled. A man who answered a phone number listed to Jackson hung up when contacted by the Tribune.
"Anytime you have a situation that results in nine people being charged with felonies, it may raise some questions about the integrity of the institution," State's Attorney Clay Campbell told the Tribune. "I am aware of the public's concerns about the integrity of governance across the state. We are mindful of that lack of faith in our public institutions."
Albanese, who worked at NIU for 25 years, resigned in July as he faced "serious and substantial" misconduct allegations unrelated to the coffee fund, according to his separation agreement. He was paid $45,000 in severance. The allegations against him at the time included using NIU property for himself and his family and keeping university property at his home for personal use, the Tribune reported last month.
Albanese, 62, of Elburn, was charged with felony theft and official misconduct on allegations he misused recycled materials and the proceeds obtained from those materials.
Albanese told the newspaper Tuesday evening that he was unaware employees were depositing scrap material proceeds into an unauthorized account.
"As far as I was concerned, whatever we sold, we put the money in the state of Illinois and deposited it," Albanese said. "It happened somewhere in my department, allegedly -- that is my only involvement. It happened under my watch, and that is all I know at this point."
The others charged either could not be reached for comment or hung up when contacted by a reporter.
Charged with felony theft and felony official misconduct were Michael Hall, 55, of Shannon; Lawrence Murray, 51, of Rochelle; Susan Zahm, 58, of Hillcrest; Kenneth Pugh, 56, of Sycamore; Keenon Darlinger, 36, of DeKalb; and Mark Beaird, 52, of Kings.
Joseph Alberti, 56, of DeKalb, was charged only with felony theft related to a computer monitor.
Pugh is the director of the Materials Management Department, and many of the others oversee other functions within the department, according to an NIU website. Four of the employees -- Murray, Zahm, Darlinger and Pugh -- were placed on paid leave in late August.
The department reports to NIU Vice President Eddie Williams, who did not return a call from the Tribune.
NIU spokeswoman Kathryn Buettner said school officials are "eager to get to the bottom of what happened."
"These are serious allegations," she wrote in an email. "As soon as additional information becomes available, we will provide further comment."
NIU President John Peters, 67, who announced last week that he will retire next year, said his decision was unrelated to the ongoing investigation.
Tribune reporter Michael Holtz and freelance reporter Clifford Ward contributed.