Ex-dean: Grants investments were valid

LOUISVILLE, Ky., April 9 (UPI) -- An ex-university dean charged with money laundering and tax evasion told U.S. investigators he invested grants in property to fund his research non-profit.

Former University of Louisville (Ky.) education Dean Robert Felner told federal investigators he and colleague Thomas Schroeder of Port Byron, Ill., used the federal grant money to buy property around the country so they could grow a non-profit organization he created for educational research, a transcript of his testimony said.

"The reason we invested in the houses, the reason we brokered the account, were to just to try to build something up so we could actually have the money to do the kind of work that we wanted to do," Felner said June 20, 2008, at the university's College of Education and Human Development.

Felner and Schroeder have pleaded not guilty to federal charges of mail fraud, conspiracy to commit money laundering and defrauding the Internal Revenue Service, The (Louisville) Courier-Journal reported.

Government prosecutors allege the men used their Illinois-based National Center for Public Education and Prevention Inc. to defraud the University of Louisville and the University of Rhode Island, where Felner was involved in another research center he helped create, of $2.3 million, the newspaper said.

Prosecutors allege Felner moved the money into personal accounts, bought properties in Florida, Kentucky and and Rhode Island and used money from the accounts to have landscaping done at the properties, pay property taxes and mortgage costs and fix a home spa.

The properties are in Felner's name, but he told investigators during the interview he bought them as investments for the Illinois-based center.