State prosecutors have indicted a former Arizona Department of Education employee and six other suspects in an embezzlement case involving about $250,000 that should have gone to benefit special education students.
At least five of the seven suspects will appear Wednesday in Maricopa County Superior Court to answer felony charges of racketeering, fraud and theft.
Arizona Attorney General Terry Goddard called the case a significant breach of trust by a public official. He said prosecutors will seek repayment of the stolen money and possible prison time for each suspect.
"It’s very high on our priority list," he said.
The state alleges former Department of Education employee Theresa Ann Schambach, 28, began submitting counterfeit invoices and travel claims in 2001 for training that never occurred.
The purpose of the training, which Schambach coordinated for the state, is to show school employees how to conduct mediation involving special education students. Under legitimate circumstances, contract employees provide this service and charge the state $200 per session.
A search warrant served in the case accuses Schambach, a Glendale resident, of listing relatives and friends as payees on the reimbursement checks.
"They helped her generate the false invoices, which were then paid by the state," Goddard said.
Some invoices were for services allegedly provided at Glendale Community College, Arizona State University and other colleges. The education department, however, does not provide services beyond the high school level.
Besides Schambach, suspects in the case include 25-year-old Brandi Kay Casino of Peoria, 32-year-old Steven Michael Madden of Anthem, 25-year-old Erin Rae Holmes of Phoenix and 23-year-old Erica Lei Nedella of Peoria.
As of Monday afternoon, the state had not released the names of the other two suspects because those people had not yet been notified of the indictments against them.
Of the five suspects named so far, only Schambach is an employee or former employee of the education department, state officials said. Schambach was placed on unpaid leave in May and resigned Aug. 11.