admin
An Ohio grand jury has returned a multi‑count indictment charging businessman Michael Perik and two associates in an alleged scheme that diverted roughly $20 million in federal Pell grants and other aid tied to Eastern Gateway Community College. The indictment, announced by Ohio Auditor of State Keith Faber with U.S. Under Secretary of Education Nicholas Kent at his side, is the latest chapter in a case that has already produced political fallout and a tidal wave of questions about how federal student aid is policed.
What the indictment says
The indictment alleges a coordinated racketeering and fraud enterprise that used for‑profit entities and consulting contracts to siphon federal and state education dollars. Michael Perik, Nicole Rowe Colclasure and Michael Geoghegan face multiple felony counts — including racketeering, aggravated theft, money laundering, bribery, telecommunications fraud and receiving stolen property. As the filing puts it, the enterprise “functioned for the general purpose of obtaining as much money as possible from the disbursement of Federal financial aid and State subsidies and then diverting those disbursements.” Ohio Auditor Keith Faber said students in a poor region were left “out in the cold,” and U.S. Under Secretary Nicholas Kent emphasized that protecting Pell grants from fraud is a top Department of Education priority.
How the scheme allegedly worked
According to the indictment and the auditor’s investigation, the alleged scheme centered on manipulating enrollment, attendance verification and financial‑aid administration. The defendants purportedly used contracts and related companies to control who was enrolled and how aid was disbursed, including a union‑linked “Free College Benefit” program that helped fuel rapid online growth. Prosecutors say aid was paid to ineligible students, bogus reimbursements were made, and illegal incentive compensation went to outside entities — practices that auditors say helped drive Eastern Gateway into collapse. The conduct is described as spanning the years when online enrollment boomed and oversight lagged.
Political fallout and accountability
Beyond the criminal counts, this case has political consequences. Michael Perik had given six‑figure sums to Democratic causes and candidates, and his wife, Liz Beretta‑Perik, resigned her post as chair of the Rhode Island Democratic Party after the indictment became public. Perik’s attorney calls the charges “purely political payback,” but allegations of theft and bribery are not partisan talking points — they are criminal charges that demand proof in court. Voters and students deserve to know which public officials and agencies signed off on contracts and why oversight systems failed while millions in federal aid went missing.
Why this matters
Pell grants are meant to lift low‑income students into opportunity, not line the pockets of private operators. If the indictment’s facts check out, the priority must be making victims whole and tightening controls so this never happens again. Prosecutors should pursue the evidence, auditors should publish full findings, and Congress should consider tougher accountability for schools that treat federal aid like an ATM. Call it what it is: when “free college” becomes a cover for alleged theft, the people who paid for that promise — students and taxpayers — are the ones left holding the bill.
