CHARLESTON, SC (WCSC) - Berkeley County School District has filed a new lawsuit against its former chief financial officer, Brantley Thomas, and the financial advisers and bond counsel they claim benefitted from Thomas’s criminal enterprises.
Compass Municipal Advisors; First Southwest Securities, now known as Hilltop Securities; Burr & Forman, LLP, formerly known as the McNair Law Firm, PA; Frannie Heizer, Brian Nurick, Michael Gallagher, and Brantley Thomas have been named as defendants.
“BCSD maintains that these former professional advisors failed their fiduciary duties owed the District and served their own interests and those of the former BCSD Chief Financial Officer Brantley Thomas instead of serving as a firewall against Thomas’ corruption, embezzlement and misappropriation of District funds,” a press release said. “As outlined in the Complaint, these trusted former advisors actively and closely associated with Thomas and benefitted from recurring and lucrative business and fees. Mr. Thomas has been sentenced to federal prison and awaits a state court sentence in the largest known public embezzlement and corruption scheme in state history.”
Sally Wofford, the chairwoman of the Berkeley County School Board, said this lawsuit is a major step toward ensuring justice for the children and families of Berkeley County.
“These individuals failed this district in multiple ways and put their own self-interest ahead of their fiduciary duties,” Wofford said in a statement. “This Board is committed to taking every step necessary to ensure that the people of Berkeley County are made whole, and we will continue to pursue every avenue of justice to see to it that those who harmed the children of Berkeley County are held accountable for those actions.”
The complaint alleges the defendants abandoned their fiduciary duties in exchange for access to millions of dollars in public funds for their personal gain, all at the expense of the District and the taxpayers of Berkeley County.
“Thomas could not accomplish, and successfully conceal, such an elaborate scheme of corruption alone,” court documents say. “Here, the question is ‘where were the District’s financial advisors and legal counsel?’ The answer is that they were actively and closely associated with Thomas and benefitted from recurring and lucrative business and fees.”
The superintendent of the Berkeley County School District said these professionals failed the district and the county’s taxpayers in favor of personal gain.
“To best serve those who depend on us, public school districts rely on professionals, including bond counsel and financial advisors, to advise, protect, and guide districts in matters that fall outside of our own professional expertise,” Dr. Eddie Ingram said. “Our Board and administration are extremely concerned about the fraud that was committed against this District, and we look forward to the justice system’s resolution of these wrongdoings.”
The complaint details the “complex” and “multi-faceted” web of fraud, corruption, conspiracy, and professional negligence involving the defendants, and it details how the District believes the defendants successfully concealed these issues for years.
One aspect of those claims is a violation of the South Carolina Ethics Act. Court documents say Thomas caused the District to engage defendants as financial advisors while his brother-in-law was employed with them.
“The Financial Advisor Defendants were fully aware of [ Michael ] Gallagher’s familial relationship with Thomas and that Thomas, in engaging the services of the Financial Advisor Defendants, was using his official office to obtain an economic interest for himself and the Financial Advisor Defendants that was in violation of the State Ethics Act,” court documents said.
The school district is asking for a jury trial and a judgement of $50 million and trebled damages or other amount to be determined at trial, plus punitive damages, pre-judgement and post-judgement interest at the maximum rate allowed by law, attorneys’ fees, court costs, and such further relief deemed by the court.
“Thomas has been sentenced to federal prison and awaits a state court sentence in the largest known public embezzlement and corruption scheme in state history,” the press release said.