Ex-Scottsdale district CFO indicted in conflict of interest case

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Laura Smith (Source: Scottsdale Unified School District) Laura Smith (Source: Scottsdale Unified School District)
SCOTTSDALE, AZ (3TV/CBS 5) -

A grand jury has indicted Scottsdale Unified School District's former chief financial officer on 11 felony counts in a conflict of interest case, the Arizona Attorney General's Office said on Monday.

Laura Smith is now facing nine counts of conflict of interest and two counts of fraud.

[RELATED: Report released on former Scottsdale district's CFO's conflict of interest allegations]

While serving as the district's CFO, investigators said Smith approved thousands of dollars in payments to a company run by her sister, Professional Group Public Consulting, Inc. Smith approved the purchase orders and change orders between February and October of 2017.

[RELATED: Scottsdale Unified attorney: Former CFO violated state law]

According to the AG's office, Smith failed to disclose that both she and her sister, Caroline Brackley, had substantial financial interests in the company.

An investigator hired by SUSD determined Smith was actively involved in hiring the company, including deliberately contacting her sister to find out PGPC’s prices.

Smith had previously signed a conflict of interest disclosure form with the district but failed to disclose how much of an interest she had in PGPC, and the substantial interest of her sister.

[RELATED: Scottsdale district's CFO resigns amid conflict of interest allegations]

Smith resigned from the district earlier this year. In her resignation letter, Smith said it was a "genuine and innocent mistake" that she didn't disclose she and her sister had a financial interest in PGPC.

SUSD governing board president Barbara Perleberg released the following statement:

“The Scottsdale Unified School District is aware of felony indictments tonight against former SUSD CFO Laura Smith. These indictments are the result of a long and careful investigation by the Arizona Attorney General’s office, and we appreciate their diligent work.

In late 2017, SUSD asked outside counsel to conduct an investigation into Ms. Smith and alleged conflicts of interest. SUSD shared the findings of that investigation with the AG’s office and will continue to cooperate, fully, with the Attorney General.

As part of the Attorney General’s investigative work, the Auditor General has prepared a report that, in part, provides recommendations to help avoid future conflict-of-interest violations by any SUSD employee. We appreciate that guidance as we work to repair broken systems and ensure employee compliance with all rules and regulations.

This has been an extremely difficult chapter in SUSD’s history.  While we are anxious to close that chapter and move forward, we also want to be sure we understand exactly how those mistakes happened, so we can learn from the past and do better in the future.”

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