Under Dallemand, school system paid $3.2 million for fake software, website, lawsuit claims

A website and nonexistent computer software sold to the Bibb County school system for more than $3.2 million in 2012 weren’t owned by the seller, according to claims in an amended lawsuit that the school district filed against former Superintendent Romain Dallemand and others.

The school system filed an initial multimillion suit in federal court in December, alleging that Dallemand and others had participated in a series of fraudulent acts, racketeering, wire fraud and mail fraud, while also violating school district policies.

Along with Dallemand, defendants named in the suit include: the system’s former executive director of technology, Tom Tourand; Progressive Consulting Technologies Inc. and its CEO, Isaac Culver III; CompTech Computer Technologies Inc. and its president and CEO, Allen J. Stephen III; and Pinnacle/CSG Inc. and its president, Cory McFarlane.

In the amended complaint, the school system contends that Pinnacle didn’t own the domain name or website www.ProsceniumSoft.com, which purportedly provided “a suite of software applications to support the administrative needs of schools and school district offices.”

The lawsuit also includes these allegations:

The software — which was advertised as being copyrighted — never existed.

Using the website as a fraudulent advertisement to induce schools and school districts to buy the software, Progressive, Culver, Pinnacle and McFarlane misrepresented the “existence, purpose and utility” of the software to schools and school districts.

The site was deleted in August 2014. The Bibb school system contends the deletion happened after an investigation was launched by the Georgia attorney general, as well as an audit of purchases, calls for an investigation by a then Bibb County commissioner, and the publishing of articles by The Telegraph questioning the purchase and reporting about the investigations.

Progressive Networks Inc., a corporation dissolved in 2009, owned the website. Culver, CEO of Progressive Consulting Technologies, co-owned Progressive Networks Inc. and was the company’s CFO.

At times, Pinnacle’s contact information was fraudulently listed instead of Progressive’s, even though the site was hosted by Progressive Consulting on the company’s servers and shared a Macon IP address with several other websites associated with Progressive Consulting. (An IP address is a numeric designation that identifies its location on the internet.)

Other claims

Many of the initial lawsuit’s contentions were included in a 2014 state investigation that said the purchase of millions of dollars in technology equipment and services without competitive bids or school board approval signaled possible collusion among Bibb County school officials and several vendors they did business with.

This week’s amended complaint alleges that Dallemand, who was hired as Bibb County’s superintendent in February 2011, reorganized the school district’s purchasing department to maneuver around school board policies. About a year earlier, voters had passed an extension of an education sales tax to fund school district capital improvement projects, including upgrades to technology.

After the March 31, 2011, retirement of the district’s purchasing director, Dallemand eliminated the position and changed the district’s work flow to require purchases to be reviewed and approved by employees unfamiliar with required bid procedures, according to the complaint.

A chart reflecting the changes was posted on the Bibb school system’s website, largely distributing the information to potential vendors so bid procedures and school board approval “could be more easily be avoided” without additional oversight, according to the complaint.

The lawsuit further alleges:

In 2012, Dallemand hired Tourand, the city of Macon’s former manager of information technology, as the district’s new executive director of technology despite Tourand’s being interviewed by a panel of administrators and not being recommended for the position. He also hired Cheryl Canty-Aaron as capital program administrator on the same day, and in a similar manner that ensured the new employees would feel obligated to support him.

Culver, the 2017 chairman of the Greater Macon Chamber of Commerce, gave an employment reference for Tourand. Canty-Aaron served on a panel that chose Progressive to upgrade the school district’s technology.

In violation of school board policy, no bids for accounting and financial software were solicited and no requests for proposals were advertised before Dallemand, Tourand and Culver chose to purchase $3.2 million in software from Pinnacle.

The school district contends that an invoice submitted in 2012 by Pinnacle, a Florida-based construction company with which Culver and Progressive had close ties, was fraudulent. The number of items ordered was based on the number of students enrolled instead of the number of employees who would be using the software, causing Bibb County schools to overpay for unneeded items.

Pinnacle shipped an inexpensive, blank computer server to Bibb schools, representing that it contained the software the school system had purchased.

Tourand was spotted cutting the shipping label off the box in spring 2013 and shredding the label, according to the amended complaint.

He left the box taped shut with a note on it saying, “do not touch,” according to the complaint.

Dallemand removed Ron Collier from his position as the school district’s chief financial officer in December 2012 after Collier expressed concerns about the superintendent’s spending.

On Dec. 18, 2012, Dallemand, Tourand, Progressive and Culver demanded that Collier’s replacement wire $3.2 million to Pinnacle. The money was wired the next day despite the employee voicing concerns that school board policy required checks to be issued for payment.

Also on Dec. 18, the employee was pressured to wire $3.7 million to CompTech, again without school board approval, to pay for 15,000 NComputing virtual desktop computers that enable multiple users to share a single operating system.

CompTech then wired all but $50,000 of the money to Progressive, which then paid “substantially less” than the amount it received to another company to buy the devices.

Although CompTech was paid more than $350,000 for the installation of the devices, the company wasn’t involved in the installation of 300 units at Northeast High. The installed devices don’t operate properly and the rest still are stored in a school district warehouse.

Timothy Pepper, a lawyer representing CompTech and Stephen, responded to a request for comment Wednesday, saying his clients are aware of the allegations and have denied all liability for the claims.

He declined further comment, citing CompTech’s company policy not to comment on pending litigation.

Messages left for attorneys representing the other defendants weren’t returned Wednesday.

Dallemand asked the school board to buy out his contract Jan. 17, 2013. After some negotiation, the board agreed to pay him $350,000.

The school district is seeking payment of no less than $7,365,200 from defendants in the case. In some counts, the district is seeking three times the actual damages incurred, plus punitive damages, interest and attorney fees.

A federal judge is set to hear arguments later this year relating to a motion filed by Culver and Progressive, who seek to have the case dismissed or settled in arbitration.

This story was originally published April 5, 2017 at 12:20 PM with the headline "Under Dallemand, school system paid $3.2 million for fake software, website, lawsuit claims."