Former St. Joseph School Superintendent Sentenced for $662,000 Fraud Scheme

KANSAS CITY, Mo. – The former superintendent of the St. Joseph School District was sentenced in federal court today for a fraud scheme in which he received more than $662,000 in pension payments to which he was not entitled.

Danny L. Colgan, 70, of St. Joseph, Mo., was sentenced by U.S. District Judge Dean Whipple to one year and one day in federal prison without parole. Colgan also made a final payment of $608,257 today to complete his court-ordered restitution.

Colgan was the superintendent of the St. Joseph School District from July 1, 1992, until his retirement on Dec. 31, 2005. He pleaded guilty to one count of wire fraud on June 13, 2016.

The fraud scheme began during the 1997-98 school year and lasted for eight years, until Colgan’s retirement. Colgan caused others to falsely report his salary to the Public School and Education Employee Retirement Systems of Missouri (PSRS) in order to increase his retirement benefits.

Colgan’s retirement benefits were calculated by using the amounts reported by the school district over the final three-year period before he retired. During that final three-year period, the school district falsely reported that Colgan’s salary totaled $586,030. In reality, his salary totaled $343,286 – a difference of $242,744.

Colgan’s salary reported for his final three years as school superintendent improperly included a car allowance/travel stipend, family insurance premiums, a district contribution to a taxable annuity, “district vehicle” payments, and an unused vacation payment. These fringe benefits were ineligible for retirement salary calculation purposes.

This case was prosecuted by Assistant U.S. Attorney Paul S. Becker. It was investigated by the FBI.

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