Saturday, June 12, 2004

School equipment seller fired, accused

Local districts among those holding bag

By Paul Foy
The Associated Press

SALT LAKE CITY - A charity official accused of cheating public schools in Ohio and other states on fitness gear has been fired.

The National School Fitness Foundation, based in American Fork, Utah, said Thursday it also had revamped its board of directors and filed a complaint alleging Cameron Lewis and his father misappropriated about $5 million from the foundation.

At least a dozen Southwest Ohio school districts signed up for the equipment, including Mount Healthy, Cincinnati, Indian Hill and North College Hill.

The 31-page complaint, filed Wednesday in the U.S. Bankruptcy Court of Utah, says Lewis used the charity to buy himself a small airplane and finish a $500,000 house.

Lewis, who was the foundation's president, also was accused of billing the charity $5,000 for scuba-diving training, $8,000 for an elk hunt and tens of thousands of dollars for political donations.

Lewis was fired May 31, foundation attorney Grant Sumsion said. The complaint says Lewis promised to pay back the charity but hasn't.

Lewis, who hasn't been served with a copy of the complaint, couldn't be reached for comment.

Lewis had arranged to sell $77.5 million in stationary bicycles, weight machines, treadmills and other equipment to more than 600 schools in 20 states. He promised to reimburse them with money from government grants or private donations, but stopped payments in April, blaming an investigation in Minnesota.

Ohio school districts bought or leased sets of equipment costing $100,000 to $220,000 for 119 schools.

Minnesota Attorney General Mike Hatch has accused Lewis of operating a pyramid scheme by using money from newly enlisted schools - not grants or donations - to make token reimbursements to schools that signed up early to buy or lease equipment. Many of the schools were left unable to pay off bank loans or satisfy leasing terms.

The foundation filed for bankruptcy reorganization June 1, saying it could no longer afford to reimburse any schools, which court papers show are owed as much as $340,000 each.

The board's original four members, which included Lewis' father, have resigned. Another member, Martin Arnoldini, left after revealing a prior felony conviction for his role in a tax-avoidance scheme.

The new board, which consists of just two members, directed the foundation to sue Lewis and his father, Tyron, after discovering they had engineered a series of questionable financial dealings.

"Cameron Lewis focused his efforts on a pattern of self-dealing and deception that not only lined his pockets, but crippled NSFF in its efforts to raise funds from private donations and government grants," the complaint says.

Among other things, the complaint accuses both Lewises of transferring $2 million in charity assets to trust accounts they controlled. And it says Cameron Lewis deleted computer files.

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