Saturday, October 9, 2004

State sues over fitness funds

The Associated Press

COLUMBUS - A lawsuit filed by the state's attorney general seeks $4 million for 99 Ohio schools that paid for fitness equipment they expected a charity to supply at no cost.

The National School Fitness Foundation, a Utah-based nonprofit organization, arranged to sell $77.5 million in stationary bicycles, weight machines, treadmills and other equipment to more than 600 schools in Ohio and 19 other states.

In Greater Cincinnati, 13 school districts purchased and received the exercise equipment.

Ohio schools bought or leased sets of equipment with the understanding that the foundation would raise charitable donations to reimburse them.

But Attorney General Jim Petro alleges in the lawsuit that money from newly enlisted schools was used to make token reimbursements to schools that participated earlier.

The lawsuit was filed against School Fitness Systems of American Fork, Utah; All-Starr Sports in Findlay, which helped sell the equipment, and other affiliated organizations. The nonprofit foundation was not named a defendant because it has filed for bankruptcy.

Schools purchased the equipment through the program's authorized dealer, School Fitness Systems. The equipment was worth less than $70,000 but was sold to Ohio schools for between $150,000 and $300,000, according to the lawsuit filed in Franklin County Common Pleas Court. The charges include fraud and negligence.

Messages seeking comment were left Friday for All-Starr Sports agent, Stephen Heintzelman.

In July, the head of School Fitness Systems pleaded guilty to defrauding 19 Minnesota school districts and six banks of more than $1 million.

Lebanon Schools Superintendent Bill Sears said he was pleased to hear the state's top legal official had filed the lawsuit. Lebanon schools in Warren County leased $419,000 worth of equipment and had received reimbursement payments of $230,000 until the foundation halted payments.

"We think it's great that Petro is going after the foundation," Sears said.

"We don't feel good about being deceived by this foundation ... but in the long run, we do have some very good equipment that we were told is worth $419,000 for an investment of $189,000. The equipment is great and it's a vital part of our student fitness program."

Enquirer staff writer Michael D. Clark contributed..

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