Now retired longtime employee focus of FBI case

The Burlington School District has become the victim of a suspected fraud of at least $1.8 million, officials confirmed to Vermont News First on Tuesday.

VNF also has learned that Burlington’s former Director of Curriculum, Stephanie Phillips, who served as the interim school superintendent for part of 2014, is the target of the criminal investigation.  She took retirement from the city in May, but continued to working in a consulting capacity until mid-June.

The FBI conducted a raid last week on the Colchester home that Phillips shares with her husband, Patrick, Vermont News has been told.

No known criminal charges have been filed against anyone.

This news story will be updated.

Records show Burlington school officials have been aware of the mail and wire fraud for several months, but never made anything public until Vermont News First began asking questions in recent days.

The fraud goes back to about March 2013, the FBI said.  It appears she set up a post office box at a maildrop business on Dorset Street 

in South Burlington.

“We are aware of the investigation and are cooperating,” School District spokesman Russ Elek said in response to an inquiry by VNF on Tuesday.

Attempts to reach School Superintendent Thomas Flanagan were unsuccessful.  Elek said he would not make Flanagan available for a news interview. 

“He is not going to be doing interviews,” Elek said.  The request to speak to Flanagan, who is in his seventh year heading daily school operations, was still made.  He had not responded.

Board Chair Clare Wool has not returned multiple phone and text messages over the past two days.

Longtime Vice Chairman Jeff Wick declined comment on Monday.  Wick referred questions to Wool and Superintendent Flanagan.

The FBI says they never tell crime victims not to speak to the news media, but victims often report that they have been encouraged never to speak to reporters.

It is unclear how nearly $1.8 million could be stolen from the Burlington School District and the superintendent, the financial office or the hired auditors failed to uncover it immediately.

First Assistant U.S. Attorney Jon Ophardt confirmed that there have been court-authorized search warrants executed, including one in Colchester as recent as last week.

Ophardt said no arrests have been made.

He said Burlington Police fielded the initial complaint over the summer and later the FBI joined the investigation.

The FBI, in court papers obtained by Vermont News First, said they believe Phillips defrauded the district by creating a false company — Leading and Learning Consultants of Vt. — and using the firm two ways to defraud the taxpayers.  One scheme was to submit invoice to the Burlington School District for work that she was required to do as part of her job for the city. The net impact was Phillips was getting paid twice for doing a job once, the FBI said.

The second scheme involved submitting invoice from Leading and Learning for work that was never delivered to the Burlington School District, the FBI said. 

Attempts to reach Phillips or to determine if she had retained a lawyer were unsuccessful.

She worked her way up the ladder after starting her career in Burlington as a high school classroom teacher and later an assistant principal.  She was named the district’s curriculum director in 2006.

She was a graduate of the Vermont Superintendent Leadership Academy, and has been recognized for her classroom and program innovation achievements. She is a recipient of an Eisenhower Grant for training math science and technology teachers, is a two-time recipient of the University of Vermont Outstanding Teacher of the Year award, and received the U.S. Department of Education’s School to Work Award.

Stephanie Phillips and her husband, Patrick, bought their home on Stone Drive off Bay Road in Malletts Bay in Colchester in 2011.  It is assessed at $699,400, according to town records.  Her husband is listed as a science teacher at the Colchester School District.  He also operates a driver education school, records show.

Stephanie Phillips was initially named acting Burlington School Superintendent after Jeanne Collins stepped down in June 2014.  The Burlington School Board later named Phillips as interim superintendent.  But she abruptly resigned with two other top administrators in November 2014 after they claimed the school board was not willing to work with them.

Phillips has her bachelor degree in education from the now defunct Trinity College of Vermont and her master’s in education from St. Michael’s College in Colchester.

It appears the fraud case is unrelated to the $165 million bond issue approved by voters in November 2022 to demolish the chemical-ridden Burlington High and rebuild a new facility at the site off North Avenue.  The school closed in 2020 and moved into the former Macy’s store in downtown Burlington.  The new high school opened this fall with much fanfare.