LIMESTONE COUNTY, Ala. — Former Athens City Schools Superintendent Trey Holladay, his wife and former Limestone County Schools Superintendent Tom Sisk are among those named in a federal indictment accusing them of fraudulently enrolling private school students in virtual school programs in order to profit for themselves.

“These defendants organized and participated in a scheme to defraud the Alabama State Department of Education and Alabama tax payers by diverting funds from public school districts across the black belt, funneling those funds into school districts in North Alabama, and then skimming a portion of that money into their own pockets,” said Louis Franklin, US Attorney for the Middle District of Alabama during a press conference Tuesday. “The scheme developed and was implemented by the defendants involved fraudulently enrolling private school students in virtual programs, reporting those students to the state department of education as full time students to the Athens City and Limestone County School districts, and then collecting payments from the education trust fund as if those students attended their school.”

In addition to Holladay, his wife Deborah, and Sisk, the indictment also names Rick Carter, who was a technology teacher and later director of innovative programs for Athens City Schools. It also lists retired educator Gregory Corkren and David Tutt, who worked at Marengo Academy in Linden. Corkren and Tutt are both longtime friends of Trey Holladay, according to the indictment.

All six are charged with one count conspiring to commit mail and wire fraud. In addition to that, Trey Holladay faces 88 counts of wire fraud and 34 counts of aggravated identity theft. Carter is charged with 86 wire fraud counts and 34 of aggravated identity theft. Deborah Holladay is charged with six counts of wire fraud, and Corkren faces one count of aggravated identity theft.

In all, federal prosecutors said the scheme diverted $5.8 million to Athens City Schools and attempted to send another $1.1 million to Limestone County Schools.

“These so-called educators have been charged for preying on these schools that placed them in positions of trust to educate students, and students they promised to serve,” said Kori Smith, Acting Special Agent in Charge for the U.S. Department of Education’s Office of the Inspector General.

The alleged scheme centers around Athens Renaissance School and its offering of virtual education courses.

The indictment alleges that student information from private schools around the state was entered as virtual full-time students in Athens Renaissance School in order to obtain more funding than the district was entitled to. The defendants in the indictment then took some of that increased revenue for their own personal use, the indictment claims.

The private schools were given incentives like laptops, monetary payments and access to online curriculum in exchange for student information, prosecutors said. While some students may have been taking the courses as extracurriculars or for enrichment, none of them were taking a full courseload, they said.

Corkren and Sisk are also accused of a similar agreement in recruiting students for Limestone County Virtual School.

“”Many of these students had never heard of Athens City Schools or had ever been to Limestone County,” said U.S. Attorney Louis Franklin.

You can read the full indictment here.

Holladay parted ways with Athens City Schools in October 2020, when the board agreed to a $250,000 separation agreement. He had been on paid administrative leave after federal agents searched his home.

The attorney for Trey and Deborah Holladay issued a statement.

We are a family of teachers and coaches. There is absolutely no way that we would do anything detrimental to the school system. The charges against us are unfounded and will be vigorously defended. We appreciate so much the overwhelming support from our friends and community.

Melton Espy & Williams, PC

Sisk left Limestone County in 2019 for a job in Bristol, Tenn. He resigned as director of schools there in February 2020, after questions were raised about his doctorate degree.

The indictment claims some of the revenue gained from the scheme helped pay for the new Athens High School. When asked what the indictment could mean for the district, Assistant U.S. Attorney Jonathan Ross said the school district’s property was not at issue; instead, the people named in the indictment could be subject to orders seeking restitution for the money taken.

The Limestone County School District issued a response to the indictment Tuesday night.

On Tuesday, February 23, 2021, Limestone County Schools learned it was mentioned in an indictment for involvement with a virtual school program during the 2016-2017 school year. 

While the school system was mentioned in the indictment brought in the United States District Court for the Middle District of Alabama, the indictment does not name the Limestone County Board of Education or anyone currently involved with Limestone County Schools as defendants. In fact, as mentioned during the Justice Department’s press conference, the indictment does not include any current Limestone County School employees. 

Moving forward, we will be a transparent and accountable school system which provides the best educational experience we can for our students. 

Dr. Randy Shearouse, Superintendent, Limestone County Schools

An attorney for a former Limestone County Schools administrator Dr. Mark Isley said Isley is one of many witnesses in this federal case. Isley resigned in May 2020 after he filed a lawsuit against the Limestone County Board of Education following a decision to put him on administrative leave earlier that year.

Isley claimed the board was trying to fire him because he told state officials about concerns regarding the district’s practices.

The Limestone County School Board denied those claims.

Isley’s attorney Shane Sears issued a response to Tuesday’s indictment.

Today is a sad day for Alabama students.  Based on the recent indictments handed down by the U.S. Attorney’s office, it is being alleged that money intended for Alabama’s children, was misused by public officials.

However, today, Dr. Mark Isley, has been fully vindicated as a result of these indictments. After cooperating with the investigation, he was forced to resign from the Limestone County school system under a dark cloud.  This dark cloud has now cleared and we are hopeful that Dr. Isley will get to return to serving the students of Alabama with the same integrity as when he departed.

Shane Sears