Hopi school indictment adds two principals, treasurer
A new federal indictment concerning almost $1 million in fraudulent activity at Hopi Mission School in Kykotsmovi, Ariz., includes two principals and the school board’s treasurer.
The private kindergarten-to-eighth-grade school in Kykotsmovi, Ariz., is a Native American ministry with decades of Mennonite history and influence. HMS is a member of Mennonite Education Agency’s Mennonite Schools Council.
HMS superintendent Thane Epefanio and his wife, Michelle Epefanio, an HMS teacher, were already indicted by a grand jury on charges of Social Security fraud in September for allegedly not reporting her income as a full-time teacher while she was collecting unemployment benefits. They pleaded not guilty on Oct. 19.
A new indictment filed Jan. 31 alleges theft of HMS funds — both charitable donations and federal program funding — by means of mail fraud, wire fraud and money laundering. Elementary principal Rebecca Yoder and middle school principal Anne Lowry are named for their role in alleged conspiracy, fraud and federal program theft, and treasurer Matthew Schneider is named for fraud and conspiracy.
The felony charges contend Thane Epefanio, Yoder, Lowry and Schneider used the school newsletter and church visits over a five-year period — concluding in September when the Epefanios were arrested — to solicit donations for HMS. Grant applications specified projects like building repairs and purchase of a bus, “when in fact, funds solicited in this manner were never utilized as represented,” states the indictment.
U.S. prosecutors are seeking forfeiture of at least $980,215.47 — the amount of money involved in the offenses.
In addition to Arizona state funds, charges allege this included a $40,000 donation from Bellevue Heights [Baptist] Church Foundation in Sun City. No Mennonite congregations are listed in the charges, but private donors in Woodbine, Md., and Kalona, Iowa, are mentioned.
Dozens of bank accounts
The charges state the parties involved knew they were participating in unlawful activity, using financial practices designed to conceal the nature, location, ownership and control of funds.
Between 2011 and 2014, school board members authorized opening about 35 bank accounts associated with HMS at Wells Fargo Bank. Also during that time, board members authorized HMS checking accounts at three other banks.
Thane Epefanio, Lowry, Yoder and board members wrote HMS checks to themselves and other HMS staff “to create the appearance that the funds were being utilized for the operation of HMS,” states the indictment.
Transfers between accounts were made by checks to avoid electronic transfers, the indictment states, and multiple checks in smaller amounts were issued on or near the same date to avoid cashing large checks.
To spend funds without creating a paper trail, the indictment alleges Epefanio, Yoder, Lowry and Schneider used cash instead of writing checks.
The indictment does not say where the nearly $1 million in question ended up. But during the Epefanios’ original indictment hearing Sept. 30, an investigator from the office of the inspector general testified in court that Thane Epefanio passed $1.6 million through the Bellagio Casino in Las Vegas over the previous two years.
Additionally, a federal program theft charge alleges Thane Epefanio embezzled more than $5,000 in payments from the National School Lunch Program, with the assistance of Yoder and Lowry.
The HMS board has not allowed Mennonite Church USA representatives to review financial documents for several years. In its most recent attempt to do so, MC USA filed a lawsuit in Navajo County (Ariz.) Superior Court in 2015 asking that the school board be evicted from the property. A decision is pending.
A petition seeking a Hopi tribal order barring the Epefanios from the reservation was made in November, based on the original indictments. However, deputy general counsel Karen Pennington, an attorney for the Hopi tribal council, said the order was never issued and a hearing was not set.
On Feb. 6, Pennington did not know of any other exclusion order petitions.
“I understand that they are still there” on HMS property, she said, adding that she thought one grade was having classes.
A woman who answered the HMS phone on Feb. 6 said Yoder was not available and didn’t know when she would be available. When asked to speak with the person administrating the school, the woman hung up.
An arraignment was set for Feb. 15 in Phoenix.
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