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I-Team Follow Up: Former NJ School Administrator Admits Scamming $600,000 From Schools Across U.S.

By Charlotte Huffman

FRANKLINVILLE, NJ (CBS) -- A South Jersey man admitted Friday in federal court he ran an elaborate scam that stole $612,774 from schools across the country.

Robert S. Armstrong, 44, of Franklinville, plead guilty to mail fraud on Friday during a plea hearing at the United States Court House in Camden.

Armstrong is a former Assistant Principal of Sooy Elementary School in Hammonton.

Beginning in July 2014, Armstrong mailed more than 70,000 fraudulent invoices to 938 schools.

The invoices, which looked like this sought payment in the amount of $647.50 for textbooks from Armstrong's company, "Scholastic School Supply."

But the schools never placed the orders.

The textbooks never existed.

Neither did Armstrong's company, "Scholastic School Supply."

But hundreds of school administrators in at least 36 states wrote checks and mailed them to Armstrong's drop boxes in Las Vegas, NV and Sewell, NJ.

Armstrong opened more than six bank accounts for Scholastic School Supply where he deposited the checks from the victim schools.

Agents with the U.S. Postal Inspection Service originally estimated in all, the schools paid Armstrong about $325,000.

Further investigation revealed the total loss was nearly double.

Armstrong scammed a total of $612,774 from schools, including Blackfoot Charter School in Idaho.

Eyewitness News Investigative Reporter Charlotte Huffman reviewed purchase orders and in February, alerted Blackfoot Charter School that they had been duped.

At the time, administrator Fred Ball was unaware his school had been scammed.

"I was deeply disappointed that someone would do this to us … We are such a low funded school. We struggle for every penny we can get. This plan was so well devised and the timing was so perfect that they were able to sneak it through on us," Ball told Huffman in February.

In order for the invoice to appear legitimate, Armstrong used a fake telephone number and Federal Employer Identification Number (FEIN) for Scholastic School Supply.

The invoices also included International Standard Book Numbers (ISBNs), unique identifiers assigned to each book published in the United States.

All three numbers were phony - the telephone number was out of service, the FEIN did not exist, and the ISBNs were either non-existent or did not correspond to the textbooks listed on the invoices.

Armstrong's attorney Rocco C. Cipparone, Jr., of Haddon Heights, NJ says Armstrong has no prior criminal offenses.

"People make mistakes, they have lapses in judgement and that's what happened to him … and at the end of the day there are no dead bodies here. It was a white collar offense."

Cipparone would not elaborate on why his client committed the crime.

One week after Armstrong's arrest, federal agents charged him with a second count of mail fraud after they caught him running another scheme in which he allegedly mailed fraudulent invoices to colleges and trade schools from another company, "The Trend Publishing."

In that scam, investigators say Armstrong sought payment in the amount of $495.00 for an advertisement in the "College Edition." Prosecutors say victim colleges and trade schools never ordered the advertisement.

The I-Team tied Armstrong's Franklinville residential address to seven businesses offering everything from loans to insurance and witnessed a mail carrier pick up a bulk mailing of envelopes from his mailbox.

On Friday, Armstrong took a plea deal and agreed to serve 44 months in prison.

In exchange, the U.S. Attorney's Office will not press charges for Armstrong's other alleged schemes, which investigators say includes "The Trend Publishing."

Federal investigators have already recovered $325,000 in stolen funds from the Scholastic School Supply scam.

Armstrong agreed to pay the remaining balance of $287,774.

The U.S. Attorney's Office will ultimately be responsible for redistributing the money back to every school that was victimized.

When will the schools see their money?

A spokesman for the U.S. Attorney's Office says there is no timeline for that.

United States District Judge for the District of New Jersey, Noel L. Hillman instructed the U.S. Attorney's office to contact schools to ensure there are not more victims out there that have not been identified.

As long as the number of victim schools doesn't significantly increase, Judge Hillman indicated he plans to accept the plea agreement.

Armstrong is scheduled for sentencing on September 25, 2015.

The charge of mail fraud is punishable by a fine of $250,000 or twice the loss to the victims or gain to the defendant, whichever is greater and a maximum of 20 years in prison.

If you believe your school was victimized call the U.S. Attorney's Office, New Jersey District at (973) 645-2888.

If you have information about possible fraudulent conduct, call postal inspectors at 877-US MAIL 5 (877-876-2455).

Scholastic School Supply is not affiliated with Scholastic Inc., the well-known, global company that publishes classroom magazines and children's books.

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