College President Approved the Payouts While Pell Grants Vanished

Michael Geoghegan ran Eastern Gateway Community College as its president and CFO. A Jefferson County grand jury has indicted him on nine felony counts, including bribery, theft in office and engaging in a pattern of corrupt activity, over a scheme state auditors say drained roughly $20 million in Pell Grant and state subsidy money. [S2]

PROOF

Jefferson County grand jurors met in secret and returned the indictments late on a Wednesday; prosecutors declined comment afterward, and findings were announced at a news conference the next day. [S1] State Auditor Keith Faber and U.S. Under Secretary of Education Nicholas Kent announced the indictments of Michael Perik, Nicole Rowe Colclasure and Geoghegan. [S2] Geoghegan faces nine felony counts, including engaging in a pattern of corrupt activities, aggravated theft of $1.5 million or more, theft in office, telecommunications fraud, bribery and having an unlawful interest in a public contract. [S2]

The indictment centers on the Student Resource Center, a company Eastern Gateway contracted with to run its Free College Benefit program, which let union members nationwide take classes for free, mostly online. [S2] Federal law prohibits paying incentive compensation to any entity handling enrollment or financial aid unless that entity operates as a genuinely independent third party. [S2] The indictment alleges SRC did not operate that way, but instead "exercised significant and improper influence over EGCC. They controlled attendance verification, enrollment, fees, access to financial aid, and other critical functions at the college." [S2] As a result, prosecutors say, "millions of dollars in financial aid were improperly paid to entities owned and controlled by Perik and Colclasure," and "the indictment alleges Geoghegan knew about the scheme but still approved the disbursements." [S2]

A federal whistleblower complaint making similar allegations had already been filed under seal against Geoghegan and the college in August 2020 by a financial aid employee seeking "to recover damages and penalties arising from the fraudulent retention and/or use of federal Department of Education financial aid funds." [S2] That complaint was voluntarily dismissed in December 2024, with the college's consent, and unsealed in January 2025. [S2] Separately, federal bribery law makes it a crime to corruptly give or offer "anything of value to any public official ... with intent to influence any official act," punishable by up to fifteen years in prison. [S3] A hearing for each defendant is set in Jefferson County Common Pleas Court. [S2]

PUBLIC OPINION

Faber, who is running for state attorney general, framed it bluntly at the news conference: "What we are about to discuss may seem complex at times, but at its heart, it's a very simple story about greed." [S2] He said the college's financial mismanagement, laid out in a separate audit, "goes beyond sloppiness and honest mistakes," adding, "The public should be outraged." [S2] Kent said the indictment "also sends a warning that we are serious about prosecuting those whose greed and corruption undermine both the public trust and our students' futures." [S2]

BULLSHIT DEFENSE

Columbus attorneys David Axelrod and Karl Schneider, representing Geoghegan and Colclasure, issued a statement after the indictment: "There was in fact no lack of transparency," pointing to years of review by the Ohio Attorney General, federal agencies and an independent auditor, and noting that the Department of Justice had agreed to dismiss a related federal action because the public interest did "not warrant the continued expenditure of government resources to pursue or monitor the action." [S2]

None of that answers the specific allegation against their client. Years of outside review failing to stop a scheme is not proof the scheme didn't happen; it may just mean the reviewers missed it, or were misled by the records the indictment says were tampered with. [S2] And a federal civil case being dropped for resource reasons is not a finding that the underlying conduct was lawful. It is a decision not to spend more federal money chasing it in that forum. The state grand jury reached a different conclusion in a different forum, with nine felony counts attached to Geoghegan's name.

Eastern Gateway is gone. The building where it operated is being torn down. The students who were supposed to be helped by that Pell Grant money are the ones still waiting to find out whether they lose it.