Ohio indictment alleges education funds were diverted through private companies as Rhode Island Democratic Party chair resigns and a successor is named.
STEUBENVILLE, Ohio – October 21, 2026 (STL.News) Fraud – A sweeping criminal investigation into the alleged diversion of approximately $20 million in education funding from a now-defunct Ohio community college has triggered political consequences hundreds of miles away in Rhode Island, where the chairwoman of the state Democratic Party resigned following the indictment of her husband.
Michael Perik, a Rhode Island businessman involved in education consulting, is among three defendants indicted in Jefferson County, Ohio, on felony charges stemming from Eastern Gateway Community College’s operations.
Ohio Auditor of State Keith Faber announced the indictments October 8, alleging that Perik and two associates participated in a coordinated scheme to divert federal Pell Grants, other student financial assistance and state education subsidies through privately controlled businesses.
The allegations concern a college that once served thousands of students seeking affordable higher education, including displaced industrial workers, union families and students unable to relocate to traditional university campuses.
Prosecutors contend that private companies exercised improper control over enrollment, financial aid administration and other essential college functions while receiving payments that violated federal and state requirements.
Perik faces 12 felony counts, including charges involving corrupt activities, aggravated theft, bribery, and money laundering.
He has pleaded not guilty, and his attorney disputes the allegations.
The criminal case has also resulted in a leadership change within the Rhode Island Democratic Party.
Liz Beretta-Perik, Michael Perik’s wife, resigned as party chairwoman on October 20 following public calls for her departure. No one has charged her with a crime, and she is not named as a defendant in the Ohio indictment.
On October 21, Rhode Island House Speaker Christopher Blazejewski announced that state Rep. Jenni Furtado would succeed her, subject to ratification by the Democratic State Committee.
The developments have brought national attention to a case involving education funding, government oversight, political relationships and the financial collapse of a public institution.
Fraud – Three Defendants Face Criminal Charges
The Ohio indictment names three individuals:
- Michael Perik: A businessman whose companies provided services connected to Eastern Gateway Community College.
- Nicole Rowe Colclasure: A business associate who served as president and part owner of the Student Resource Center and held other positions within companies associated with Perik.
- Michael Geoghegan: A former president and chief financial officer of Eastern Gateway Community College.
According to the Ohio Auditor of State, Perik and Colclasure each face 12 felony counts, while Geoghegan faces nine.
The charges include a pattern of corrupt activities, aggravated theft of $1.5 million or more, theft in office, telecommunications fraud, bribery, and an unlawful interest in a public contract.
Perik and Colclasure also face charges involving receiving stolen property and money laundering.
A Jefferson County grand jury returned the indictment, and the county’s Common Pleas Court filed it.
Jefferson County Prosecutor Jane Hanlin appointed attorneys from the Ohio Auditor of State’s Special Investigations Unit to serve as special prosecutors.
Although the allegations involve federal education assistance, the indictment is an Ohio state criminal proceeding rather than a federal criminal prosecution.
The charges are accusations, not findings of guilt. All three defendants are presumed innocent unless proven guilty in court.
Fraud – How Prosecutors Say the $20 Million Scheme Worked
The central allegation is that companies associated with Perik used contractual relationships with Eastern Gateway Community College to obtain improper influence over operations that should have remained under the institution’s independent control.
State investigators say Perik owned four for-profit entities involved in the alleged scheme, including the Student Resource Center.
Those businesses provided services connected to enrollment, educational programming, and student administration.
Prosecutors allege the companies did not function as independent contractors as required by applicable regulations.
Instead, investigators say, they exercised substantial control over attendance verification, enrollment decisions, fees, access to financial aid and other administrative functions.
These responsibilities matter because colleges participating in federal student aid programs must establish student eligibility, document attendance, and comply with rules governing the disbursement of taxpayer-supported assistance.
The indictment alleges that financial aid was disbursed to students who were ineligible or whose attendance and enrollment status were not properly verified.
Investigators also allege that aid continued to be improperly administered when students had withdrawn or otherwise failed to meet program requirements.
According to the Ohio Auditor of State, the state consequently paid millions of dollars to entities owned or controlled by Perik and Colclasure.
Geoghegan, the former college executive, allegedly knew about the arrangements and approved disbursements.
The indictment further alleges that the enterprise used fraudulent reimbursements and prohibited incentive compensation arrangements to divert education funds.
Federal restrictions on incentive compensation are designed to prevent improper financial rewards tied to student recruitment and financial aid activities.
These rules aim to reduce the risk that institutions or outside contractors will prioritize enrollment volume and revenue over eligibility, educational quality, and student outcomes.
The criminal proceedings will determine whether the defendants knowingly violated those requirements and committed the charged offenses.
Fraud – College Enrollment Grew From 8,500 to 60,000
The allegations emerged from a period of extraordinary growth at Eastern Gateway Community College.
Founded in 1968 as Jefferson County Technical Institute, the institution served a region historically connected to steel production, manufacturing and other industrial employment.
Community colleges such as Eastern Gateway provide an important educational pathway for students seeking lower-cost associate degrees, professional certificates and job retraining.
The college eventually offered more than 70 associate degree programs, majors and certificate opportunities.
According to Ohio investigators, enrollment rose from about 8,500 students in 2017 to more than 60,000 during the period covered by the alleged scheme, which ran through March 2022.
More than 90% of students were enrolled exclusively in online coursework, while approximately 80% reportedly lived outside Ohio.
A major contributor to that growth was the Free College Benefit Program.
The initiative allowed qualifying union members, their families, and certain other participants to enroll in educational programs without direct tuition charges.
The program expanded the college’s reach well beyond its traditional geographic service area.
However, investigators allege that the financial arrangements supporting this expansion were improperly administered.
The indictment describes a system in which students were presented with what appeared to be union-supported educational benefits while federal financial aid was allegedly used in ways inconsistent with governing requirements.
That distinction is important.
A student receiving tuition assistance through a legitimate scholarship or financial aid arrangement is not inherently participating in misconduct.
The criminal allegations concern how the defendants administered the programs, how funds flowed, and whether the college and its contractors complied with applicable laws.
The indictment announcement provides no basis to suggest that ordinary students enrolled through the program were criminal participants.
Fraud – Federal Review Found Extensive Financial Problems
The criminal indictment is only one part of a much larger examination of Eastern Gateway’s finances.
According to the Ohio Auditor of State, a final review by the U.S. Department of Education identified substantial liabilities tied to the college’s administration of federal student assistance.
Federal officials identified more than $44.4 million in liabilities that the college should have repaid.
The final review also projected liabilities exceeding $259 million because of the institution’s closure and its failure to provide required enrollment documentation and other records.
Those figures must be carefully distinguished from the approximately $20 million alleged in the criminal case.
The $20 million represents the approximate amount investigators allege was diverted through criminal conduct.
The $44.4 million figure concerns liabilities identified through federal program oversight.
The amount exceeding $259 million represents a broader projected liability figure associated with documentation failures and the institution’s closure.
These figures are not interchangeable and should not be combined to suggest a larger criminal theft allegation.
Separately, a November 2025 audit by the Ohio Auditor of State identified more than $17 million in questioned costs and extensive financial management problems.
Questioned costs are expenditures that auditors identify as potentially improper, insufficiently documented, or otherwise requiring examination.
They do not automatically establish that the entire amount was stolen or that any particular individual committed a crime.
Together, the reviews describe serious weaknesses in financial oversight and student aid administration at an institution that depended heavily on public funding.
Fraud – Investigation Included January 2024 Search
The Ohio Auditor of State’s Special Investigations Unit began examining Eastern Gateway after receiving information about questionable purchasing practices involving college officials.
The investigation expanded into the college’s financial relationships and administrative operations.
In January 2024, investigators executed a search warrant at the institution.
Participating agencies included the Ohio Auditor of State’s Special Investigations Unit, the Jefferson County Sheriff’s Office, the Ohio State Highway Patrol’s Computer Crimes Unit, the U.S. Secret Service, the Columbus Division of Police’s Digital Forensics Unit, and the Ohio Narcotics Intelligence Center.
The involvement of multiple agencies reflected the complexity of examining financial records, electronic communications, institutional operations, and transactions involving several business entities.
The investigation ultimately led to the October 2026 grand jury indictment.
The charges cover alleged activities occurring between January 2017 and March 2022.
The indictment was announced more than four years after the alleged criminal period ended, illustrating the time required to examine complex financial transactions and institutional records.
Fraud – Eastern Gateway’s Closure Affected Students
Eastern Gateway’s financial and regulatory problems ultimately led to the loss of a higher education institution that served eastern Ohio and students nationwide.
The college ceased academic operations in 2024 and was formally closed in 2025, according to the state auditor’s account.
Its closure followed years of scrutiny involving federal financial aid practices, administrative controls, and the sustainability of its educational model.
For the surrounding communities, the loss was more than an accounting problem.
Eastern Gateway served students who might otherwise have faced significant obstacles to obtaining postsecondary education.
Its programs provided opportunities for workers seeking new skills, high school graduates pursuing affordable credentials, and adults attempting to advance their careers.
The expansion of online education had also allowed the institution to reach students far beyond Ohio.
The collapse therefore raised questions about the consequences of financial management failures for people who had relied on the college’s programs.
Students at a closing institution can face difficulties with academic records, transferring credits, completing degrees, and determining eligibility for additional financial assistance.
Individual Eastern Gateway students’ experiences and financial outcomes vary, and the criminal indictment does not establish that every student faced those consequences.
Nevertheless, Ohio officials have directly connected the alleged misconduct and broader compliance failures to the institution’s financial difficulties and eventual closure.
Auditor Faber emphasized the intended beneficiaries of the public money when announcing the charges.
“These public resources were supposed to help disadvantaged students in an area of the state where educational opportunities were scarce,” Faber said.
“Instead, it appears these individuals took advantage of their positions, and students were left out in the cold.”
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