School Discovers $1.5M Gift Was Scam—After Spending Funds

In November 2015, a mysterious donor identifying himself as Juan Diaz Romero, a self-proclaimed Wall Street financier, delivered a $1.5 million check to the High School for Enterprise, Business and Technology in Brooklyn, New York. The school, understandably ecstatic, sent the check to the Department of Education, as required, which gave the go-ahead for the school to start using the funds. But there was one minor issue.

The check was fake.

According to the New York Post, the school went on a "spending spree" after getting the OK, purchasing new equipment and funding trips for students. It wasn't until January, when the Department of Education tried to deposit the check, that anyone realized it was a scam. Sort of.

Via the New York Post:

Even after the check was returned, officials were confident their donor was the real thing. So they asked for a replacement check. When that one, too, bounced, officials finally became suspicious.

Those suspicions were confirmed at a stock market game event last month when the “millionaire donor” wrote yet another check, this time for $10 million, that he said was intended for the school’s use in 2017. That prompted school officials to contact authorities.

We've covered plenty of charity scams around these parts, but this one is particularly gross. Normally, a surprise big-money donation from an unknown donor is an automatic red flag. A bounced $1.5 million check may as well be a fire alarm.

But Romero took unusually thorough steps to sell the con. He dropped off the check in person. He allegedly told school administrators he was related to one of the students. And he returned to the school after making the initial fake donation, the New York Post reported, taking a classroom tour where he was introduced as "our benefactor Dr. Diaz" and convincing the school to start a stock market game.

It was enough to fool not just the high school, but the Department of Education. Twice. And according to the New York Post, the school now worries it may face budget cuts to make up for the advance funds it already spent. It's already been forced to cancel a student trip to Washington, D.C.

The saddest part? The whole situation likely could have been avoided had anyone bothered to vet Romero.

DNAinfo reported that the New York Police Department, now handling the case, said Romero has a healthy track record of priors, including several for (you guessed it) writing bad checks. The site noted that Romero twice attempted to buy cars with fake checks, stole $7,000 from two people he'd given investment advice, and posed as a lawyer in landlord/tenant court. In 2007, he spent a year in prison.

The New York Post dug up another, somehow even more outrageous detail:

A criminal background check—or diligent search on Google—would have found that Romero, 49, was nabbed for posing as a second-baseman for the New York Yankees in 1998 after he bought a $38,000 Ford Expedition, also with a bad check. Romero pleaded guilty to filing a forged instrument and was ordered to pay restitution, court records show.

According to the New York Post, Department of Education rules state the following: “It is important to note that prior to the acceptance of grant or gift, officials at receiving schools and sites must assure that comprehensive research of the donor has been completed. It is paramount that the integrity of the individual donor or organization is uncompromised."

The organization said it will "review its donation policies moving forward."