Photo: Hopi Mission School superintendent Thane Epefanio, right, principal Rebecca Yoder, parent volunteers and sixth graders on a class trip to Las Vegas in 2012. Hopi Mission School Newsletter

A new federal indictment regarding financial mismanagement at the Hopi Mission School, Kykotsmovi, Arizona, named two principals and the HMS board treasurer. These individuals join superintendent Thane Epefanio and his wife, Michelle, who were previously indicted by a grand jury for social security fraud. The couple was arrested on Sept. 27, 2016, and served with an expulsion order from the Hopi reservation on Nov. 17.

By Dec. 23, Hopi tribal lawyer Karen Pennington had confirmed that the Epfanios were no longer in residence on tribal lands.

HMS is a school serving children in kindergarten through eighth grade. HMS is located on land that was deeded to Mennonite Church USA specifically for the purposes of Anabaptist education and mission. The school was founded in 1951 to meet the interests of Hopi Christian families desiring alternative education for their children. The school was a longtime placement site for Mennonite Voluntary Service participants.

Since 2015, amid concerns about financial misconduct and the refusal of Epefanio and HMS to allow them to review financial statements, MC USA has been in the midst of a lawsuit with the HMS board, asking that the school board be evicted from the property. The lawsuit was filed with the Navajo County (Arizona) Superior Court, and a decision is still pending. The lawsuit followed a final notice, sent by MC USA to the HMS board in June 2015.

Filed on Jan. 31, the new indictment names the Epefanios, along with Anne Lowry, current principal of the HMS middle school, Matthew Schneider, HMS board treasurer, and Rebecca Yoder, current principal of the HMS elementary school and a former MVS participant. Lowry and Yoder are indicted for alleged conspiracy, fraud and federal program theft; Schneider is named for fraud and conspiracy.

The indictment alleges that from August 2011 through September 2016, by means of mail fraud, wire fraud and money laundering, close to $1 million gathered as charitable donations and federal grants was stolen. The indictment states that Thane Epefanio, Lowry and Yoder made in-person solicitations asking for contributions, as well as solicitations for contributions via the Hopi Mission School newsletter. In addition, Epefanio solicited grants from national foundations, including the Bellevue Heights Church Foundation, for projects including pipe and roof repair and the purchase of a bus. Funds were received but “were never utilized as represented in the grant applications.”

The indictment alleges that from 2011 through 2014, the HMS Board authorized the opening of multiple checking accounts for HMS, including approximately 35 accounts at Wells Fargo Bank, and other accounts at Bank of America, JP Morgan Chase and Sunwest Bank.

The indictment states that over the course of five years, Epefanio, Yoder, Lowry and Schneider wrote checks from HMS or HMS Foundation accounts “to themselves or other individuals  who held administrative positions” at the school “to create the appearance that the funds were being utilized for the operation of HMS” while also converting checks written to them into cash. In order to avoid cashing large checks at a single location, the indictment states, multiple checks for smaller amounts were often issued “on or near the same date.”

The indictment states that all those named also used cash rather than checks or debit cards “so as to spend funds without creating a document trail.”

The indictment also alleges that Epefanio, aided and abetted by Yoder and Lowry, embezzled $5,000 from the federal National School Lunch Program.

Prosecutors are seeking a forfeiture of $980,215.47, which they say represents the amount of money involved in all offenses.