A politically connected bus-company owner who made tens of millions of dollars from contracts with the Chicago Public Schools pleaded guilty Monday to cheating on her taxes.
Jewel Lockhart, 73, could now be looking at between three and four years in prison. She pleaded guilty in the courtroom of U.S. District Judge Robert Dow to filing false tax returns, but she also admitted she impeded the IRS.
Dow set an Oct. 3 sentencing date for the owner of Jewel’s Bus Co.
The feds in 2016 accused Lockhart and an unnamed family member of not only hiding income from her company’s tax-return preparer but also dodging employment taxes and lying about the use of corporate funds to purchase a home in the city’s Oakland neighborhood for $500,000 and to renovate it for $600,000.
Lockhart also lied to the IRS about her company’s clients and its bank accounts, according to her indictment.
In March, a year and a half after prosecutors charged Lockhart, Chicago’s Board of Education voted to permanently ban the politically connected bus company — but oddly, not its owner — from ever doing business again with Chicago Public Schools.
CPS officials told the school board that Jewel’s “overbilled the board an estimated $3 million” by submitting “false and/or exaggerated bills.” The South Side bus company also “used vans instead of buses in violation of its contract with the board and created a potential safety issue for the students transported in those vans” in 2010 and 2011.
In 2014, CPS fired the company, accusing Jewel’s of overcharging, and threatened to ban the bus company from ever again getting CPS business. Officials didn’t begin to act on that threat until November and still haven’t said why they waited.
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The Chicago Sun-Times reported in 2016 that the Chicago Park District hired Jewel’s to bus kids to and from summer camps that year — despite warnings from a CPS official who said he had “uncovered a great deal of illegal activity” by the company.
The Rev. Jesse Jackson intervened with schools officials on behalf of Jewel’s in 2010 and again in 2015, records showed. Jackson told the newspaper he called then-CPS CEO Forrest Claypool to defend Lockhart’s company because she was an “outstanding community servant” he’d known for years.
CPS paid Jewel’s more than $75 million in the 11 years before the school system broke its contract with the company.