Program Director Admits Defrauding School District : Education: Head of independent-study institute cheated L.A. Unified of $700,000 by altering records.

The director of a private independent-study program in South-Central Los Angeles pleaded guilty Friday to felony charges in connection with a scheme that defrauded the Los Angeles Unified School District of more than $700,000.

Arnese Clemon, who had previously denied the crime, admitted in federal court that she knew records at the Institute for Successful Living had been altered to inflate the number of dropouts studying under the program. Under its contract with the district, the institute was paid according to the number of students who completed course work.

However, Clemon stopped short of accepting full responsibility for the crimes, saying she became aware only after the fact that records had been created for hundreds of phantom students.

She did acknowledge that she later defended the institute’s student accounting system to district officials, in response to a district audit that uncovered irregularities in its rolls.

Shaking his head, U.S. District Judge David Kenyon asked Clemon how she was able to justify submitting records for students who had not actually done the work.

“I talked with the (employees) involved and they assured me things were fine,” she said.

The district’s eventual determination of accounting problems at the institute led to its closure in 1992 and helped prompt the district to begin its own independent-study program instead of contracting out the services.

A consultant who worked as Clemon’s assistant, Dewey Hughes, pleaded guilty Jan. 30 to charges related to the same crime. But he told Kenyon at his hearing that he acted only on orders from Clemon.

Both Hughes and Clemon were indicted by a federal grand jury in December on 20 felony charges.

Clemon faces a maximum 15-year sentence and a $750,000 fine on the three charges, all of which involve mail fraud because documents key to the scheme were transported to and from the district by U.S. mail in 1989, 1990 and 1991.

Hughes could face up to 25 years in prison, but at the time of his plea, government attorneys said he would probably serve fewer than five years.

On Friday, attorneys would not comment on Clemon’s possible sentence or on whether either she or Hughes is providing investigators with information about others who may have taken part in the fraud.

Investigation into the institute is continuing, and federal and state prosecutors have said they believe others were involved.