Couple in school scam cuts price for home
Listing reduced by $1M as charter’s founders awaiting sentencing seek fast sale of mansion
Faced with a $4.4 million restitution bill stemming from an embezzlement case, Varnett charter school founders Marian Cluff and Alsie Cluff Jr. have dropped the list price of their south Houston mansion by $1 million in an effort to sell the estate faster, court records and online listings show.
The Cluffs, a husband-andwife duo who admitted to embezzling $2.6 million in schoolrelated funds and failing to disclose the money on federal tax returns, are seeking buyers for their six-bedroom, 7,000square-foot estate as they try to pay back the government and local victims. After originally listing their Riverside Terrace mansion at $3.5 million, the Cluffs gradually have dropped the price to $2.5 million — still the most expensive listing in a 2.5mile radius, according to the Houston Association of Realtors’ website.
The couple, who founded the 1,600-student Varnett school network in 1984, pleaded guilty last year to single counts of mail fraud and conspiracy to commit tax evasion after investigators discovered the embezzlement scheme.
More than $1 million of the $2.6 million came from parents, who gave school officials money meant for field trips and fundraisers, according to a plea agreement.
Investigators said other Varnett employees were not aware of the scheme. In addition to paying back the $2.6 million, the Cluffs agreed to pay $1.8 million in unpaid taxes, penalties and interest.
In a court filing ahead of a sentencing originally set for Friday — it since has been rescheduled for mid-June — lawyers for the Cluffs said the couple already has set aside $1.6 million for restitution.
The Cluffs have “consistently manifested their desire to pay full restitution before sentencing,” with plans to sell their 1.95acre estate and hand over the proceeds, their lawyers said.
Two years after the home went on the market, it still has not sold. In a court filing last week, the Cluffs’ lawyers said that partially is “due to the publicity surrounding it,” citing a May 2016 article by the Houston Chronicle about the listing. The filing does not cite any evidence that media coverage has contributed to the home remaining on the market.
Harris County officials appraised the Cluffs’ property at $1.7 million in 2016 and 2017. It was listed at $1.6 million in 2011 shortly before the Cluffs bought the estate. It is not clear what upgrades, if any, the Cluffs have made to the home since 2011.
The Cluffs’ lawyers, Dan Cogdell and Cordt Akers, wrote in court filings that the couple dropped the list price to $2.5 million “as a gesture to show their serious intent to sell the home as quickly as possible.” Attempts to reach Cogdell and Akers were not successful Wednesday.
The Cluffs originally founded the Varnett school as a private institution, converting it to a taxpayer-supported charter network in 1998.
The organization has received about $11 million to $13 million in state funding annually over the past several years. Marian Cluff served as the network’s board president, principal and superintendent, and Alsie Cluff Jr. worked as vice president and treasurer.
Prior to their indictments, the Cluffs engaged in pervasive conflicts of interest and questionable governance practices, a Texas Education Agency investigation found.
The couple also received salaries that were significantly higher than average for leaders of similar-sized schools. In 2013-14, the final year with available compensation data for the couple, Marian Cluff earned $266,400 in salary and benefits, while Alsie Cluff Jr. received $184,000.
Terms of the plea agreement call for a maximum possible sentence of 10 years in prison. Federal prosecutors did not object to delaying the Cluffs’ sentencing as they try to sell their home.