Federal officials claim the couple sold pirated textbooks at exorbitant prices using two shell companies. The indictment says the Rosses produced unauthorized copies of copyrighted books, specifically color photocopied and spiral-bound versions, and funneled them through a company, Notable Education Writing Services (NEWS), which the couple owned and controlled.

The books would then be transferred to a second company, Research and Development Consultants Inc. (R&D), which was run by two associates of the Rosses. R&D then sold the books to the district at inflated prices, the indictment says.

One example in the indictment says R&D had charged the school district $93 for a book that at the time had a list price of $13.22. The books themselves were not originals but rather color photocopy versions.

Tolman said the printers that the Rosses used claim they were convinced that reproducing the books was legal. R&D allegedly split the proceeds of the scheme. However, the company's owners have not been charged.

The couple faces 10 to 20 years in prison for each of the counts of mail fraud, money laundering, theft of federal funds and copyright infringement.

Susan Ross said her husband, who was Title I director for the state before working with the district, brought in $26 million in grants as a grant writer. "We did nothing but protect at-risk kids," she said.

Their attorney, Paul Gotay, said his clients are being "picked on" by federal officials, and the money in their bank accounts will match up with their tax returns. The district, Gotay said, is trying to cover up serious mismanagement of federal funds by blaming his client and her husband.

Gotay said that R&D had legal rights to reproduce the education materials and that Ross worked with the company to produce a package "compendium" of materials to sell to the school district. Ross insists that when she first was put in charge of Title I funds, she received permission from the district's superintendent and attorney to work with R&D on producing the materials.

Gotay acknowledged that Ross did receive a cut of the profits from R&D through her company NEWS but called it a "side business." When asked if Ross disclosed to the district that she was running NEWS, Ross responded the district knew she was working with R&D.

Meanwhile, another federal indictment charges that Susan Ross' secretary, Stella Smith, had a separate scheme running. According to a 37-count indictment, Smith submitted paperwork to the school district to have E.B. Smith Co. approved as a vendor. Using that company name, Smith submitted purchase orders for books that had not been requested by district employees.

Once purchase orders were issued, according to the indictment, Smith mailed fraudulent invoices showing that E.B. Smith Co. had supplied the books. However, no such books were delivered. The indictment says that Smith collected about $338,000 in fictitious book purchases between 1999 and 2005. Smith faces up to 20 years in prison for each count of mail fraud.

"This case represents an egregious abuse of the public trust by these three employees of the Davis School District," FBI Special Agent in Charge Tim Fuhrman said. "They abused the trust placed in them by their colleagues and other professionals in the Davis school system. They abused the trust placed in them by the students of the Davis School District. And, finally, they abused the trust placed in them by the citizens and taxpayers of Davis County and the state of Utah."

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E-mail: gfattah@desnews.com