School fitness program runs into financial hurdles

Utahn Cameron J. Lewis had a deal for public schools across the country: If they would buy a full set of fitness equipment, he promised his charity would reimburse them later with money from private donations or government grants.

If that sounds too good to be true, it's turning out that way. Lewis says he can no longer afford to reimburse about 600 schools in 20 states that bought $77.5 million worth of weight machines, treadmills and other equipment.

Two dozen schools in Alpine School District use equipment from the foundation.

Minnesota Attorney General Mike Hatch has accused Lewis of operating a pyramid scheme by using money from newly enlisted schools — not grants or donations — to make token reimbursements to schools that signed up early to buy or lease the equipment.

Many of the schools were left unable to pay off bank loans or satisfy leasing terms.

"Usually a Ponzi scheme involves little old ladies," Hatch said earlier this month. "To be able to take that kind of money out of government agencies is stunning."

In Ohio, Chris Essman, treasurer for Bexley City Schools, said the school district has received $70,000 in reimbursements. It still owes $140,000 in lease payments on the equipment.

"It's one of those things that sounded too good to be true," Essman said. "I was disappointed more than shocked."

An investigation conducted by the Associated Press reveals Lewis has had a string of failed businesses, a history of personal bankruptcy and used his nonprofit foundation to give himself a $317,358 salary.

Lewis, 33, did not dispute those findings but denied any impropriety — blaming Hatch's investigation for the collapse of his Utah County-based charity, the National School Fitness Foundation. The foundation's headquarters are in American Fork.

"We're not obligated to make those contributions. We have willingly done so for as long as we can," Lewis said. "We were trying to do a good thing, and we're getting killed for it."

Lewis makes for an unlikely philanthropist; he claims to have poured $1.6 million of his own money into the foundation. But when filing for bankruptcy in 1996, he listed $6,840 in assets, including a 6-year-old Isuzu truck and an electric guitar, with nearly $20,000 in liabilities.