Utah is holding off on probe of school-fitness foundation

AMERICAN FORK — The Utah Attorney General's Office is biding time before launching an investigation into the National School Fitness Foundation, a nonprofit organization that filed for bankruptcy in June amid allegations that its school fitness equipment program was not as charitable as it professed to be.

The office will instead wait for a decision from Minnesota's Attorney General's Office, which has been investigating the foundation for several months.

The foundation arranged to sell $77.5 million in stationary bicycles, weight machines, treadmills and other equipment to more than 600 schools in 20 states. What schools and former president Cameron Lewis dispute is whether schools were told they would be reimbursed for the full cost of the equipment through donations and grants solicited by NSFF.

The foundation stopped making reimbursement payments to schools in April after Minnesota Attorney General Mike Hatch accused Lewis of operating a pyramid scheme by using money from newly enlisted schools — not donations or grants — to reimburse the schools already in the program. In May, a civil suit was filed in Minnesota by the U.S. Attorney's Office alleging mail and wire fraud.

Utah Assistant Attorney General Neal Gunnerson said he's been in contact with the Minnesota Attorney General's Office, and that they have all the information they need to press criminal charges there.

Gunnerson said if that's the case, he will not file charges in Utah, as Minnesota has already gathered all of the information to prosecute.

"They have evidently got all of the information that we don't have without going through a duplication of all their discoveries," Gunnerson said. "So I'm trying to contact the attorney general there to find out what's going on, because if they're going at them criminally, we won't. They can handle our victims here from there as well as we could theirs from here."

Gunnerson said if Minnesota decides against prosecution, Utah would seriously consider it. "If they decide not to go, it's something that we'll still consider. If they decide to go, we'll look at it," he said.

Gunnerson said Minnesota is pushing faster than Utah because school districts there have been expressing more concern to the attorney general's office. Just 16 Minnesota schools are part of NSFF's program, compared with 131 Utah schools. But Utah schools were among the first to buy in, and have generally received more reimbursement payments than schools who signed up more recently.