Not-guilty pleas to theft

A Layton couple accused of stealing more than $4 million in federal education funds from the Davis County School District appeared in federal court Monday and pleaded not guilty to the charges.

Outside of court, the couple's attorney had harsh words for federal prosecutors and their case. Paul Gotay, attorney for Susan and John Ross, called the allegations against his clients "crap" and expressed outrage that federal prosecutors plan to file a motion with the court to have him removed from the case.

Susan and John Ross were indicted last week on 47 counts of mail fraud, money laundering, theft of government funds and copyright infringement. Prosecutors allege that while working as the district's director of Title I federal funds, Susan Ross used two shell companies to sell pirated education materials back to the schools at inflated prices.

At the same time, John Ross was working as the district's grant writer. The indictment accuses the couple of defrauding the district of $4.3 million in federal Title I funds between 2000 and 2005. Title I funds are geared toward helping disadvantaged, minority and disabled students.

Officials with the FBI and U.S. Attorney's Office accuse the Rosses of using the money to fund a "lavish lifestyle," including buying properties, cars and pricey vacations.

A third school district employee, Stella Smith, who was Susan Ross' secretary, has been indicted on charges of running an embezzlement scheme. Smith is charged with 37 counts of mail fraud, accused of creating fake book orders and charging the school district for some $338,000 in books it never received.

In court Monday, both the Rosses and Smith entered not-guilty pleas to the charges.

Assistant U.S. attorney Barbara Bearnson said her office had no problem allowing all three to remain free, but she said that while serving a recent search warrant, FBI agents discovered a book on "how to change your identity" in the Rosses' possession. Bearnson requested a detention hearing for next week and asked the court to impose strict supervision on the couple.

Gotay countered that the book belonged to a son of the couple, who used it to cope with his bipolar disorder.

"This book has nothing to do with the illness of manic depression," Bearnson said.

Last month, Susan Ross' son, Curtis Scott Ward, 36, pleaded guilty to felony identity fraud in 2nd District Court in Farmington in an unrelated case.