Three people connected to a community college in the Mahoning Valley that closed last fall have been indicted for stealing around $20 million in financial aid intended for students. The scheme is alleged to have led to the closing of Eastern Gateway Community College, which had more than 15,000 students enrolled.
The indictment accuses the three of illegally diverting Pell Grants, other federal financial aid and state subsidies to a program offering free tuition for union members and their families. Prosecutors said millions of dollars were paid to companies owned by two defendants, and that the third knew about the scheme and signed off on it.
“Our indictment alleges a massive, multifaceted white-collar financial operation that siphoned roughly $20 million of public and federal funds," said Ohio Auditor Keith Faber. "The indictment alleges that the defendants falsely claimed the scholarships for funding free tuition for their online program, when in fact the program was funded by Pell Grants for needy students combined with massive tuition write-offs. This is what is alleged to have fueled the defendants profits."
Faber added, “To keep this operation running and on life support, the Student Resource Center allegedly bribed public officials at Eastern Gateway, including top financial aid and admissions officers, and tampered with college records to hide these corrupt arrangements from regulators and auditors."
Eastern Gateway Community College's former president and CFO Michael Geoghegan was named in the indictment, along with Michael Perik and Nicole Rowe Colclasure. Perik was CEO and Colclasure was president of the Student Resource Center, the for-profit private contractor that managed financial aid and online enrollment for the college. Perik and Colclasure each face a dozen felony counts, while Geoghegan is facing nine felony charges.
Eastern Gateway Community College was established in 1968 as Jefferson County Technical Institute and had campuses in Steubenville and Youngstown. Faber said the shutdown of the college in September 2025 "goes far beyond dollars and cents."
"The collapse and eventual closure of Eastern Gateway left a multi-county region in eastern Ohio without a local community college option, creating effectively a higher education desert," Faber said. "The loss of Eastern Gateway delivered a severe blow to a community that relied heavily on it for vocational and academic achievement."
Attorneys for the three defendants pushed back on the charges.
David Axelrod and Karl Schneider represent Geoghegan and Colclasure and wrote in a joint statement: "There was no crime or lack of transparency. EGCC’s operations were reviewed over a decade by no less the Ohio Attorney General, the United States Departments of Justice and Education, the Education Department’s Inspector General, specialized Title IV counsel appointed through the Ohio Attorney General, an independent auditor appointed by the state auditor, and the Ohio Office of Budget and Management – in addition to two federal courts. Further, in agreeing to the dismissal of a federal court action against the college after a lengthy investigation, the Department of Justice stated that the public interest did 'not warrant the continued expenditure of government resources to pursue or monitor the action.'"
Brad Babin represents Perik, and said in a brief statement: "There is no statute of limitations for political retribution, and this is purely political payback."
The case was filed in Jefferson County Common Pleas Court on Wednesday. Arraignment for all three defendants is set for Oct. 14.
