William Gary Rye: Former Dayton superintendent sentenced to two years in prison for embezzlement

Maximum sentence 'not enough,' predecessor says

COVINGTON, Ky. – A former superintendent of Dayton Independent Schools was sentenced to two years in prison Tuesday for embezzling hundreds of thousands of dollars from the school district.

William Gary Rye, 66, will have to serve at least 85 percent of his prison sentence (roughly 20 1/2 months) under federal law. He will also serve three years' probation following his release.

Rye was released on his own recognizance following sentencing by federal judge David Bunning and ordered to report on June 2 to a prison facility designated by the Bureau of Prisons.

Rye could have faced up to 10 years in prison if convicted but accepted a plea deal of 18 to 24 months last December.

Rye, of Walton, admitted that he embezzled approximately $193,149.22 from the district between 2004 and 2012, when he retired. He has repaid that amount.

However, a civil settlement calls for Rye to pay Dayton $473,000. 

Rye's predecessor as superintendent, Jack Moreland, said Rye deserved the maximum 10 years - and more.

Moreland, superintendent from 1978 to 1996 and a highly respected leader in Northern Kentucky, wrote a letter to Bunning two weeks ago saying the damage Rye did to one of Kentucky's poorest school districts "will have implications for many years to come.

“How many children were irrevocably abused by his greed? … The maximum sentence in this case is not enough,” Moreland wrote in a letter filed with court documents. "His debt to society should be equivalent to the number of lost learning opportunities and lost potential his greed created."

"Educational opportunities lost can never be recovered," wrote Moreland, now president of Southbank Partners. "Whether it is the lack of equipment, school supplies, field trip opportunities, or increased class sizes, each family in the community was dealt a blow that piled on an already difficult situation."

A retired Lincoln Elementary teacher, Barbara Meyer, wrote Bunning that Rye had the gall to complain about the cost of hiring substitutes for several teachers who were suffering with cancer.

"Mr. Rye, while embezzling funds, complained that the school district was short of funds because of all the money being spent on substitute teachers for those teachers. He made those dear women feel very guilty about being ill," Meyer wrote.

"This was especially horrible and demeaning because a couple of those teachers died from their cancer."

Meyer, who said she taught at Lincoln for 28 years, wrote that Rye's "embezzling of school funds deeply affected the students of Dayton Independent Schools in many ways.

"I witnessed the students at Lincoln Elementary having to go without new technology and much needed new textbooks. Lincoln Elementary lost its full-time music teacher and librarian. … Teachers had to go to Crayons 2 Computers and buy supplies with from money from their own pockets. Field trips, which are very important especially to students with low social economic backgrounds, were limited and at times even denied," wrote Meyer.

"Not only were educational opportunities lost, but the students did not always have the best learning environment. Many needed repairs and improvements did not happen. Instead of buying new whiteboards to replace blackboards, pieces of shower board were purchased and hung in classrooms. Janitorial staff was cut and schedules were juggled to 'save' money.

"Needless to say, the school was not as clean as it should have been," Meyer wrote.

"I hope that justice will be served for those students."

The Dayton School Board sent a letter to Bunning saying it was satisfied with its settlement with Rye and did not intend to take further action against him.

"Although not legally responsible for Gary's criminal and negligent conduct, Pam Rye (Gary's wife) signed a promissory note personally guaranteeing the full satisfaction of the criminal restitution and the civil agreement," the school board said.

"Gary and Pamela Rye agreed as part of the settlement to bind their heirs, which provides additional security that the Dayton Independent School System will receive the remaining balance of the agreed upon settlement."

An audit revealed that Rye took at least $225,000 in improper payments and benefits over eight years, state auditor Adam Edelen said in November.

That included:

> $146,276 in retirement-related benefits without the board’s approval.

> $47,429 for sick and annual leave days. The board did not approve some of the leave; some leave was taken but not deducted from his leave balance.

> $21,464 in fuel purchases for his personal vehicle charged to a district credit card.

> Nearly $10,000 in false reimbursement claims.

The audit report indicated Rye intimidated and threatened staff responsible for issuing checks if they questioned him.


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