Nearly 100 Texas school districts that filled their gyms with what they thought was millions of dollars worth of free exercise equipment may now be stuck paying the bills, reports the Houston Chronicle. On Tuesday, the Texas Education Agency e-mailed an alert to the state’s superintendents warning them that the Utah-based National School Fitness Foundation had filed for Chapter 11 bankruptcy and is the target of multiple investigations by various state and federal authorities. Formed four years ago to battle the nation’s childhood obesity problem, the foundation promised to reimburse school districts for exercise equipment. In return, schools agreed to follow the program’s exercise regimen, track their students’ progress and report the data to the foundation for studies.
One Houston-area school district, Cy-Fair, is owed $650,000 for equipment the district bought for five high schools. The Utah foundation stopped making payments to Cy-Fair and some 600 other school districts in April, when its officials say they began suspecting its president was stealing money. The man resigned amid allegations that he and his father siphoned millions from the nonprofit organization, spending money on home improvement, hunting trips, scuba lessons, political contributions and an airplane, among other things. Minnesota Attorney General Mike Hatch has called the operation a “pyramid scheme.” Hatch estimated the foundation owes as much as $77.5 million.