Mother, Daughter Sentenced in $548K School Fraud and Money Laundering Scheme

A mother-daughter duo was sentenced on May 6 for their roles in a procurement fraud and money laundering scheme that targeted the Commonwealth of the Northern Mariana Islands Public School System, according to federal authorities.

Clarissa Adlawan, 55, received a 48-month prison sentence, while her daughter, Giselle Butalid, 34, was sentenced to 18 months in prison by Judge Ramona V. Manglona in the U.S. District Court for the Northern Mariana Islands.

Federal prosecutors said the pair conspired to steal money intended for educational resources and used some of the proceeds to fund luxury travel and construct a house in the Philippines.

Adlawan, originally from the Philippines and now a lawful permanent resident of the United States, pleaded guilty to one count of conspiracy to commit an offense against the United States and one count of money laundering conspiracy. In addition to prison time, she was ordered to serve three years of supervised release and complete 100 hours of community service.

Butalid, a naturalized U.S. citizen originally from the Philippines and a resident of Saipan, pleaded guilty to the same charges. She was also sentenced to three years of supervised release and required to complete 100 hours of community service.

The court ordered the defendants to jointly pay $548,788 in restitution. Two properties they owned in the Philippines were also ordered forfeited.

According to prosecutors, Butalid worked for the CNMI Public School System and used her position in the procurement process to steer contracts to One Legacy LLC, a company operated by her and her mother.

Authorities said the pair concealed the conflict of interest while selling educational materials to the school system between October 2021 and August 2022.

Investigators later discovered that some of the purchases were fraudulent or entirely fabricated. Prosecutors said Butalid forged documents to disguise “ghost” purchases in which the school system paid for materials it never received.

Court records cited multiple fraudulent transactions, including payments of $50,000 and $52,500 for online learning materials that were never procured. Shortly after receiving those funds, the defendants allegedly traveled to the Philippines and withdrew about $10,000 in cash from ATMs.

Authorities also identified a separate $113,020 fraudulent payment that was followed by approximately $65,000 in cash withdrawals before another overseas trip. Prosecutors said the payment was made shortly after Public School System officials confronted Butalid about her ties to the companies involved. Although she resigned, prosecutors said she remained employed long enough to carry out “one last act of fraud.”

Prosecutors acknowledged that the defendants accepted responsibility early in the case and expressed remorse. However, they argued Adlawan failed to cooperate fully regarding a nine-room home built in the Philippines using stolen funds. Her plea agreement required her to help authorities recover the property so it could be liquidated and used toward restitution.

“The defendants’ conduct went beyond defrauding government agencies,” stated U.S. Attorney Shawn N. Anderson. “Ultimately, children were deprived of educational resources and opportunities to learn. Any sense of justice required terms of imprisonment.”

Federal investigators from the IRS Criminal Investigation Division, the Department of the Interior Office of Inspector General, the FBI and the CNMI Office of the Public Auditor assisted in the investigation.