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Deal Reached Over Bennington School Tax Fraud Accusations

Prosecutors say the former officers of a Bennington school for socially and emotionally challenged children have agreed to plead guilty to federal tax fraud charges and pay a total of $4.3 million to settle potential civil health care fraud liability.

The office of the United States attorney for Vermont said Tuesday that 81-year-old Matthew Merritt, Jr., president of the for-profit Bennington School, Inc., and his son, 54-year-old Matthew Merritt III, and his son-in-law, 58-year-old Raymond Crowley, the school's plant manager, will pay a total of $3 million to Vermont and the federal government.

The government says a fourth person, 59-year-old Jeffrey LaBonte, the program's executive director, also has agreed to plead guilty to a federal tax fraud charge, and will pay $1.3 million.