defrauded taxpayers by misleading them about the purpose of voter-approved bond measures, including the nearly $1 billion bond passed two years ago, a parent group alleges in a lawsuit filed this week.
sued DPS in Denver District Court on Tuesday, accusing the district of racketeering and violating the Colorado Organized Crime Control Act through a scheme to generate debt in violation of state law.
The allegations levied by Mamás de DPS first appeared in a lawsuit the group filed in 2024 seeking to prevent DPS from closing schools due to falling K-12 enrollment. That lawsuit is still ongoing, but the group decided to file a second lawsuit following what attorney Lisi Owen called “misrepresentations” by DPS officials in the initial case.
“The districtap response to the prior lawsuit was/is disappointing to say the least,” she said. “We don’t believe the district is prepared to… take responsibility and accountability for what has gone on here.”
DPS spokesman Scott Pribble said, in a statement, that district leaders “look forward to our opportunity to defend ourselves against another frivolous lawsuit.”
“The use of the Colorado Organized Crime Control Act against a standard and widely accepted method of public finance used by school districts and other government agencies across Colorado is an overly aggressive legal tactic designed solely to create headlines,” he said. “Colorado courts have repeatedly upheld the constitutionality of certificates of participation.”
In their new lawsuit, Mamás de DPS accuses the district of using a nonprofit called Denver School Facilities Leasing Corporation to obtain titles and mortgages for 33 school buildings.
The nonprofit leases the buildings back to DPS, which allows Denver School Facilities to mortgage the buildings with a bank trustee that collateralizes the buildings in exchange for debt proceeds, according to the lawsuit.
Mamás de DPS alleges in the lawsuit that this tactic is used to “evade liability for violating the Colorado Constitution’s prohibition on debt.”
“The lease payments guaranteed the mortgage,” Owen said. “…First of all, why are we leasing all of our own buildings? Itap not just a lease, itap a whole complicated transaction.”
In exchange for debt proceeds, the trustee — Wells Fargo — agrees to issue certificates of participation to private investors, the lawsuit states.
DPS’s bond measures — which the district asks voters to approve every couple of years to pay for building maintenance and facility upgrades — are both related to the building leases and a separate problem, Owen said.
The district is using the proceeds from bonds to take on more debt to pay off other debt and misleading voters about why it needs the money, she said.
“They are using bond money to pay a certificate of participation debt,” she said. “What that shows us is that DPS is relying on bond money to pay back this non-voter-approved debt that they are taking out in secret.”
Mamás de DPS is asking the court to order Denver School Facilities and Wells Fargo to return ownership of the school buildings to DPS and appoint a conservator or special master for the district who can recoup the financial losses sustained in the scheme, according to the lawsuit.
