Jan.07, 2010, 01:00 AM EST

The onetime director of the University of Rhode Island’s School of Education will plead guilty Friday to charges that he and a former colleague conspired to embezzle $1.7 million from an education center at URI.

Robert Felner, a nationally known educator, will enter guilty pleas to 10 charges that include money laundering, fraud, tax evasion and conspiracy, in U. S. District Court for the Western District of Kentucky Friday afternoon, according to his lawyer Scott C. Cox.

Cox would not disclose the terms of the plea agreement reached with federal prosecutors, but he said he expected Felner’s co-defendant, Thomas Schroeder, to proceed to what was to be a joint trial Feb. 1.

Felner and Schroeder were indicted in October 2008 for conspiring to embezzle $1.7 million from URI’s National Center on Public Education and Social Policy, which Felner led, through a dummy nonprofit organization the pair created of a similar name. In addition, federal prosecutors say they embezzled another $576,000 from the University of Louisville and attempted to skim another $240,000.

Felner and Schroeder siphoned revenue away from the URI center by inducing school districts in Atlanta, Buffalo, N.Y., and Santa Monica, Calif., to make payments to the phony nonprofit organization, the indictment said. In addition, Felner is accused of misdirecting other funds — including grants earmarked for the University of Louisville — to cover the URI center’s expenses for legitimate work.

Between 2001 and 2007, Felner and Schroeder made 21 deposits — ranging from $16,500 to $404,000 — into the bank accounts connected to the phony organization, fraudulently concealing that money from the URI center, according to the indictment.

Felner, 59, who initially pleaded not guilty, is also accused of under-reporting his gross income by $1.5 million and under-paying federal income taxes by $500,000 over five years.

The indictment calls on the pair to forfeit $2.1 million gained through the scheme, as well homes Felner bought in Florida and Illinois with the proceeds. Schroeder’s lawyer did not return a phone call Wednesday.

URI is seeking to recover the $1.7 million the two men diverted from the center, said Robert A. Weygand, URI’s vice president of administration.

Weygand noted that the organization had continued to do good work even as the scam unfolded. “It wasn’t a question about the quality of work,” Weygand said. “It was a question of the character of the person who performed the work.”

Felner directed the URI School of Education from 1996 to 2003, while serving as a professor. In 1997, he established the National Center on Public Education and Social Policy, a self-funded organization that generated revenue by contracting with school districts nationwide to provide school assessments. The money generated from that work was used to pay the center’s staff and other expenses.

Felner left URI in 2003 to become dean at the University of Louisville, a position he held until he left to become chancellor at the University of Wisconsin Parkside.

He was forced to decline the appointment after federal authorities launched a criminal investigation into a $694,000-grant Felner received in Louisville that never went to its intended purpose. The investigation led to Rhode Island, where Felner was highly regarded as a researcher for the millions of research dollars he brought during his years at URI.