She billed for bogus karate school students in South Florida. Now, she’s a convicted felon

The operator of a Homestead martial arts academy that ripped off taxpayers by billing for “ghost” students was spared prison after shelling out $225,000 in restitution and fines.

Kelly Regalado, who managed the United Martial Arts Academy, pleaded guilty on Friday and was sentenced to 10 years of probation. The school, which had largely been funded by public grants, was also dissolved. Regalado, while she’s on probation, is also barred from working for any organization that receives public money.

Regalado, 45, pleaded guilty to charges of organized scheme to defraud and wire fraud. Her defense attorney, Miguel San Pedro, declined to comment after Friday’s hearing.

The plea happened nearly two years after prosecutors charged Regalado and the school itself with fraudulently billing over $350,000 from the Miami-Dade Children’s Trust, a taxpayer-funded organization that awards grants to programs that serve poor and at-risk children.

The school, according to the Miami-Dade Inspector General’s Office, billed for students that never existed.

According to a memo released by Inspector General Felix Jimenez, the academy was enrolled in two programs — one for after-school programs, another for summer camps — that reimbursed for costs associated with students and employees. Agents reviewed the academy’s bills between 2013 and 2017.

They discovered that Regalado used fake checks, bogus records of money transfers and even sham student attendance data to bill over $350,000. The Trust actually paid out just under $300,000.

The school also inflated employee costs, agents found. That included paying Kelly Regalado’s mother under two different names, money that was kicked back to her daughter, the memo said. When the Trust questioned Regalado, she provided “forged bank statements,” Jimenez wrote.

She ran the academy with her husband, martial arts instructor Henry Regalado, who describes himself as holding a “ninth-degree” black belt in Shaolin Kung Fu. He was not charged.

Regalado paid $180,000 in restitution to the Trust. An additional $45,000 was paid to the Inspector General’s Office, prosecutor Carol Jordan told Circuit Judge Tanya Brinkley.

This story was originally published May 27, 2022 at 11:55 AM.