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In a case with ties to a federal criminal investigation, a North Florida woman is suing the Florida Department of Education for religious discrimination.

Karen W. "Kay" Stripling, an evangelical Christian from Marianna, says her company - which helped high school drop-outs earn diplomas through GED classes in churches - was targeted during a "witch hunt" of faith-based providers, according to a lawsuit filed in late June in Leon County Circuit Court.

Education Department officials refused to pay her company, Read & Lead, more than $200,000 it owed and then told state and federal investigators she mishandled public money, the suit says.

The suit says those statements led investigators to threaten Stripling with a federal indictment, but that investigators backed off after concluding the department's assertions were wrong.

"I want the truth to come out. And I want to be restored," said Stripling, 48, who says she suffered a nervous breakdown and spent her $150,000 life savings trying to clear her name.

Stripling is represented by Ken Sukhia, a former U.S. attorney. Sukhia handled the federal overseas and military ballot cases for George W. Bush during the 2000 Florida recount, was personal and campaign attorney for Jeb Bush and was Gov. Charlie Crist's personal counsel before Crist was attorney general.

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In her lawsuit, Stripling says some department officials resented the involvement of faith-based companies in educational activities and subjected them to unwarranted audits.

The suit also says Stripling discovered through a public records request that the Education Department lost most of her files, and that employees had "managed to insert into Plaintiffs' official DOE file numerous press clippings concerning Christian activism in public education," including pieces that criticized Jeb Bush's support for private-school vouchers and mocked creationism.

Education Department spokesman Tom Butler said he could not comment on the specifics of the suit. But he noted the department has a bureau for faith- and community-based outreach with nearly 500 organizations on its contact list.

Former Education Commissioner John Winn, who headed the department from August 2004 to February 2007, said he was generally familiar with the case and was "confident the DOE did not act wrongly."

Winn's predecessor, Jim Horne, could not reached for comment Wednesday afternoon.

According to the lawsuit, problems began in December 2003, when officials refused to pay an invoice for $152,000, saying the company had to present receipts and other documents for expenses. Stripling said no, noting the department had approved more than $200,000 worth of identically formatted invoices during the first year of her contract. She also said that her contract was not "reimbursement based" but "performance based," meaning she got paid based on whether students were meeting program goals.

The suit says Education Department officials told state and federal investigators her program was based on a cash advance system, and that she had commingled cash advances with her personal money.

Last summer, Stripling said, authorities told her "the FBI had uncovered enough evidence to justify an indictment against me." But she said they began to back off after she presented records to an FBI agent showing she had never received cash advances.

Stripling said she is no longer the target of a federal investigation, and believes the FBI is now investigating Education Department employees.

Jeff Westcott, a spokesman for the FBI's Jacksonville office, said he could not comment on the specifics of any ongoing probe. But he said matters referred to in Stripling's complaint are now the subject of a wider investigation.

Butler, the Education Department spokesman, said he was not aware of any FBI investigation involving department employees.

Ron Matus can be reached at (727) 893-8873 or Comments can also be posted on the Times education blog, the Gradebook, at