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A faith-based education provider says her company was the target of a "witch hunt."

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 held in churches - was targeted several years ago 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 and the possibility of fines and prison time, 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 with high-profile ties. Sukhia handled the federal overseas and military ballot cases for President George W. Bush during the 2000 Florida recount, served as personal and campaign attorney for former Gov. Jeb Bush and was Gov. Charlie Crist's personal counsel before Crist was elected attorney general.

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The Education Department awarded Read & Lead a grant in 2002 to help hundreds of high school dropouts in rural North Florida read better, get GEDs and find better jobs.

But 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 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.

Stripling's suit names the Education Department and the Department of Financial Services, which pays education vendors. It also alleges breach of contract and defamation.

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

"Our partnerships with faith-based organizations should speak to the fact that we have a long-standing relationship with them, and I believe it to be a good relationship," he said.

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

"We'd never do that," he said of religious discrimination.

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

Stripling said she co-owned and managed a dental practice with her ex-husband before applying for a two-year, $200,000-a-year grant from the department in 2002. She said she was motivated by President Bush's call to the faith-based community to become more involved in helping "our most needy students."

She said a network of churches referred students to Read & Lead and allowed the company to use their facilities for classroom space.

According to the lawsuit, problems began in December 2003, when department officials refused to pay an invoice for $152,000, saying Stripling's company had to first present receipts and other documentation 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 pointed out 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 officials told state and federal investigators Stripling's program was based on a cash advance system, and that she had commingled cash advances with her personal money, in apparent violation of federal law.

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 any 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 court complaint are now the subject of a "wider investigation."

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

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