The head of Shattuck-St. Mary's School agreed to pay a teacher who had child pornography on his work computer $12,500 as part of a confidential separation agreement in 2003, according to recently released police reports and court documents. The agreement came two years after an internal investigation was unable to substantiate claims that the teacher had sexually abused students.

The school official, who didn't report the illegal images to police, also agreed to pay for temporary health insurance for the teacher, provide free tuition for his son and keep the reason for the resignation secret.

Nine years later, the teacher, Lynn Seibel, was criminally charged for possessing child pornography and sexually abusing six students at the Faribault boarding school from 1999 to 2003. He later pleaded guilty to several counts.

The documents show how Shattuck-St. Mary's Head of School Nick Stoneman, who is now the school's president worked with the school's lawyer to approve a resignation letter in which Seibel said he wanted to pursue an acting career in Minneapolis.

Former Shattuck-St. Mary's teacher Lynn Seibel waits as his attorney speaks to reporters after Seibel pleaded guilty to sexual abuse on July 12, 2013, at the Rice County Courthouse in Fairbault. Jennifer Simonson | MPR News 2013

The agreement said that if anyone who wasn't authorized to know about the deal asked about it, Seibel should say "the matter has been resolved." Unauthorized people included students, alumni and their families. Stoneman's decision not to contact police made it possible for Seibel to find work at a Rhode Island modeling school, where he taught children as young as 7.

The deal with Seibel came as the tony Faribault boarding school worked to steady its finances after years of decline. The school now enrolls 451 students from 32 countries, with tuition that ranges from $29,100 to $45,675. It is popularly known as a hockey powerhouse. The same year Seibel left, the school won a national hockey championship with a team that included future NHL players Sidney Crosby and Jack Johnson.

Stoneman, 54, outlined his priorities in handling the Seibel matter in a private memo he wrote to himself in July 2003. After ensuring the safety of students, he wrote, he wanted to prevent the school "from incurring any legal liabilities both presently and in the future from the school's clientele, and from future Seibel employers."

In sworn testimony last year, Stoneman said that the child pornography was not a factor in Seibel's departure, which came about a month after the images were confirmed by experts. "Seibel is separated from the school because of the adult pornography on his computer and in part because he did not take responsibility for that," he said. "Neither of those to me posed an immediate threat to any students."

The newly released documents from the Faribault Police Department, as well as court records and sworn testimony taken as part of a lawsuit filed against the school by an alleged victim of Seibel, provide the most detailed look yet at the school's actions — from an internal investigation of alleged abuse in 2001 to the review of child pornography found on his school laptop in 2003.

They show how top school administrators questioned the claim of a student who reported abuse in 2001 and deferred to attorneys from Minneapolis law firm Dorsey and Whitney, who advised Stoneman that he was not legally mandated to report child pornography to police.

Nick Stoneman, president of Shattuck-St. Mary's School, sat for a deposition in the case of former teacher Lynn Seibel on Aug. 22, 2014. Video courtesy of Jeff Anderson & Associates

The files include letters from the firm's attorneys — Doug Christensen and Ed Magarian — that show the firm had a CD that contained some of the child pornography images from Seibel's computer. Magarian gave law enforcement two disks in 2012.

Stoneman declined an interview request. In a written statement, the school described the deal with Seibel as a standard separation agreement with generic terms.

The statement said the school's lawyers had determined it had no legal obligation to report the child pornography to police.

The school said Seibel was a respected, popular faculty member in 2003 who deserved fair treatment. Leaders were concerned about wrongly accusing Seibel "of a terrible, career-ending crime."

Seibel had blamed the child pornography on a "pop-up infestation," according to the statement, and had threatened legal action against the school. An investigation by the school's counsel found information that appeared to support the claim of "pop-ups," the school said. And Seibel asked to have his computer checked, a decision the school said would've been illogical for someone who had been looking at child pornography.

In the statement, the school repeated what Stoneman had said under oath last year: Seibel did not leave the school because of the child pornography. Rather, he left because he looked at adult pornography on his work computer and tried to blame students.

"While decisions like this one can be judged in hindsight and with today's knowledge of what happened 12 years ago or more," the statement said, "we continue to believe that the decision we made at the time — based on the facts as we knew them in 2003, based on the law as it stood then, and based the circumstances as they existed — was the right one."

Magarian declined to be interviewed, and said in an email that MPR News' questions were based on "a significant misunderstanding" of what happened. Christensen, who is no longer with the Dorsey and Whitney firm, did not respond to interview requests.

MPR News reported in March 2013 that top school administrators and teachers had known in 2000 that Seibel presided over "naked dance parties" in a dormitory basement and held gatherings in which he would have boys expose themselves.

MPR News also reported that the school had uncovered child pornography on Seibel's computer in 2003, but the extent of the school's knowledge wasn't clear.

In sworn testimony last year, Seibel said his resignation deal was handled "beautifully." He had been concerned that someone would call police, he said, and was glad to depart quietly. "I thought it was in my best interests to leave the school," he said. "Everyone was uncomfortable, including myself."

Seibel gave his deposition at the Lino Lakes Correctional Facility, where he was sentenced in 2013 after he pleaded guilty to one count of second-degree criminal sexual conduct, five counts of fourth-degree criminal sexual conduct and one count of the use of minors in a sexual performance. The charge of possession of child pornography was dropped. He is scheduled to be released in December.

'Up against a wall'

In depositions last year, current and former administrators from Shattuck-St. Mary's faced questions about their knowledge of Seibel's misconduct and why they repeatedly chose not to call police.

"If we were to immediately respond to every accusation that we get from any one individual or parent, you wouldn't have an investigative force large enough to ... follow up."

Some administrators said they couldn't recall details of the state law that requires them to report suspected child sexual abuse to authorities. Others said they didn't think the law applied to every allegation. Dennis Brown, who served as Shattuck-St. Mary's interim head of school from 2001 to 2003, testified that he didn't think every claim against a teacher should be reported.

"The bottom line is, if in our business as head of schools, if we were to immediately respond to every accusation that we get from any one individual or parent, you wouldn't have an investigative force large enough to take care of follow-up on all of those accusations," he said.

Brown said he had learned of a child sex abuse allegation against Seibel shortly after he arrived but didn't tell police. He said he deferred to the school's attorneys and didn't ask if anyone else had reported it, "because in our business, once you turn something over to your school lawyers, unless they direct you to do something further with it, then ... you would not do that."

That allegation surfaced in 2001 when a former student, whose name has been redacted from court documents, told Molly Gilbert, then associate director of admissions, that Seibel had sexually touched three male students. He provided their names.

Gilbert wrote a memo documenting the conversation. The former student also said that Seibel taught a special course, according to Gilbert's notes. "Its focus was to teach the boys 'how to make their penises larger,'" she wrote. "He said there was full exposure of his penis by Mr. Seibel in front of the boys, by way of 'demonstration.'"

"I remember feeling like I was literally up against a wall."

Gilbert reported the incident to other administrators, and the school's attorneys began an internal investigation.

In a deposition last year, Gilbert explained that she met with Gregory Kieffer — then Shattuck-St. Mary's head of school — and one or two attorneys representing the school.

"The questions I was asked were, 'Do you realize that these allegations could ruin this man's life?' Meaning Lynn Seibel," she said. "'How can you be sure (the former student) isn't making this up?'"

"It was a really difficult conversation," she said. "I remember feeling like I was literally up against a wall."

As part of the investigation, William Scheel, then president of the board of trustees, got involved. He called the three former students who were allegedly touched by Seibel. Each denied it. Seibel also denied abusing anyone.

"My private conclusion was that probably something went on, but that I could not get the students involved to actually say that."

One of those three former students, however, would later tell police that he had been sexually abused by Seibel. The allegation was included in the 17-count criminal complaint against the former teacher.

Scheel acknowledged in a deposition last year that he had no expertise or training in how to interview possible victims of child sexual abuse. He said that the school's attorney provided him with questions.

"My private conclusion was that probably something went on, but that I could not get the students involved to actually say that, to actually state that any of them had been involved," Scheel testified. "And my public conclusion, or the paper conclusion, is that it was inconclusive."

Scheel said he didn't share his private conclusion with anyone because it was not backed up with "hard data." He also said he didn't tell the school's board of trustees about the allegations "because we had no confirmation that anything had gone on."

In an interview with MPR News, Scheel said it's common for students to complain about teachers, and not every complaint needs to be reported to police. "Alleging that someone is a pervert or whatever is not beyond the capability of a teenage boy who feels aggrieved for some reason," he said.

He said he's not certain whether police in 2001 could have done a better job interviewing the former students. "I don't want to speak badly of the Faribault police, but one wonders," he said. "Did they have the skills then to conduct an investigation to ask questions about sexual misconduct and impropriety with adolescent boys?"

In a deposition last year, attorney Holly Eng, who assisted in the 2001 investigation while working for Dorsey and Whitney, said she reported the allegations immediately to the Faribault Police and Rice County Social Services. She said neither agency appeared interested in pursuing the case.

In 2012, Dorsey and Whitney provided police with notes that Eng said she wrote in 2001 to document those calls.

However, according to police reports, a search of records at the police department and the social services agency found no evidence of a report, and the two people cited as Eng's contacts at those agencies told police that they don't recall any contact with her or anyone else about Seibel. Eng did not respond to an interview request.

'Teen sex,' 'kiddy porn,' 'boyz'

Shattuck administrators and attorneys faced another problem involving Seibel two years later.

"Alleging that someone is a pervert or whatever is not beyond the capability of a teenage boy who feels aggrieved for some reason."

It began in May 2003, when Seibel took his work laptop to the school's technology department for repair.

Bill Moore, the school's I.T. director at the time, discovered pornography and alerted Brown, the interim head of school, according to Brown's interview with police in 2012.

Brown confronted Seibel, and Seibel responded by hiring an attorney. "His reaction, I remember very clearly, was denial, maybe surprise, and a conclusion that the kids must have gotten to his computer when he left it unguarded on his desk," Brown said in a deposition last year.

Seibel wasn't immediately fired, Brown said, because he was under contract for the following school year. Brown contacted Christensen, the school's attorney.

Christensen worked with Moore, and in June 2003, Moore or another school representative sent the hard drive to DataBank Services, a computer forensic firm in Austin, Texas.

Shortly after the hard drive was shipped to Texas, Brown retired, and Stoneman took over as head of Shattuck-St. Mary's.

In early July 2003, the report from the forensic firm and a CD arrived at Christensen's office, at the Dorsey and Whitney law firm.

"To a reasonable degree of scientific certainty, that the hard drive contains ... hundreds of pornography related files."

The report included a letter from DataBank Services examiner Wes Goodwin: "I apologize for the delay in completing this report; however, as you will see, the report includes over 14,000 graphic file references pertinent to this case."

The report concluded "to a reasonable degree of scientific certainty, that the hard drive contains ... hundreds of pornography related files. A significant portion of these appear to be illegal child pornography images."

The firm had found the keyword "child porn" 92 times on Seibel's hard drive, and "teen sex" 338 times, the report said. It also found eight hits for "kiddy porn," 184 hits for "bestiality," and thousands of hits for "jock," "young," "boyz," and "underage."

The firm found so many files that it decided to put some of its findings on a CD.

The contents of the CD would prove critical nine years later, when Faribault police and state investigators searched for evidence that Seibel had possessed child pornography. Magarian, the school's attorney since August 2012, turned over two copies of the CD, according to police records, in 2012.

"He just said, 'Look, I am going to tell you, I don't have any knowledge of anything,' and handed us the stuff and walked away," Special Agent Scott Mueller of the Bureau of Criminal Apprehension said in a deposition last year.

The CD was used to charge Seibel with possession of child pornography, according to Faribault Police Chief Andy Bohlen. However, no one who possessed the CD from 2003 to 2012 was charged, and police never found Seibel's hard drive. In a statement, the school said it doesn't know what happened to the hard drive, but "to the best of our knowledge, it was lost many years ago when our IT department moved offices."

Moore told police that Stoneman gave him the hard drive. Moore said he put it in his desk drawer and didn't know it contained child pornography.

Goodwin, of DataBank Services in Texas, told MPR News in 2013 that his company reports child pornography to the Austin Police Department but could report it elsewhere as well. "There could be various ways to report it," he said.

"It certainly is my understanding it is illegal to possess child pornography under pretty much any circumstances."

However, neither the Austin Police Department nor the FBI has record of any report made by Databank Services about child pornography in 2003. The Faribault Police Department also has no report.

Goodwin wouldn't say what happened: "First of all, I don't have any recollection, and asking questions about a case that long ago, and No. 2, I'm not at liberty to discuss particular cases."

Paul Beaumaster, who was the Rice County attorney at the time, told MPR News in 2013 that he didn't prosecute anyone other than Seibel because he didn't think anyone involved with the school had violated the law.

"There's nothing here that shows anybody accessed those files at the school, other than Seibel," he said.

Martin Cole, director of the Minnesota Lawyers Professional Responsibility Board, said he's not aware of any rule that governs whether a lawyer can possess such material on a client's behalf. "It certainly is my understanding it is illegal to possess child pornography under pretty much any circumstances," he said. However, he's said, it's unclear whether a lawyer is professionally obligated to turn over the images to police.

'In my best interest to resign'

Letters and emails from July 2003 trace what happened next.

On July 7, Christensen, the school's attorney, sent the report and CD via FedEx to Stoneman.

"Enclosed is a report and CD Rom which I received today from Wes Goodwin of Databank Services Information Restoration with regard to the materials found on Lynn Seibel's computer," Christensen wrote. "After you have had an opportunity to review this, please phone me to discuss its content."

"Are we mandated to report that to the authorities?"

Stoneman emailed Christensen the following day.

"Had a chance to review to review the CD and am quite dismayed. It is fairly clear to me that there are several child porn/pose shots on their (sic)," he wrote. "Are we mandated to report that to the authorities?"

The answer, according to Christensen's testimony, was no.

Rather than turn over the CD and the report to police, Christensen sent a copy to Seibel's attorney, Richard Beens, on July 9, 2003. He included a printout of the contents of the CD. "I'll look forward to hearing from you after you have had a chance to review these materials with your client," Christensen wrote.

Beens told MPR News last week that he received the information, but never viewed the CD. He looked at the printout instead, he said, and it only contained images of adult pornography. He said he still has the CD in its original envelope.

For nearly a month after receiving the report, Stoneman weighed his options.

"Do we go to police or not?" he wrote in a notebook entry dated July 10.

Stoneman talked to Christensen, the school's attorney, on July 17, according to his notes, which included a reference to police followed by the words, "he said let's meet first."

In a memo to himself, written a few days later, Stoneman said "the school's attorney informed Seibel's attorney that we would be informing the police about the situation, and that we would need to know the names of the students to whom Seibel gave out the password and who allegedly used his computer."

However, no one called police.

In his note, Stoneman summarized the investigation into Seibel's computer. He wrote that the school had received a "CD-ROM of hundreds of the graphic images found that depicted nude men engaging in same-gender sex, nude children, some engaged in sex, others posing."

Seibel was "hypothesizing that students had been using the computer," he wrote.

He described a scenario that would allow Seibel to remain on campus:

"If (Seibel) chooses to be forthcoming because he has something to share about his involvement, the following will happen: He will be asked to step down from his position. He will be offered a chance to do some consulting work for a small stipend, with no student interaction. He will be allowed to remain in his house for the school year, but not allowed on other parts of the campus. His son will be able to attend for the remainder of the year."

Seibel "clearly demonstrates a tremendous amount of need for counseling," and the school "will need to look at whether or not to provide funding for an intervention service," he wrote.

Stoneman never implemented that plan. Instead, less than three weeks later, he signed a confidential separation agreement with Seibel on behalf of the school.

"I have long had a desire to return to acting and wish to now pursue this interest in the Minneapolis area."

In exchange for $12,500, a year of free tuition at Shattuck-St. Mary's for his son and four months of health insurance coverage, Seibel agreed to resign and "provide to Shattuck a mutually agreed upon letter of resignation."

As part of the agreement,"The parties agree that the contents of this letter of resignation will serve as the basis for any statements Shattuck makes concerning your resignation," it said. "The parties further agree that Shattuck may disseminate this letter as it sees fit."

Seibel's resignation letter didn't mention the child pornography that would later result in criminal charges.

Instead, it said: "I have determined that it would be in my best interest to resign my employment with Shattuck-St. Mary's School effective August 31, 2003. I have long had a desire to return to acting and wish to now pursue this interest in the Minneapolis area. I have thoroughly enjoyed my years at Shattuck-St. Mary's and wish you and the school all the best in future endeavors."

A few months later, Seibel applied for unemployment, and Shattuck-St. Mary's provided his resignation letter to the Minnesota Department of Economic Security, along with an explanation that Seibel had left his job "to return to acting."

Seibel, however, claimed to the state that he had left the school "on advice of my Doctor."

The state denied Seibel's unemployment request, and he left for Rhode Island a short while later.

A long-held secret comes out

The child pornography stayed secret for nine years, until a former student told a corrections worker about sexual abuse by Seibel, and the worker notified the Faribault Police Department.

Faribault Police detectives and state criminal investigators spent months locating other victims. They began to hear rumors of child pornography found on Seibel's computer.

Officers executed a search warrant at Shattuck-St. Mary's on Aug. 13, 2012, but didn't find any images. Stoneman wasn't at the school during the search, but he talked to a Faribault detective briefly on the phone that day.

During the call, Stoneman acknowledged that the school had found child pornography on Seibel's computer in 2003, but added, "The stuff he was searching on the computer wasn't graphic child pornography. 'It wasn't like molesting ten year olds,'" according to the police report.

Stoneman told police that Seibel claimed his son had searched for pornography on his computer, and that the school "'raised the stakes' and got him to 'blink first' by signing a separation agreement."

A week later, on Aug. 20, 2012, police interviewed Stoneman at Shattuck-St. Mary's, with Magarian, one of the attorneys from Dorsey and Whitney, in the room.

Stoneman told the officers that he had been instructed to have a Dorsey and Whitney attorney present for "any interaction with the police," according to an investigator's report summarizing the interview. The report doesn't name the person who allegedly gave Stoneman this advice. In a statement, the school denied that Stoneman made the remark.

Police asked about Stoneman's knowledge of the child pornography and why he didn't report it. Stoneman told police that the school's lawyers told him that the child pornography was "not an actionable, reportable offense," the report said.

Investigators then asked Stoneman whether anyone — including lawyers — had pressured him not to report the pornography to police.

Magarian, who said he was representing the school, was "continually interrupting" as officers repeated the question, the report said.

One of the investigators reminded Stoneman that Magarian didn't need to be in the room and that he could have his own attorney present.

"Stoneman at this point told police that he would like to reflect some on this interview and talk to his own attorney," the report said.

The session ended, and Stoneman wasn't interviewed again. Bohlen, the Faribault police chief, later said Magarian and Stoneman had cooperated fully during the investigation. In a statement, the school said no one had pressured Stoneman not to report the child pornography to police.

School 'acted swiftly and comprehensively'

The school faces three lawsuits filed by former students who say they were sexually abused by Seibel.

In a deposition taken last year as part of the litigation, Stoneman said he couldn't remember why he didn't immediately call police about the child pornography found on Seibel's computer.

"It would require complete conjecture on my part at this point in time," he said.

He said he couldn't recall reading the report or remember what it said or "what the images were visually." Stoneman also said he didn't know at the time that Seibel had been accused two years earlier of sexually abusing students. He didn't recall looking at Seibel's personnel file, either, he said.

He said he believes the school "acted swiftly and comprehensively" to address the problems with Seibel's computer.

When asked if he has learned anything from how he handled the Seibel case, Stoneman replied, "I would say institutionally our school is dramatically sophisticated in this area, probably more so than any other independent school in the country."