Eleven People, Including a Superintendent, Indicted in Charter School Finance Scheme
Eleven people associated with a network of online charter schools in Southern California have been indicted on charges of conspiracy, misuse of public funds, grand theft, and financial conflict of interest.
Prosecutors allege that Newport Beach-based A3 Education set up phony institutions and then “enrolled” thousands of students who never actually attained services.
“A3 Education recruited small public school districts to sponsor the charter schools in exchange for oversight fees. Prosecutors say A3 enrolled about 40,000 students throughout the state, none of whom received any services," KTLA news reports.
“The company that operated a network of 19 online-only schools is accused of paying sports leagues as little as $25 a student for information used for enrollment. School districts are funded by the state based on the number of students.”
The firm’s officers allegedly stole more than $50 million from the state, siphoning the funds off into their personal bank accounts.
In addition to A3 chairman Sean McManus and its president Jason Schrock, the scandal has ensnared Dehesa Elementary School District Superintendent Nancy Hauer.
In a statement, the Dehesa district said the following:
“The Board of Education was stunned to learn about the charges, and we have engaged legal counsel to review this matter and any possible implications for district operations.”
The indictments come at a time of increased scrutiny of charter schools. The California Charter Schools Association says A3 is a single bad apple – and one which it warned about over a year ago.
Read more about the allegations in the 235-page indictment.