The Network for Public Education has a Twitter handle called #anotherdayanothercharterscandal, and it is hard to keep up with them. It used to be one or two a week, Carol Burris told me, now it is one or two every day.
Here is only one among many, involving a charter scam that stretched from Ohio to Florida, ripping off taxpayers in both states.
Ohio’s top public accountant is actively investigating the case of two businessmen accused of using charter schools to defraud Florida taxpayers, students and schools — and maybe here, too.
On Friday, Ohio Auditor Dave Yost acknowledged that a probe has been ongoing for a year. Meanwhile, court documents filed this month in Florida indicate 19 Ohio charter schools were overbilled nearly $600,000. Prosecutors and forensic accountants say the money was laundered through 150 bank accounts and shell companies then returned as “rebates” and “kickbacks” to Marcus May, who once ran more than 20 charter schools in Ohio.
In 2012, May used a parent company, Newpoint Education Partners LLC., to open Cambridge Education Group, a charter school operator based in Akron. To grow business in Florida, authorities say he “falsely represented” that his Ohio schools were well managed. By 2016, prosecutors say he allegedly defrauded Florida and its public schools of more than $1 million.
May has repeatedly declined to speak with the Beacon Journal.
The pattern in Florida seems to mirror transactions in Ohio.
One forensic document in the Florida case details how Ohio schools paid $1.1 million to Apex Learning, a Seattle-based company May used to bill the 19 Cambridge schools in Ohio and 15 Newpoint schools in Florida for online and hard-copy curriculum. Russ Edgar, the lead Florida prosecutor in the white collar criminal case against May, has produced invoices that show how Apex inflated pricing to siphon $229,756.57 from Florida’s education system and $456,551.92 from Ohio schools, including four in Akron.
“After the allegations in Florida came to light, Marcus May was immediately relieved of any managerial duties and later of his equity in Cambridge,” John Stack, co-owner of Cambridge, said in a written statement. He said Cambridge hired a forensic accountant to find out if Apex negatively impacted any Ohio schools. Once the schools were identified, the money was returned.
Stack said he no longer owns a stake in Cambridge. He did not say who does owns the company now.
Of the 18 Cambridge schools still open in Ohio, 13 signed new management contracts this summer with Oakmont Education. Stack founded the company with Marty Erbaugh, an investment banker from Hudson. Oakmont will take over Cambridge’s dropout recovery high schools for struggling teenagers and young adults.
“Oakmont doesn’t believe that any of the schools we manage were negatively affected by Marcus May’s actions or Cambridge’s management,” said Stack, who filed the paperwork to create Oakmont on March 20, four days after a Florida jury convicted one of May’s associates.
How reassuring to know that the charter schools are now in the hands of an investment banker. Don’t you feel better already?
Another day, another charter scandal.
What is this, Right to Scam?
good one
Here is an August 8, 2018 effort to unravel the shell game in Ohio.
https://www.ohio.com/akron/news/local/closed-charter-school-is-sued-as-better-options-evade-displaced-students
Yost…..he sure is putting the screws to the Charter scam after all these years. Funny, isn’t he running for some office in Ohio? Always a motive to move up the food chain. The rats are fleeing the sinking ship.
Investigators should look into how charter operators are transferring public education funds collected in one state to use for operations or expansion in another state.
I think the public would really be interested in that, because the assumption is if you’re paying state taxes in Ohio those funds are going to Ohio students in Ohio schools – not to Florida students in Florida schools or to fund expansion efforts by charter chains or charter managers.
Charter chains really are different than traditional public schools. Cleveland Public Schools can’t open a franchise in Pittsburgh, but Cleveland charter chains can. Can they also transfer funds from school to school or, alternately, use a charter management org to transfer those funds?
This really needs to be explored because I don’t think the public understands the interstate and sometimes national nature of these contractors.
We need MUCH more information on charters- how they run, where the money goes, who is paid what. We don’t have enough basic information ON OPERATIONS and FINANCING to even make a decision. There is now a whole satellite of business around charters in Ohio-management companies, lawyers, accountants, consultants.
All of this money is coming from public funding of public schools- every penny. The public has no earthly idea where it’s going or even if it’s going to OHIO schools.
Graft.
There are too many opportunities to cook the books. Transferring public money from one state to another should be prohibited.
I don’t think the State of Ohio wants to regulate charter schools but even if they DID want to regulate charter schools they cannot do it properly from the state level.
There was a reason school were governed locally and it wasn’t sentimental – it was practical. There are too many schools in too many locations over too big an area to regulate each one from the state level.
The charter governance system doesn’t work and it will never work. It’s a bad design. It’s bad government.
Good gawd.
Posted it at: https://www.opednews.com/Quicklink/Ohio–Florida-Charter-Sc-in-General_News-Charter-School-Failure_Charter-Schools_Diane-Ravitch_Ohio-Politics-180903-184.html#comment710613
I think this list might be up-to-date
CHARTER SCHOOL SCANDALS
“A compilation of news articles about charter schools which have been charged with, or are highly suspected of, tampering with admissions, grades, attendance and testing; misuse of funds and embezzlement; engaging in nepotism and conflicts of interest; engaging in complicated and shady real estate deals; and/or have been engaging in other questionable, unethical, borderline-legal, or illegal activities. This is also a record of charter school instability and other unsavory tidbits.”
http://charterschoolscandals.blogspot.com/
Thanks for the link, Lloyd!
What might be useful is a ” Charterscameter” which keeps a running tally of the total cost in dollars of all the charter scandals to date..
Given that just one online charter school in Ohio (ECOT) scammed the public out of hundreds of millions of dollars, the Charterscameter is certainly well into the $billions by now.
Every time there is another scandal, simply update the meter with the dollar cost.
You could also graph the Charterscameter reading over time which would show the trend.