A judge in Berks County, Pennsylvania, ruled that a charter school’s property was not tax-exempt, prompted by some unusual financial arrangements.
Judge Madelyn S. Fudeman upheld a ruling by the Berks County Board of Assessment Appeals denying I-LEAD Inc. an exemption from property taxes.
The building at 401 Penn St., which houses the I-LEAD Charter School, is assessed at $9.7 million, according to Berks County property records.
The property was placed on Berks County’s September upset tax sale for four years of unpaid property taxes totaling $2.8 million; the unpaid years spanned 2014-17.
The property’s owner, I-LEAD Inc., Philadelphia, was ordered to pay a bond of $500,000 to be removed from the tax sale list, which it did in December…
In her ruling, Fudeman takes I-LEAD Inc. to task, saying it appears to be more of a for-profit operation.
She said the testimony of [CEO David ] Castro and Angel Figueroa, the charter school’s CEO and chief operating officer, “fell far short of establishing” the charter school operates at a loss.
In her ruling, Fudeman noted a revenue-sharing agreement between I-LEAD Charter School and Harcum College.
Harcum is a two-year college offering associate degree that operates from the same building as the charter school.
For every student that I-LEAD referred to Harcum College, I-LEAD would receive 40 percent of tuition and fees received by Harcum, the ruling states.
I-LEAD received more that $8.6 million from Harcum from July 2014 to June 2017…
Castro was paid over $195,000 for the most recent year and Figueroa was paid over $240,000 for the most recent year, court documents showed.
“The salaries paid to Mr. Castro and Mr. Figueroa appears more in line with a profit making institution than a truly charitable organization,” Fudeman said in the ruling.
Diane Ravitch's blog 
Charter Games
The jig is up
For charter sup
The cat is out
Without a doubt
The bet’s been called
And court’s appalled
With charter bluff
We’ve had enough
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For every student that I-LEAD referred to Harcum College, I-LEAD would receive 40 percent of tuition and fees received by Harcum, the ruling states.
Good lord. That’s a new one.
Pennsylvania is as bad or possibly worse than Ohio and Michigan in regulating charter schools. They must be hugely politically connected in that state because the state auditor has been screaming about it for years, issuing report after report and NOTHING happens. At least in Ohio they give lip service to regulating charters. You don’t even get that in Pennsylvania. It just…disappears.
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The corrupt legislature along with the heinous Corbett administration gave charters an overly generous compensation rate. Some districts have been teetering on the verge of collapse from charter drain. Most of the corrupt legislators are still in place refusing to change the rules because some of them personally profit from the arrangement.
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Judge Madelyn S. Fudeman got it right. This should be a red flag alert for other charter scams.
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Charters that extract profit from schools should be required to pay taxes on the money. We know that many such “non-profit” schools are still generating lots of profit for investors.
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