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.