With the encouragement of the super lobbyists of the California CharterSchoolAssociation, the California Legislature continues to block any meaningful reform of its lax charter law, even as the news breaks that online charter operators were charged with scamming more than $50 million from taxpayers.
Peter Greene calls this one “a spectacular charter scam.” He is right. We have seen plenty of garden-variety scams and multi-Million dollar charter frauds, but this one is the biggest yet!
Morgan Cook and Kristin Taketa report in the San Diego Union-Tribune (a newspaper that supports charters):
Using in-depth knowledge of California education funding, charter school regulations and deceptive business disclosures, an Australian citizen and his partner in Long Beach orchestrated a multi-year conspiracy to fleece taxpayers out of more than $50 million, prosecutors say.
Sean McManus, 46, an Australian who operated charter schools in California, and another charter school operator, Jason Schrock, 44, and nine others were named as defendants in a 67-count indictment announced this past week by the San Diego County District Attorney’s Office.
Prosecutors say McManus, Schrock and others enrolled thousands of students into online charter schools, often without their knowledge, and collected millions in state funds using student information obtained from private schools and youth athletic groups.
This criminal enterprise funneled millions of taxpayer dollars into private bank accounts of the defendants,” said District Attorney Summer Stephan.
Eight of the 11 co-defendants have pleaded not guilty and denied the allegations. Two more are expected to be arraigned June 6….McManus is at large, possibly in Australia, prosecutors said. A San Diego Superior Court judge issued a $5-million bench warrant for his arrest and froze the accounts of charter schools, related companies and individuals related to the alleged conspiracy.
A reader who calls himself “Francisco” has commented recently that there are just as many frauds in public schools as in charter schools. Hey, Francisco, can you top this?
Peter Greene responds:
The twitterverse rebuttal has been, “Oh, yeah. You’re just focusing on charters. I’ll bet we could public school scams just as bad.” Maybe. But the oversight provided by a locally-elected board and mandated transparency of financial dealings would make it pretty damn hard. To pull off a scam of this magnitude, you need to wide-open barely-regulated low-oversight world of charters.
As Greene points out, in what world is it possible to buy and sell schools like franchises other than Charter World?
Diane Ravitch's blog 
The fraud is one thing. That fact that charter promoters in California are fighting any effort to properly regulate them is another:
“A lawyer for another defendant, Justin Schmitt, wrote in an email that his client did not intentionally engage in wrongdoing and charter school law is open to interpretation.
“Charter School Experts often cannot agree on the meaning of these regulations,” wrote Chuck LaBella. “The full facts demonstrate an absence of any intention by Mr. Schmitt to violate any law.”
The “regulations” are open to interpretation. Which is apparently what charter supporters want, since they refuse to change them. The opposition to regulation is IDEOLOGICAL. It’s a belief.
Maybe the lawyer has a point. Maybe California Charter Law does not specifically prohibit theft or embezzlement.
Or Maybe Justin Schmitt is a native German speaker so when he reads laws in English, he needs an interpreter.
I suppose the law is open to interpretation about whether it is OK to transfer millions to your personal accounts.
and especially wobbly law interpretation when you represent the side doing the skimming
Maybe he’ll get a prosecutor who can’t exonerate him…and, it will be left at that.
Has there been any Republican AG progress in Ohio on the charter operator charges?
I’d have to say that $50 million is just the tip of the iceberg
“Tip of the Iceberg”
The charterberg is deep
And lurks beneath the surface
The cost is very steep
And public should be nervous
While totally appalling, this case stands out as a case of district malfeasance as well not just lax oversight. The district superintendent and several district staff are also indicted and face jail time. This was a scam that hit across the board. Sad.
“A reader who calls himself ‘Francisco’ has commented recently that there are just as many frauds in public schools as in charter schools.”
Even with transparency in public schools, fraud does happen but nowhere on the scale it does in the publicly funded private sector charter schools and on-line voucher schools,
and the crooks in the public schools stealing public money are at a much higher risk of being caught by someone in the school district they are fleecing. That’s why it will not be easy to discover any crooks in the REAL public schools that get away with this kind of money.
For instance, because of the transparency that exists in REAL public school districts that have elected school boards, anyone can ask for copies of the financial books and find out where the money is going like the high school math teacher in the school district where I taught for thirty years who discovered a clerk who managed the money for student clubs had been stealing pennies here and there for decades to fund her expensive annual vacations to Las Vegas and Caribbean Cruises, but that clerk didn’t steal even a million dollars. It took her more than twenty years to steal about $90k, because of the transparency that makes it really risky to be a thief.
She was caught back in the late 1990s. I wonder if she is out of prison yet.
Even if it were true that there are just as many frauds in public schools as in charters, that would mean the rate of fraud in Charter schools is over 10 times that in public schools, given that charters make up less than ten percent of the total number of schools.
To match Ohio’s charter school fraud, public schools that collectively enrolled just 15,000 students would have to abscond with hundreds of millions of dollars.
I think the level of fraud in the voucher charter school industry is more than ten times what might exist in the real public schools. More like a hundred or a thousand times more.
That was based on the claim by Francisco that you quoted.
I have no idea if it’s true, but if it is, what I said follows logically.
So, at a bare minimum, it makes charters look at least 10x worse than public schools from the standpoint of fraud.
In other words, what Francisco saw as an exoneration of Charters ain’t an exoneration at all.
June 2-4—–Biden 27, Sanders 15, Warren 12, Harris 9, Buttigieg 10, O’Rourke 2, Booker 2, Klobuchar 1, de Blasio 2, Yang 1, Castro 0, Hickenlooper 1, Gabbard 1 economist/you gov…….two women progressives…Warren plus Harris at 21, 6 behind Biden. Add Bernie and it is 36-27—-Biden nine points behind the three leading progressives. Buttigieg seems closer to Biden on policy…..will the age factor become important?
I don’t know why DeBlasio is running. He could not be re-elected mayor.
When even “expert” statusticians (not misspelled) like Nate Silver can be way off in their poll based predictions just the day before an election (as they were in the case of Trump), it’s really no exaggeration to say that polls don’t mean diddly squat at this point.
There is ALWAYS uncertainty associated with every poll and at this point ,(this far ahead of the primary election) that uncertainty (effectively noise) is more than enough to completely swamp any signal that might (might) be there.
Reading polls this far out is no better than reading tea leaves or reading palms.