Fraud after fraud is associated with virtual charter schools, especially when they are created by entrepreneurs with the purpose of making money. They do make money, but they don’t educate students. Why do legislators and governors allow this scam to proliferate? Every educator should shout their outrage at the ripoffs, happening in state after state. Virtual charter schools are the epitome of “education reform” as hoax.
John Thompson of Oklahoma describes the Oklahoma scam here.
An Oklahoma State Bureau of Investigation affidavit alleges that Epic Charter Schools’ co-founders, David Chaney and Ben Harris, split at least $10 million in profits from 2013 to 2018. The Epic scandal offers some unique insights into both the for-profit charter’s culture and the nature of the school privatization movement, as well as the downsides of online instruction in an age of corporate school reform.
Chaney and Harris allegedly recruited “ghost students” from homeschools and sectarian, private schools “for the purpose of unlawfully diverting State Appropriated Funds to their own personal use.” Epic established a $800 to $1000 per student learning fund for students who were not on the State Department of Education (SDE) “conflict list,” meaning that they were not enrolled in a public school; the state would have known of the illegal dual enrollment had names appeared in both lists. Those students were known as “members of the $800 club,” and their supposed instructors were known as “straw teachers.”
Affidavit: Epic Charter Schools used ‘ghost students’ to embezzle state funds
The following are details that reveal crucial facts relevant to online charters across the nation.
First, the OSBI search warrant cited a case which apparently reveals intent to defraud. A convicted felon, identified as LDW, saw Epic as an opportunity for an “economic windfall.” LDW and her uncertified staff did not require students to work the hours required by the state to earn credit for a full school day. And then there was an interesting twist to the LDW story.
LDW’s research told her that dual enrollment was illegal. So, she converted her school into a“learning center” under the “Epic Model.” LDW made a “‘vague reference” and “implied” that she “‘may have” learned about the Epic model from the Epic website.” Apparently, she justified the acceptance of the $800 per student learning fund money not as “tuition,” but as “before and after care” and “tutoring fees.” Parents didn’t necessarily know or consent to the new model, but LDW sent a document entitled “General Assurance” to David Chaney asserting that she “was not doing anything ‘illegal.’”
The OSBI thus seems to be presenting the case that Epic was illegally draining money from the state, and that Chaney and Harris helped choreograph the illegalities.
Second, Epic’s state funding expanded dramatically, up to $112 million annually, as public schools endured huge budget cuts. Epic also used, or misused, the state’s charter conversion law to take over rural school districts through what one superintendent calls “predatory marketing,” using misleading advertising in “aggressive attempts to attract students and teachers from surrounding school districts even in the middle of the academic year.” And it planned to expand further. Epic had sought to take over the troubled Swink district, but that and the plan to expand in Texas and Arkansas have been put on hold.
Public School’s Switch to Charter Allows Epic to Operate Rural District
https://www.tulsaworld.com/news/local/education/southeastern-
Probe threatens Oklahoma virtual school expansion into Texas
So, Oklahoma was on the path towards even larger online charter scandals, such as in California, Ohio, Florida, and Indiana. And the investigation of the $180 million Florida school and the $40 Indiana fraud might be especially pertinent. It’s not just the way that their virtual school operators “shrug off blame.” More importantly, Florida and Indiana privatizers have the ears of many Oklahoma “reformers.”
Two Indiana virtual schools face swift closure as they shrug off blame for enrollment scandal
https://www.houstonchronicle.com/news/texas/article/Probe-threatens-Oklahoma-virtual-school-expansion-14277159.php
https://chalkbeat.org/posts/in/2019/07/25/two-indiana-virtual-schools-face-swift-closure-as-they-shrug-off-blame-for-enrollment-scandal/
And, third, that brings us to the Oklahoma Council for Public Affairs, Governor Stitt, and legislators who see choice as the panacea which could make Oklahoma a “Top Ten” state. Earlier this summer, the OCPA was bragging about the agenda they would push next year. It then touted Stitt’s support for vouchers and Florida’s education reform plan. In addition to claiming that reforming the state’s funding formula could produce transformative gains, it praised Indiana’s reforms. The OCPA’s claims that fixing Oklahoma’s imperfect but basically good funding formula could fix our schools on the cheap are completely divorced from reality.
https://www.ocpathink.org/post/a-next-generation-school-agenda-for-oklahoma
https://www.ocpathink.org/post/gov-stitt-are-we-done-absolutely-not
Oklahomans paying to educate ‘ghost students’ in numerous districts
Fourth, After Epic’s scandal became public, however, it’s taken alt truth to a new level. It first doubled-down on the politics of personalized vilification of educators and opponents.
Epic quickly replied to Jennifer Palmer’s journalism in Education Watch with insults but without facts. It claimed that the Oklahoma Watch article “implies that ALL Epic’s administrators are evil, skanky people hell bent on destruction of Oklahoma’s public education system.” Epic also argued that Palmer’s work linking such gamesmanship with incentives tied to accountability metrics is “more fiction than a Steven King novel.” They also called it “nefarious.”
After the OSBI’s search warrant was revealed, however, Epic’s responses have become completely bizarre. Whether you believe it needs some updating or not, Oklahoma’s funding formula is based on solid evidence and logic. But the OCPA and Sen. Gary Stanislawski, the Chair of the Senate Education Committee, say that the “weighted average” for funding different types of students in different grades is a system that funds “ghost students.” Equally absurd, the American Legislative Exchange Council, the OCPA, and Sen. Stanislawski claim that the “daily membership” formula funds “ghost students.” Worst of all, the Education Chair buys into the spin about Oklahoma’s formula, “It’s a legal way to rob other school districts.”
It must be stressed that the tactic of answering fact-based charges about “ghost students” with made-up attacks on solid, established funding systems for being schemes to fund made-up “ghost students” is not new and preceded the Oklahoma scandal. The OCPA drew on ALEC’s “Report Card on Education,” praising the way “Indiana Seizes the Hammer, Enacts Comprehensive Reform.” Not surprisingly, it promoted vouchers, charter expansion, undermining teachers’ rights, A-F Grade Cards, and “The Way of the Future: Digital Learning.” If the governor or legislative leaders would bother to follow the OCPA link to the 2012 ALEC report, they would learn that included no evidence that ghost students existed or that improvements resulted from their changes.
Fifth, in fact those “reforms” failed. During the four years after reforms were implemented, the four key tests on the reliable NAEP test scores showed gains of .25 points per year, meaning that student performance remained basically flat. Since they were supposed to be a civil rights campaign against the “low expectations” perpetrated by bad teachers, who were poorly trained and not held accountable by school systems, and defended by bad teachers unions, it is especially important to remember that Indiana’s economic achievement gap increased from 2013 to 2017.
NAEP State Profiles
NAEP State Profiles
Sixth, these alt facts lead to one of the worst aspects of ideology-driven, market-driven reform. Online charters like Epic inflict financial harm on schools. They help some students but hurt many more. Some of the worst damage, however, is inflicted on the principles of public education and our democracy.
Epic et.al have undermined public schools by slandering educators and education advocates. Their statistical and financial gamesmanship has been bad enough. It is their willingness to say anything and to falsely demonize opponents that has most corrupted our constitutional democracy. And that may be the saddest truth about the tragic results of the school privatization era.
Diane Ravitch's blog 
“Epic also used, or misused, the state’s charter conversion law to take over rural school districts through what one superintendent calls “predatory marketing,” using misleading advertising in “aggressive attempts to attract students and teachers from surrounding school districts even in the middle of the academic year.”
The online charters still do this in Ohio, despite the weak and unenforceable “reforms” that charter lobbyists drafted and passed into law.
No one seems to know how much public funding they spend on advertising, and no one seems to care. This is AFTER saw had the single largest fraud in the state’s history- the ECOT scandal. The students stay in the online school for a period of months, then transfer back to the public school- way behind and making it impossible for public schools to plan or budget. But no one cares about that either- existing public schools or public school students were not considered important enough to think about when the charter promotions were launched. If there’s collateral damage on public school students, who cares? Ed reformers aren’t interested.
“It is their willingness to say anything and to falsely demonize opponents that has most corrupted our constitutional democracy. And that may be the saddest truth about the tragic results of the school privatization era.”
Yes, this is when I started to realize why charters were so truly awful — years ago when I was listening to Eva Moskowitz making statements that were so patently misleading and intended to give a false view to the public and there was no reason to do so except to undermine public schools and promote herself.
I truly could not understand such reprehensible behavior at first and then I realized that the money coming in that enriched her came from people who expected her to say this. That was absolutely clear when Moskowitz seemed to make it her personal mission to run her one-woman public relations campaign to convince the Senate and the public that Betsy DeVos was a wonderful nominee for Secretary of Education and must be confirmed for the good of children everywhere.
The school privatization has empowered the worst people — those whose greeds means they value power and if they need to falsely demonize a child or an opponent or hurt an entire school of children, they will do it because they are more than willing to say anything as long as it gets them what they want. The truth does not matter to them and as we have seen in this country – when we empower people to whom the truth is subservient to their own desire for power and money, the system rots.
Oklahoma’s lax management of private charter schools allowed this egregious misuse of public funds to happen. Oklahoma is a state that faced teacher walkouts due to poor pay and large class sizes in its public schools. Oklahoma ranks 48th in per pupil spending, and it can ill afford to squander its public money on “ghost students” in virtual charter schools. The state is making frauds wealthy while its school buildings are falling apart and the text books are ancient. I remember seeing a photo of a student with a text that had been issued to country star Blake Shelton, and Shelton is forty-three years old.
Posted at https://www.opednews.com/Quicklink/An-EPIC-Case-of-Fraud-in-O-in-General_News-Charter-Schools_Education_Educational-Crisis_Financial-190820-995.html#comment742495 with comment that has links back to this blog.
With 15,880 separate school system in 50 states the snake oil sellers have pounced… stealing public money and undermining our INSTITUTION OF PUBLIC SCHOOLS. Coast to coast scams…
Take a look at the New Orleans charter Scam:Mercedes Schneider On NOLA Charter Chaos
California: “Inspire” Charter Chain Grows While Floundering The San Diego Union-Tribune featured a front-page top-of-the-fold story by Kristin Taketa about the deepening troubles of the “Inspire” charter chain, which is growing across the state despite academic and financial woes.
https://www.educationnext.org/education-exchange-putting-together-2019-education-next-poll/
I love the education next poll on “education” because it so perfectly describes ed reform.
It’s an “education poll” that goes out of its way to completely ignore public schools, and public school students.
I mean come on- let’s just all admit that this “movement” is nearly 100% devoted to charters and vouchers. It’s either completely irrelevant or downright harmful to 90% of students and families. They really could not make this more clear. The message to public school students and families is “we don’t care about you or your schools, we’re phasing you OUT, so please just get out of the way and be quiet while we privatize”
There are three issues in ed reform- charters, vouchers, and teachers unions. There are no public schools or public school students in the echo chamber. They are supposedly people who work full time on “education” but excluded 90% of students, families and schools and replaced them all with “teachers unions” as a kind of insane proxy that no one IN a public school uses.
I don’t discuss the EdNext poll because EdNext is such a biased source.
They promote charters and vouchers and high-stakes testing in every issue.
Citing their poll is like citing something Betsy DeVos says.
The poll claims that half of all those polled favored vouchers but in every referendum, vouchers lose by a solid 65%, even in red red Arizona.
You would think that educators might also confront the failure of voucher schools to provide a barely minimal education instead of a religious indoctrination.
But their funding depends on libertarian sources, and that explains their bias.
An “EPIC” fraud.
Ever notice the names of those charter schools? Marketing words not substance … FRAUD.
yes; what I have seen since earliest years of NCLB being forced into our low-income schools — so much (MUCH) marketing, so little substance
The key to stopping corporate education reform in its tracks, in all its guises, is to make all the reformers “real” ghosts.
An internet search of David Chaney/ Ben Harris photos, shows an array of all white faces.
Consider a juxtaposition- about one hundred years ago, a prosperous black community, informally named Black Wall Street was built in Oklahoma. The economic multiplier effect, local dollars spent locally, enabled the community to flourish. At the time, a dollar stayed almost a year in Greenwood, Oklahoma. In contrast, today, a dollar stays in a black community just 6 hours, the least of any demographic group.
School privatization compounds economic loss in black communities. Black Main Street is starved of funds when local schools are run by carpet bagging grifters who hire TFA employees instead of local community members who recirculate dollars in their own neighborhoods. Black Wall Street was destroyed in a riot led by a Ku Klux Klan, dominated by jobless WW I vets.
Bill Gates, Walton heirs and Charles and David Koch are smart enough to understand economic multiplier effect and what economic deprivation has historically created. The rest of us are smart enough to recognize greed. And, professors Wetts and Willer were smart enough to recently identify a politically influential group, “liberals with racial resentments”, who vote like conservatives.