Will Huntsberry of the Voice of San Diego reports that all the online charters connected to the biggest charter fraud in U.S. history will close.
Huntsberry writes:
An online charter school empire whose leaders have been charged with enrolling fake students and misappropriating $80 million in public funds will be forced to close all of its schools across California.
In May, the San Diego district attorney’s office charged 11 people in a corruption scandal of historic proportions. Prosecutors say Sean McManus and Jason Schrock, who operated A3 Education, were the ringleaders of the operation. Several who worked with McManus and Schrock have also been charged with crimes, including the superintendent of the Dehesa School District in San Diego County.
At its peak, A3 operated 19 online schools across the state, including three in San Diego, according to investigators. One closed before the charges were filed. And two more – one in San Diego and another in Los Angeles – were slated to close. But now a court-appointed receiver has decided to shutter all of the remaining schools.
Students’ records at each of the closing schools will be transferred to their school district of residence by Sept. 30, according to a letter obtained by the Marin Independent Journal, which was sent out to districts associated with the A3 schools. Richard Kipperman, the court-appointed receiver, confirmed to Voice of San Diego that all the schools will close.
How the Scam Worked
Prosecutors painted an intricate picture of a complex organization that managed to turn student records into giant sums of cash. A3 Education enrolled many students who took actual classes, but it also enrolled many students who never did any schoolwork, prosecutors say.
Most of the fake students were participants in summer athletic programs, according to the indictment. Enrollment workers would approach a football program, for instance, and offer as little as $25 a head for each player’s records. The enrollment worker would also get a commission on however many students he or she enrolled. The rest of the money – which totaled in the thousands of dollars for each student – went to companies controlled by McManus and Schrock.
In one instance, Luiz Rigney, an enrollment worker, carried several suitcases of student paperwork, worth roughly $5 million, to one of A3’s offices. Rigney had been asked to backdate that paperwork so A3 could get maximum profit, prosecutors say.
In another instance, two workers texted each other back and forth about the large sums of cash flowing through the company: “I had the weirdest dream last night! One was about us growing all Sean’s schools. I was running all the Facebook campaigns and you were running around my office drinking champagne throwing money everywhere yelling I love bonuses,” the texts read, according to court documents.
Diane Ravitch's blog 
This crooked charter chain should be required to make restitution to the public schools they robbed with phantom students and other illegal manipulations. Somebody should file a lawsuit against A3 on behalf of the students of San Diego and elsewhere to send a message to the fraudsters.
Finally, the virtual charters are being exposed for what they are. The CA Dept. of Education lists approx. 24,000 students enrolled in A3 schools and that translates to approx. $250,000,000 in state funding last year alone. And there are many other virtual chains operating in California. Learn4Life and Options for Youth/Opportunities for Learning also operate in many CA counties. So far, there has been no effort to curb their growth or demand close scrutiny. It’s basically a case of “the fox watching the henhouse” with small districts authorizing these charters for no other purpose than collect oversight and service fees. No wonder none of the A3 charters were revoked. Their authorizing districts did not have qualified staff to carry out a revocation but also, the only incentive in play was to keep them open, especially since the students enrolled in these charters did not necessarily reside with that district.
Look at what Ohio’s voucher lobby slipped into the last Ohio they wrote:
“For example, consider the changes made to voucher policy. In Ohio, the private school choice sector is big and complicated. The state has five separate programs that serve thousands of students. Most of these changes didn’t enter the budget picture until late in the game, when the Senate added a massive and needed expansion of income-based EdChoice, the program that offers state-funded scholarships to low-income students. The majority of their additions made it into the final cut of the law.
Thanks to the budget, these testing related provisions are about to change. Now, private schools that enroll voucher students will have the option to administer an alternative standardized assessment instead of the state exams given to public school students in grades 3–8. This change covers schools that must test individual voucher students, as well as those that are required to test all students because they meet the 65 percent threshold. Schools will still be required to report the results to ODE, and the department’s compilation and aggregation duties appear to be the same.”
They exempted private schools from the tests they mandate every public school student take.
Public school students in Ohio are forced to sit for every test ed reformers dream up, market and then sell, but they exempted voucher students from all of it.
This will also be really helpful to them, because it will be impossible to compare test scores of voucher schools versus public schools, which is what they want.
If publicly funded private school students don’t have to be subjected to ed reform’s data collection regime, public school students shouldn’t be subjected to it either.
The people that cheerlead testing in your child’s public school? They exempt the schools they prefer from this requirement.
They’re setting up two tiers of schools – the (preferred) charter and private school system, and the disfavored public system. Public school students are treated as second class citizens.
When ed reformers issue the pre-written celebratory missives proclaiming the superiority of their (preferred) voucher schools, will they reveal that the voucher schools got a special exemption from testing slipped into the state budget, so can’t be compared to the public schools on test scores?
Or will they just leave that “data” out?
Boy, for people who are so arrogantly convinced of the superiority of private schools over public schools they sure go out of their way to avoid meaningful comparisons. It’s almost like the ideological goals are far more important than the educational goals.
They’re shutting down A3. Shut ‘em down! All of them! When all those students come back to our public school classrooms, it will be such a joy. Welcome back to school, real school, everyone! Yes, yes, yes.
When reading anything from the Voice of San Diego it is important to know they are VERY pro charter school. One founder finances pro-charter school board candidates and contributes to many charter school causes — and a major donor is the founder of the High Tech chain (a former CEO of this chain is now the head of CCSA). They have a ton of charter school advertisers and even hold forums featuring pro-charter people. Everything they publish about education has a subtext and needs to be viewed through that lens. My guess is that they’re publishing this as a way to help distinguish between the “good” charter schools and the “bad” charter schools. This is the narrative that CCSA is trying to push as well — that these virtual charter schools do not represent the industry. These virtual/part homeschool charters may be more of a scam than your average brick and mortar charter school, but it is simply a matter of degree. They’re really not so different.
Hi Diane–
This one hits home as McManus was involved with installation of a charter authorized in a different county into our district area.
Related, can you alert your California audience about the following, and spend just 5 minutes to make 2 short calls to remove charter industry pushed amendments to AB 1505. Info below.
Thank you for championing local democratic control of our public schools with your support of AB 1505, which passed the Assembly in May. Right now the charter industry is pushing hard to try to gut this critically important bill. It is currently being amended by the Governor and the Chair of the Senate Appropriations Committee in response to this pressure so we have to tell them to pass this bill WITHOUT AMENDMENT.
Call Governor Newsom at (916) 445-2841
Call Senator Anthony J. Portantino at (916) 651-4025
We recommend you say something like:I urge you to support local control and accountability of our public schools. Please help democratically controlled public schools survive. Vote YES on AB 1505–WITHOUT AMENDMENT.Please make this call immediately as Friday is the deadline for whether this bill will survive or be killed.Thank you!— Educators for Democratic Schools and Wellstone Democratic Club Education Committee