Last year, two large online charter schools collapsed in Indiana at a cost of $86 million.

Now a new online charter has opened and hired some key employees of those that defrauded they public.

Last summer, as two large Indiana virtual charter schools collapsed under the weight of fraud allegations, a small new online program made its debut.

Indian Creek Online Academy was launched by a 2,000-student district south of Indianapolis experimenting with new ways of reaching students.

Officials with the Nineveh-Hensley-Jackson district said they wanted to avoid the mistakes of the troubled virtual schools. But they also picked an outside management company whose leader had a history with those very institutions, Indiana Virtual School and Indiana Virtual Pathways Academy.

Businessman Gar Hoover, the head of Indian Creek Online Academy’s management company, had previously served as chief operating officer for AlphaCom, a company accused in the $86 million alleged enrollment fraud and self-dealing scheme at the two virtual charter schools.

A state auditors’ investigation released earlier this month alleges that Hoover, who also served as a board member for Indiana Virtual School, signed off on a request for more than $96,000 in state funds based on inflated enrollment numbers. He’s listed as one of the parties personally responsible for repaying that amount, plus the cost of the auditors’ investigation.

A federal investigation has been launched into the fraud allegations. It is unclear whether Hoover’s role is included in the investigation.

Nineveh-Hensley-Jackson Superintendent Tim Edsell said he asked about Hoover’s history at Indiana Virtual School before the district contracted with his new company, American Online Education Services.

But Edsell wasn’t aware that Hoover was named in the state auditors’ investigation until contacted by Chalkbeat. After Chalkbeat sent him the state’s report, Edsell said he opened an internal investigation with the district’s legal counsel into Hoover’s connections to the virtual charter schools.

“I do have concerns,” Edsell said. “I want to be very thorough and comprehensive and accurate in our review.”

Edsell also didn’t know that Hoover had brought in a subcontractor with several other former employees from the web of companies paid millions in public dollars to operate virtual schools that served far fewer students than they received money for.