None of the perpetrators of the largest charter scam in history will serve a day in prison
The Voice of San Diego calls the A3 scam “one of the largest” scams in history but I don’t know of any that scored more taxpayer dollars than A3.
A poor person would get jail time for stealing $500 or a car. These guys stole hundreds of millions and they got home detention.
The story of the A3 online charter school empire is one of the largest charter school scandals in U.S. history. The scam had several angles, the most lucrative of which involved enrolling thousands of students who never took any classes, as Voice previously reported.
A3’s 19 online charter schools raked in roughly $400 million from the state between 2015 and 2019. Sean McManus and Jason Schrock, the ringleaders, funneled some $80 million of that money into companies they controlled. Nine other people – including key lieutenants, an accountant and two former superintendents – were also charged for playing a role in the scheme to steal public funds.
Despite such an unprecedented theft, not a single person involved in the A3 case will spend a day behind bars. McManus and Schrock were both sentenced to four years – but both have already been in ankle monitors, on home confinement. They both will get credit for time served. Several other key players had their felonies reduced to misdemeanors and two defendants essentially had their charges dropped for cooperating in the investigation…
Prosecutors weighed “multiple factors including accountability, restitution and early acceptance of guilt” in resolving the case, wrote Steve Walker, the spokesman, in an email.
Walker called the resolution of the case “just” and pointed to “the unprecedented return of more than $240 million from the hands of the defendants back to those it was originally intended for, helping K through 12 students in the state.”
The leaders of the A3 grift were Sean McManus and Jason Schrock.
McManus worked in the charter school industry for several years before he opened 19 online charter schools with Schrock. A3’s first school was authorized by Dehesa Elementary School District in East County. Dehesa only had around 150 students at the time. And yet McManus and Schrock’s school went onto enroll many thousands of students. That’s because an online charter school can draw students from the county it is located in, as well as each adjoining county.
The central component of the A3 scam involved enrolling students, who never actually took any classes, into A3 schools. To boost A3’s head count, enrollment workers would approach summer athletic programs. The enrollment workers would get each summer athlete to sign what’s known as a master agreement. That master agreement would un-enroll each student from their normal school and into an A3 school for the summer. For each summer student A3 brought in several thousand dollars. Schrock and McManus paid a commission to each of their enrollment workers and gave a so-called donation, based on the number of players that signed up, as an incentive to each athletic program.
Another part of the scam involved working with private schools. A3 would approach, for instance, a small Catholic school. The students at the school would be added to A3’s attendance rolls. The state’s public education system would dispense money to A3 for each of those students. A3 would then give some of that money to the private school – some of them were struggling financially – and pocket the rest.
McManus was charged with multiple crimes that added up to as many as 40 years in prison. In the end he pleaded guilty to two counts of conspiracy to steal public funds and was sentenced to four years in state prison. He waived his rights to any revenue connected to the charter schools or any connected business, paid roughly $19 million in fines and had his 401(k) seized…
Schrock calls himself an “Educational Business Leader” on his LinkedIn profile. He lists himself as CEO of Learning Re: Defined, “a Christian company of educational leaders and program developers who cultivate and provide training modules and curriculum built to meet client needs,” according to the company’s Facebook page.
Schrock, who also faced multiple charges with a maximum penalty of roughly 40 years in prison, pleaded guilty to one count of conspiracy and one charge of breaking state conflict of interest laws. He spent 1,506 days in an ankle monitor and was credited with time served. He also paid roughly $19 million in fines and will also serve three years probation.
The article describes the other leaders of the scheme. Open the link and read about them.
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“Walker called the resolution of the case “just” and pointed to “the unprecedented return of more than $240 million from the hands of the defendants back to those it was originally intended for, helping K through 12 students in the state.”
Wow. How magnanimous of the thieves.
They returned 60% of the money they stole.
They should not only not get prison time but should get an award for honesty , integrity and philanthropy.
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Schrock calls himself an “Educational Business Leader” on his LinkedIn profile. He lists himself as CEO of Learning Re: Defined, “a Christian company of educational leaders…”
Well, that explains it. He’s a “Christian criminal” who has confessed his sins and now surely deserves forgiveness.
Who are the prosecutors — mere, unworthy mortals — to subvert God’s will?
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I’m sure Jesus would probably turn the other bank account (over to the criminals)
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What would Jesus do?
Turn the other bank account
Over to the thief
Criminal, without a doubt
Is worthy of reprieve
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Jesus drove the ancient equivalent out of the temple
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It was a joke, of course.
Incidentally, if Jesus turned the other cheek, why didn’t he turn the other bank account?
Wouldn’t that have been the consistent thing to do?
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Maybe he could turn the other bank account into wine
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“Jason Schrock…Christian company of educational leaders…”
Big shout out to Bill Gates for his policies which when implemented made it possible.
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Billie Gates–the grift that keeps on grifting
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Evidently, “cultivating” training modules and curricula requires a lot of, uh, fertilizer.
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Where’s the rest of the money? Also, I think they shouldn’t be allowed to work in education in any way going forward. Convicted pedophiles cannot be around children, disbarred lawyers cannot practice law again, etc.
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Good idea- In 1990, Michael Milkin was permanently barred from the securities industry. (Trump pardoned him in 2020.)
The Milken family (his brother) is involved in the education sector.
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Like many Wall Streeters, Milken is a fan of performance based teacher compensation. IMO, wealthy financiers view labor as a factor of production whose behavior can be modified like rats in a maze. The students don’t figure into their equation anymore than the output if it was a roll of toilet paper.
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Yeah, he was barred from Wall Street, undoubtedly one of the most corrupt sectors of the economy, but not from education.
Literally loosing the wolves on the sheep.
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if only
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This is so cool! Now folks will be incentivized to steal hundreds of millions of dollars knowing that as long as they return most of it and can “only” keep a mere $100 million, they can avoid jail and spend the rest of their lives enjoying their riches. Even if they return all but $20 million, it’s a nice nest egg for the rest of their lives for a couple years of work doing what the ed reformers love them to do.
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Sean McManus identified himself as “Joseph McManus” when he and his gang previously used weaknesses in Ohio’s charter school laws to try to open “blended learning” STEAM charter schools in Cincinnati, Columbus, Dayton and Cleveland, Ohio using the California Prep email address. https://networkforpubliceducation.org/california-charters-gone-wild-part-3-for-profits-find-a-way-to-cash-in/ Ohio’s charter school policies continue to be extremely weak, so Ohioans need to be on the lookout for Sean… or Joseph… or whatever he calls himself these days.
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Ohio welcomes charter grifters.
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As the ‘Grifter Queen Helmsley’ said, “Taxes are for the Little People”. She might just as well have said, “Laws are for the Little People” because the ‘rich’ seldom need to obey them. AND, they can also modify them by buying politicians that make the law, so …?
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Or buying officials of the court — ie, kickbacks for lenient sentences.
We fool ourselves into believing that this never happens in America, but there are a lot of unaccounted for millions in this case. Where did they go if not into pocketses?
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What has it got in it’s pocketses?
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Yet, if a public school teacher or administrator is caught changing student answers on a standardized test, they may end up serving year in prison — unless he/she was Michelle Rhee who never was tried for her alleged changing of answers on standardized tests, because Rhee was an alleged member of the Destroy Public Education Crime Syndicate and also had the support of the Fascist Republican Party and neo-liberals in the Democratic Party.
“Michelle Rhee’s Cheating Scandal: School Test Score Irregularities”
https://www.thedailybeast.com/michelle-rhees-cheating-scandal-school-test-score-irregularities
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$$$$ = Justice!
And the taxpayers are supplying those $$$$ for the defendants, already paid in the scam.
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Did they bring In Merrick Garland to handle this?
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At least they returned the money they ripped off that didn’t go to paying for teachers and supporting personnel. They didn’t, however, return the profits off the money they surely made while they had it, and they cannot return the use of that money while they had it. That’s what jail sentences would have been for, but they didn’t go to jail. They just had to quarantine like the rest of us did!
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“At least they returned the money they ripped off that didn’t go to paying for teachers and supporting personnel.”
Did they?
How do you know that?
Sorry, but I don’t believe it for a second.
$160 million is a lot of money for “teachers and supporting personnel”.
These scammers always have ways of skimming money (setting up ho!ding companies that charge the charters exorbitant rents and the like).
The punishment was clearly woefully inadequate.
The fact that they got no jail time really raises a question of whether the “audit” might also have been woefully inadequate.
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And it IS California government.
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In fact, there was no punishment to speak of.
Returning part of the millions that they stole is certainly not punishment, no matter how much the prosecution wants the public to believe it is.
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Yep. As the song says, “There’s nothing surer…”
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Disgusting that these people got rich off of taxpayer money and get essentially no penalty. People with tiny bits of drugs or who shoplift get more jail time. Our “justice” system is a joke.
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I’m sure you are right. So, what do we do about it?
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Overstated IMHO.
Would a poor person be jailed for stealing $500? I’d like to see some backup on that claim. It’s petty theft, a misdemeanor. This seems like an appeal to Les Miz fans, dredging up Jean Valjean and the theft of bread, pre-FrRevWar. If what we are trying to say here is, we think white-collar crimes deserve harsher penalties, just say it. Under current law, this scale of felony conspiracy to defraud the govt gets you up to 5 yrs in jail plus hefty fines. If you can also return more than half of the defrauded $ plus provide a bunch of documentation/ input to indict others, maybe you get ankle-monitored home confinement instead of jail.
Do we really just want to clap them in jail? The facts are, white-collar criminals do not present threat of violence to the public, hence they get easier stuff, like paying back what they stole, plus fines, plus home confinement with ankle-monitors [plus of course losing their reputations/ future biz like any felon]. That’s cuz it costs the state tens of thousands of dollars a year to house people in jail [in 2015 the number was $65k/yr], & there’s little room at the inn. [And nearly everyone gets credit for time served.]
Taxpayers were fleeced of $400million. Schrock & McManus were each fined $18.75 million in fines, which they paid, and then some: Schrock handed over “hundreds of millions” in assets as well as 1000s of pp of docts to help the investigation. No data on what McManus handed over, but he cooperated as well; a total of $220million was recovered as a result of their cooperation. Both have been on home confinement with ankle monitors for two years [since 2019 – Schrock in CA, McManus in Australia]. Schrock will serve another 2 yrs that way per 2021 sentence. [No info as yet on whether McManus sentence is same].
Meanwhile their cooperation helped round up another 7 defendents who have pleaded guilty, & prosecutors continue to pursue school districts who were supposed to hold the A3 schools accountable and private vendors who received public school dollars from A3 schools to act like schools for A3; litigation is pending.
Seems to me the justice system worked just fine.
What pushes my buttons on this type of case is that it’s very clear CA charter laws—like those of so many states– invited fraud on a massive scale, and that’s exactly what they got. As we know, this is hardly the only taxpayer ripoff occurring under CA charter law over decades– just the biggest. Think about all the govt palms that were greased to keep that game going for so many years.
It remains to be seen whether CA charter reform (Senate bill 126 passed in 2019) is being properly enforced & doing the job to curb charter school fraud.
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Well, the punishment certainly doesn’t fill any role as a deterrent to others. Nothing ventured, nothing gained.
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‘White collar” criminals actually kill people. They do it by driving starving people to rob stores and shoot people. The consequences of ‘white collar crime’ are HUGE, worse than simple thievery (a felony). They steal from the entire country, driving more and more people into desperation.
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Daedalus-
You’re right. Thanks for saying it.
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White-collar criminals are taking advantage of the lax/ barely-enforced laws of a corrupt govt. One admin puts in laws to make it look like they’re addressing a problem, the next one winks, nods, & cuts the funding to enforce them. State govts are riddled with interest-conflicted thieves profiting from who they appoint and what they direct to be purchased by state agencies. The fish rots from the head down: we have merely to look at the scores of elected officials who enter the Congress middle or upper-middle class and emerge years later with many millions in assets. Not to mention the over-the-top nepotism and profit-making from govt position practiced by TFG & family.
They’re all white-collar thieves. Who is worse: the Schrocks and McManuses, or the cynical govt officials who set the public up to get robbed by them? Who is “driving starving people to rob stores and shoot people, stealing from the entire country, driving more and more people into desperation?” Come on, Daedalus. I think we know who and what they are. They’re either running the country outright, or running it from behind the curtain.
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Absloutely correct. They say, “A fish rots from the head down”.
However, in our case the only hope is for the tail to start wagging the head.
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It’s really upsetting to see the flawed legal system that gives fraudulent edu deformers who deserve years of imprisonment for felony getting lighter sentence. US justice system is willing to give corporatists and grifters lenient treatment while penalizing those like Seteven Donzinger for standing up to the big corporate bully over criminal malfeasance and sham trial.
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Yes- many bemoan the cost of incarceration when its meted out to the rich (see above comment) but, the prohibitive cost of incarcerating the Atlanta teachers was never discussed.
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Well, that’s because it costs far less to incarcerate poor people than rich.
You can give the poor folks barely beef stew instead of steak for dinner and they won’t complain.
Can you imagine being a prison guard and having to listen to a wealthy person whining every day about the accommodations at Club California? It would be enough to drive you insane.
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That’s undoubtedly why the Florida system let Jeffrey Epstein out every day (allowing him to continue raping young girls even while he was serving his jail sentence)– so they wouldn’t have to provide him with very expensive caviar and wine.
The state of Florida must have saved a boatload of money with the very creative arrangement. Other states should really take note.
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And, Epstein either committed suicide when he was denied his privileges, or he was murdered when he began to use leverage to get those privileges.
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Linda,
Cellmates had been removed. The surveillance camera in his halway and cell ‘malfunctioned’. C’mon. He was murdered.
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I don’t think we will ever know what happened to Epstein. Two guards were assigned to watch him. He knew too much about powerful people.
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Loose ends make for noose ends.
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Three loose ends but only two noose ends — so far.
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Thanks for the heads-up on the Donziger case, Ken, I knew little about it & had to get up to speed. Good lord. Shows the extent to which our justice system can be turned on its head when a corporate giant like Chevron snaps its fingers– makes us look like Russia. Complete travesty of justice on several counts. Judges Kaplan and Preska should be defrocked & disbarred.
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Stopping by Courts on a Snowy Evening (with sincere apologies to the Master)
Whose courts these are
I think I know
His wealth is in the Caymans, though
He will not see me stopping here
To see his lawyer do a show
My little child must think it queer
That money makes the difference here
Between the wealthy and the poor
The darkest depths of “justice” dear
They give their bank accounts a shake
To pay the lawyers for the fake
The only other sounds the weep
Of indigent , without a cake
The courts are Lawley, dark and deep
But they have promises to keep
And fines to impose before they sleep
And fines to impose before they sleep
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