Archives for category: Fraud

 

Peter Greene writes here about Betsy DeVos’s recent decision to roll back Obama-era regulations intended to protect students against predatory for-profit colleges. 

Sadly, this is what we have come to expect from a Secretary of Education who is more interested in protecting the free market than protecting students against fraud.

Greene writes that DeVos rolled back

the Obama-era requirement that such schools either show that their graduates actually land jobs, or the school would lose access to all that sweet sweet federal money. That was a powerful piece of leverage, because the for-profit colleges focus on veterans and poor folks with the result that a great deal of the for profit college revenue stream comes from the feds, who loan to the students and pay off the schools, guaranteeing that the for-profits get paid and that the students are in hock to the feds.

Rolling back Obama-era protections is problematic because the Obama administration itself did a super-lousy job of riding herd on these predatory schools. At one point, having announced that they were now by golly going to clamp down those outfits, they turned around and bailed out one of the worst. Then, when that outfit collapsed anyway, the feds let them be sold off to a debt-collection agency.

It was after all that foolishness that the administration finally implemented a gainful employment rule. This was also followed by  students scammed by the for-profit agitating to be released from their debts. The Department of Justice requested that the Department of Education simply release the portion of that debt that they held; they refused.

All of that happened before Trump ever descended the escalator to unleash havoc on US politics; it’s only fair to note that this is, in many ways, a mess that DeVos inherited and which the Obama administration never exactly showed signs of fixing.

Last week, DeVos was sued–again–by a boatload of students stranded in massive debt. The student position is that they were defrauded and their loans should be forgiven.

DeVos’s position about loan forgiveness has been to simply pretend to lose all the paperwork and never process any of the requests to have loans erased. Having ignored the rules for two years, DeVos last year tried to get rid of them, and this week she finally did it.

Hundreds of thousands of students who were defrauded by predatory for-profit colleges are on their own. Shameful.

 

Back in March 2019, Carol Burris and Jeff Bryant released a study of the federal Charter Schools Program on behalf of the Network for Public Education.. That study, “Asleep at the Wheel,” found that about a third of the charters that received federal grants in the $440 million program either never opened or closed soon after opening. The amount of money wasted was about $1 billion over several years. The Department of Education failed to monitor wherevthe Money was going and how it was spent.

Burris has been analyzing states that received federal charter money and has concluded that the initial estimates were understated. In the states she has reviewed, 40% of the charters were failures. Some had no name. Some were not even charters.

The extent of waste, fraud, and abuse in the federal CSP is appalling, as is the ED department’s failure to pay attention to where the money goes.

The initial impulse for the CSP, created during the Clinton administration, was to jumpstart innovation. Now, it is a slush fund for Friends of Betsy and a ready supplier of millions to big corporate charter chains like KIPP (which recently got a federal check for $86 million) and IDEA (which has collected $225 million in two years). Neither of these corporate behemoths are start-ups. Neither is needy.

Congress should eliminate the federal Charter Schools Program. It feels no need, other than greed.

Next time you meet a candidate at a town hall, ask him or her if they will pledge to eliminate this wasteful slush fund.

Bill Phillis writes about Ohio’s connection to the biggest charter school heist in history (so far):

 

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More about the STEAM charters that have connections with the individuals indicted in California for an $80 million charter fraud
Five STEAM charters were “licensed” to operate in Ohio. Two of them, sponsored by Ohio Council of Community Schools, closed after a short period (2 years for one and 4 years for the other.)
Three STEAM charters are still in business as follows:
·       STEAM Academy of Warrensville Heights sponsored by Ohio Council of Community Schools
·       STEAM Academy of Akron sponsored by the Buckeye Community Hope Foundation
·       STEAM Academy of Warren sponsored by the Ohio Department of Education
Three of 11 individuals indicted in California for an $80 million charter fraud case have direct connections to the STEAM charter business enterprise in Ohio.
Other Ohio charter operations have been connected to charter operators indicted in other states. Several months ago some charter operators indicted for charter fraud in Florida had Ohio charter connections. The deregulated charter environment attracts people that relish the possibility of a quick buck.
The Ohio Department of Education and the two other sponsors should initiate an investigation into the operation of STEAM charters in Ohio.
William L. Phillis | Ohio Coalition for Equity & Adequacy of School Funding | 614.228.6540ohioeanda@sbcglobal.net| www.ohiocoalition.org
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Ohio experienced the collapse of ECOT (Electronic Classroom of Tomorrow) earlier this year, wasting hundreds of millions of dollars meant for instruction.

California recently indicted 11 people in the theft of more than $50 million connected to online charter schools, padding their enrollments with ghost students.

Bill Phillis of Ohio has a suggestion.

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No reason for online charters to be paid as much per student as brick and mortar schools
The charter industry is replete with concepts, conditions and practices that defy logic. A really bizarre practice in Ohio is funding online charters on the same basis as brick and mortar schools.
Online charters are cash cows for companies like the defunct ECOT, K12 Inc., etc. Online charters don’t typically provide such programs and services as:
·       Transportation
·       Facilities
·       Food service
·       Athletics and co-curricular activities
·   Variety of school personnel such as librarians, nurses, social workers, etc.
There are no state standards regarding teacher/student ratios for online charters. Reports from former online charter employees indicate some online teachers have up to 200 students.
Some Ohio public officials have expressed serious concerns about the funding formula for online charters, but efforts to address the matter have been ignored and/or delayed. Until Ohio officials figure out how to fund online charters, the amount paid to these charters should be cut in half. School expenditure data collected by the Ohio Department of Education could be analyzed to demonstrate the need to reduce per student funding to online charters.
William L. Phillis | Ohio Coalition for Equity & Adequacy of School Funding | 614.228.6540ohioeanda@sbcglobal.net| www.ohiocoalition.org
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Karen Francisco, editorial page editor of the Fort Wayne Journal-Gazette, is a great defender of democracy, honesty, and public schools. She is a keen observer of the school choice hustle in Indiana, where grifters and entrepreneurs are welcome to rip off the public. Thanks, Former Governor’s Mitch Daniels and Mike Pence, and compliant legislators.

In this editorial, she explains how charter schools and voucher schools evade accountability. One neat gimmick is to change the name of a failing choice School, and the clock gets reset. Presto, Change-O.

She begins:

When Horizon Christian Academy produced some of the lowest standardized test scores in the state in 2015, a spokeswoman for the Institute for Quality Education defended the Fort Wayne school’s poor performance by claiming accountability for Indiana voucher schools is greater than for public schools.

“Traditional public schools as well as public charter schools can receive an F for four consecutive years before the state can intervene,” Erin Sweitzer told The Journal Gazette. “Private voucher schools, however, are required to stop accepting new voucher students after two consecutive years of receiving a D or F.”

What Sweitzer and other voucher proponents don’t acknowledge is the accountability loophole that allows charter and voucher school operators to walk away from a failing school and open shop under a different name – with barely an interruption in the generous flow of state tax dollars. After a D grade in 2015-16, Horizon Christian Academy went on to receive an F for each of the next two academic years. The state prohibited the school from accepting new voucher students last year, but paid $880,000 in vouchers for returning students. That’s on top of the $11.4 million Horizon’s three schools have collected since the taxpayer-funded voucher program began in 2011.

Now, the school’s co-founder has left Horizon and is preparing to open a new faith-based school, Abraham Preparatory Academy.

Tammy G. Henline told The Journal Gazette’s Ashley Sloboda that the school, at Statewood Baptist Church, is planning a “large, public registration soon.” WFFT-TV reported the school will “rely heavily on a virtual curriculum” and is seeking state accreditation, which would make it eligible to receive vouchers.

If the Indiana State Board of Education approves accreditation, it will deliver Exhibit A in the accountability charade supported by voucher proponents.

In the name of parent choice, they ignore policies that allowed the failing Imagine public charter school to reopen as Horizon Christian Academy and for unlicensed educators to earn six-figure salaries overseeing D- and F-rated schools.

Apparently the voters in Indiana don’t care about how taxpayer dollars are wasted.

Mercedes Schneider read the voluminous indictment of the founders of the online charter chain called A3. She describes the counts in the indictment in this post.

She writes:

In this post, I offer excerpts of the 67 counts detailed in the 235-page indictmentof Sean McManus, Jason Schrock, and nine others who used weaknesses in California’s charter school laws to construct a network of fraud and launder $50M in public funds into their own pockets over the course of years. These 11 individuals (and unidentified others) did so by opening multiple charter schools and using companies, both pre-existing and newly-created, to establish a complex system of self-dealing– with little to no education actually happening via those exploited, educational dollars.

The California legislature is currently deciding whether and how to reform the state’s charter law. The California Charter School Association is fighting any accountability or reform of the law. If a theft of more than $50 million by charter vultures doesn’t persuade the legislature of the need for reform, nothing will.

Bring on more theft of public money! More millions scooped up by entrepreneurs and grifters!

Thanks, Reed Hastings, Eli Broad, Bill Bloomfield, the Fischer family (the Gap and Old Navy), the Walton family, and all the other billionaires who make this piracy possible and who fund the CCSA!

Why spend money on public schools when it can go right into the bank accounts of smart and savvy entrepreneurs?

 

Attention Editors of U.S. News & World Report!

Gina Caneva teaches in a high school in Chicago that received a high ranking from U.S. News & World Report, but she is not happy. 

She knows the rankings are destructive nonsense. They are a fraud.

I began teaching 15 years ago at Corliss High School in the Roseland community on the Far South Side. Then and now, the school’s student body is nearly entirely African American, and 90% are termed “low income.” Currently, U.S. News and World Report states that Corliss is in between 430-647 in their rankings, CPS gives it a Level 2 rating and the Illinois Report Card designates it as a lowest performing school. Although I don’t have the numbers from 15 years ago, without a doubt these rankings would have been similar as I remember it being a school “on probation.” This meant that it could be closed.

But inside, it was neither a school on probation nor a failing school. Teachers worked together to prepare a rigorous curriculum that engaged students at many different skill levels despite lacking resources. Many students were fully present and active in their coursework. When outsiders stereotyped my students by asking, “Do they listen to you?” and “Do you just pass them through?” I told them story after story about my students reading and analyzing the nearly 600-page “Invisible Man” and writing poetry that rivaled published authors.

But there were some obstacles a rigorous curriculum and student engagement couldn’t overcome. Back in 2004, we only had one working computer lab for over 1,000 students. When we returned from winter break, bullet holes pierced our corridor windows — a glaring reminder of the violence in the neighborhood. Students had very few resources to deal with trauma or social-emotional learning as social work services were slim to none. I remember working with a student who lost her mother and younger siblings to violence over Christmas. She did not need rigorous instruction; we were ill-equipped to supply the emotional support she needed.

My second school, TEAM Englewood Community Academy, was a start-up school that opened because a low-ranked school was closed. Again, teachers and students worked diligently together to achieve district goals. Our students rarely met them, but not for lack of effort or focus. Bodies of research support the impact of poverty and segregation as legitimate factors of limited success on standardized tests. But whatever the factors were, for my students, they proved to be too much as the school would be labeled a failure. Last year, TEAM Englewood closed in much the same fashion as the school it replaced.

Presently, I teach at the 11th best ranked high school in Illinois. Lindblom teachers work diligently and are experts in their fields. We strive to provide a rigorous curriculum as much as teachers I worked with at Corliss and TEAM Englewood did. But there are two major differences at Lindblom. First, our students meet and exceed district, state and national goals. Second, they have to test in to get accepted into our school. As a selective-enrollment school, if a student does not meet the criteria of a certain score on a placement test before ninth grade, they cannot attend Lindblom. Yet our school, with our selective population, is ranked using the same measures against schools that are not selective. Simply put, the process is unfair.

 

 

Valerie Strauss posted a fascinating column about the biggest charter scam in history. 

She writes:

Late last month, San Diego officials indicted 11 people in what they described as a charter scam that defrauded the state of California of more than $50 million in education funds.

The indictment details a scheme in which an Australian man and his business partner in Southern California opened 19 charter schools throughout the state and then took the public funding the schools received to operate and used it instead for real estate and other ventures.

This post explains the scam that the 235-page indictment spells out in detail. This is long but worth the time to read to get an understanding of how easy it is, because of lax charter sector laws in some states, to defraud the public.

California, which has more charter schools and more charter school students than any other state, now has one of the most lax charter laws in the country, allowing these schools to operate with little if any accountability or transparency to the public.

The story was written by Will Huntsberry, a reporter for the Voice of San Diego. She received permission from the Voice of San Diego to repost it in full. It is an important story.

It begins like this:

Sean McManus and Jason Schrock created an online charter school empire that covered more than half the state of California, according to prosecutors and investigators for an outside charter school organization.

From the port of entry at San Ysidro up to Los Angeles, past the cliffs of Big Sur all the way to Santa Cruz; east through Raisin City, past the giant sequoias of Sierra National Forest, and down into the flat and quiet of Death Valley; south again to the Mexican border; and back to the coast — a person could travel unbroken through 20 counties that made up the lower half of their empire. An outpost of 14 counties encompassing Sonoma and Sacramento sits further north.

From this vast swath of territory, McManus and Schrock absorbed mind-blowing profits. Take just some of their 2016 tax returns (1): Their nonprofit charter management company A3 brought in $14.2 million in revenue. It spent only $3.6 million. Of the money it spent, $855,796 went to McManus and Schrock’s salaries. They appeared to be the only two employees, according to the tax return.

The profits climbed even higher in the months that followed, according to an indictment (2) filed by prosecutors. A3 Education and other companies controlled by McManus and Schrock ultimately brought in more than $80 million, prosecutors say.

Bill Phillis, former State Deputy Superintendent, watches over school spending and misspending in Ohio, in hopes that one day there will be equitable and adequate funding of public schools, instead of the current regime of school choice, waste, fraud, and abuse.

 

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Richard Allen Academy charter school audit cites fraud
The state audit cited illegal payments to board members and the treasurer, nepotism, failure to withdraw students, discrepancy between employee contributions to the pension systems and the amount the charter school paid to the pension systems. In addition, the audit indicates school and management company funds were comingled by which the company benefited at the expense of the charter schools. The charter school seems to benefit adults, not students.
The practice of charter companies benefiting at the expense of the charter school students is commonplace in the charter industry. Hopefully, in future audits, the State Auditor will take on the big boys in the charter industry.
Charter chains typically establish companies that provide consultant services, facilities and other services that charge the charter school outrageous rates. These schemes, of course, enrich the charter functionaries resulting in less educational opportunities for students.
William L. Phillis | Ohio Coalition for Equity & Adequacy of School Funding | 614.228.6540ohioeanda@sbcglobal.net| www.ohiocoalition.org
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The New York Daily News published an opinion piece attacking Bernie Sander’s call for a moratorium on charter schools, echoing the NAACP and Black Lives Matter. The article claimed that Senator Sanders was hurting children of color.

Carol Burris and I published a response in the same publication to the attack, which is included here.