Archives for category: Fraud

 

Peter Greene read an unusually annoying article in the Detroit News that showed just out of touch the authors are.

Michigan is a state that went overboard for school choice, thanks to former Governor John Engler and the billionaire DeVos family.

Michigan has dropped down to the bottom of NAEP, as scores have collapsed for every group.

Jeb Bush arrives to tell Michigan what they need to do is double down on their failed strategies. More choice. More testing. More accountability. More threats. More punishments.

Bush claimed that these strategies worked in Florida but they didn’t.As Greene notes, fourth grade score went up only because the state holds back third graders who don’t pass the third grade reading test. By eighth grade, students in Florida are at the national average.

Who aspires to be average?

Things are so bad in Michigan that average looks good. It is not.

 

As reported earlier today, online charter operators in California with multiple shell corporations have been indicted for embezzling more than $50 million for their charters. 

Also indicted were the leaders of the tiny rural school districts that authorized their charters as a way to collect fat fees for doing nothing. This feature is a serious flaw in the state’s notoriously lax charter law.

A tiny district can authorize a charter in Los Angeles or San Diego, then sit back and collect commissions. Efforts are underway now to fix the law but the California Charter Schools Association has fought all efforts at accountability.

A3 Education recruited small public school districts to sponsor the charter schools in exchange for oversight fees. Prosecutors say A3 enrolled about 40,000 students throughout the state, none of whom received any services.

The company that operated a network of 19 online-only schools is accused of paying sports leagues as little as $25 a student for information used for enrollment. School districts are funded by the state based on the number of students.

The students didn’t know how their names were being used, said San Diego County District Attorney Summer Stephan, calling them victims…

The Dehesa Elementary School District, which has only about 150 students east of San Diego, authorized several charter schools with oversight for 20,000 students, Stephan said. The $2 million in oversight fees collected one year was more than the district’s annual payroll.

Nancy Hauer, Dehesa’s superintendent, was among 11 people charged in the case. Other defendants were employed by A3 and its charter schools.

The Dehesa school board said it couldn’t comment on the charges and vowed to fully cooperate with investigators. Hauer was not available to comment.

“The Board of Education was stunned to learn about the charges, and we have engaged legal counsel to review this matter and any possible implications for district operations,” the Dehesa district said.

The grand jury returned its indictment May 17 after hearing six weeks of testimony from more than 70 witnesses.

A spokesperson for the charter lobby insisted that it did not approve of “bad actors” but has used its vast resources to kill every legislative effort to amend the law.

The California Charter Schools Association said it raised concerns about A3 more than a year ago with the state education department and urged an investigation.

“To be clear, there is no room for bad actors and irresponsible authorizers in California’s charter public school movement,” said Myrna Castrejón, the group’s president.

As we say in Brooklyn, if you believe the lobbyists who have defeated all efforts to stop self-dealing, I have a bridge to sell you.

 

With the encouragement of the super lobbyists of the California CharterSchoolAssociation, the California Legislature continues to block any meaningful reform of its lax charter law, even as the news breaks that online charter operators were charged with scamming more than $50 million from taxpayers.

Peter Greene calls this one “a spectacular charter scam.” He is right. We have seen plenty of garden-variety scams and multi-Million dollar charter frauds, but this one is the biggest yet!

Morgan Cook and Kristin Taketa report in the San Diego Union-Tribune (a newspaper that supports charters):

Using in-depth knowledge of California education funding, charter school regulations and deceptive business disclosures, an Australian citizen and his partner in Long Beach orchestrated a multi-year conspiracy to fleece taxpayers out of more than $50 million, prosecutors say.

Sean McManus, 46, an Australian who operated charter schools in California, and another charter school operator, Jason Schrock, 44, and nine others were named as defendants in a 67-count indictment announced this past week by the San Diego County District Attorney’s Office.

Prosecutors say McManus, Schrock and others enrolled thousands of students into online charter schools, often without their knowledge, and collected millions in state funds using student information obtained from private schools and youth athletic groups.

This criminal enterprise funneled millions of taxpayer dollars into private bank accounts of the defendants,” said District Attorney Summer Stephan.

Eight of the 11 co-defendants have pleaded not guilty and denied the allegations. Two more are expected to be arraigned June 6….McManus is at large, possibly in Australia, prosecutors said. A San Diego Superior Court judge issued a $5-million bench warrant for his arrest and froze the accounts of charter schools, related companies and individuals related to the alleged conspiracy.

A reader who calls himself “Francisco” has commented recently that there are just as many frauds in public schools as in charter schools. Hey, Francisco, can you top this?

Peter Greene responds:

The twitterverse rebuttal has been, “Oh, yeah. You’re just focusing on charters. I’ll bet we could public school scams just as bad.” Maybe. But the oversight provided by a locally-elected board and mandated transparency of financial dealings would make it pretty damn hard. To pull off a scam of this magnitude, you need to wide-open barely-regulated low-oversight world of charters.

As Greene points out, in what world is it possible to buy and sell schools like franchises other than Charter World?

 

 

Jack Schneider, a historian of education who often collaborates with Jennifer Berkshire, analyzes the fading allure of charter schools. After years of claims that they would “save” public schools and poor children, the public has given up on them. Why? They have not delivered, and the public gets it.

For most of the past thirty years, charters seemed unstoppable, especially because their expansion was backed by billions from people like the Waltons, Gates, and Broad, as well as the federal government. But they have not kept their promises.

Today, however, the grand promises of the charter movement remain unfulfilled, and so the costs of charters are being evaluated in a new light.

After three decades, charters enroll six percent of students. Despite bold predictions by their advocates that this number will grow fivefold, charters are increasingly in disrepute.

First, the promise of innovation was not met. Iron discipline is not exactly innovative.

Second, the promise that charters would be significantly better than public schools did not happen. In large part, that is because the introduction of charters simply creates an opportunity for choice; it does not ensure the quality of schools. Rigorous research, from groups like Mathematica Policy Research and Stanford University, has found that average charter performance is roughly equivalent to that of traditional public schools. A recent study in Ohio, for instance, concluded that some of the state’s charters perform worse than the state’s public schools, some perform better, and roughly half do not significantly differ.

Finally, charters have not produced the systemic improvement promised by their boosters.

Competition did not lift all boats. In fact, competition has weakened the public schools that enroll most students at the same time that charters do not necessarily provide a better alternative.

Schneider does not mention one other important reason for the diminishing reputation of charters: scandals, frauds, embezzlement, and other scams that appear daily in local and state media. A significant number of charters are launched and operated by non-educators and by entrepreneurs, which amplifies the reasons for charter instability and failure.

 

 

 

 

The California Legislature is considering four bills to reform the state’s massive charter school industry (1,300 schools, mostly unregulated and unsupervised). One of the bills would prohibit school districts from authorizing charters in other districts. The following story is a classic example of rural school districts authorizing online charters in San Diego and Los Angeles, solely to get the commission attached to each student. In this case, the online charters were cash cows for their owners. [A personal aside: Last February, I was in Newport Beach, California, having breakfast at a hotel. The man at the next table was loudly discussing his schools with someone who was selling athletic services, $5 a student. When he got up to leave, I asked him if he was “in the charter school business.” He said, “Yes,” and said he owned 40 schools under six different corporate names. I asked him his name. He said, “Sean McManus.” I should have asked him to join us. He is one of the key figures in the following article.]

The San Diego Union-Tribune reports that eleven people connected to online charter schools have been indicted for “criminal charges of conspiracy, personal use of public money without legal authority, grand theft and financial conflict of interest.“

The online charters operate in San Diego and Los Angeles, but were authorized by other districts that get a slice of the revenues. This is one of the corrupt practices that have been rampant in California, where lax state law allows sharp operators to get public money and cheat students with no consequences. The Legislature is currently debating a proposal to stop allowing District A to authorize a charter in District B, a practice that is mercenary and predatory. Until now, the powerful California Charter Schools Association—enriched by billionaires like Reed Hastings and Eli Broad—has fought all accountability for charter schools.

At the center of the allegations are leaders of the charter school management corporation A3 Education, a Newport Beach corporation whose leaders control 13 charter schools across California, according to an indictment filed May 17.

A3’s chairman, Sean McManus, and president, Jason Schrock, essentially owned and operated the charter schools throughout California at the same time that A3 contracted with those schools, according to the indictment.

McManus and Schrock operated multiple businesses that charged their own charter schools millions of dollars for services. Then they channeled money from those businesses into their own charitable trust and personal bank accounts, according to the indictment.

A3 Education and the businesses affiliated with McManus and Schrock together have invoiced at least $83.3 million from the 13 charter schools, according to the indictment.

From the affiliated businesses, at least $8.18 million went into personal bank accounts, some in Australia, and into charitable trust accounts for McManus, Schrock and their wives, and $500,000 went to a family member of McManus, according to the indictment.

McManus and Schrock also used $1.6 million of A3 Education’s funds to buy a private residence for McManus in San Juan Capistrano, the indictment states.

Also according to the indictment, six people, including McManus and Schrock, conspired to collect state money for students who were listed as being enrolled in Valiant Charter Schools but were not receiving services.

The two Valiant schools will close permanently on June 30. Several thousand students will need to find new schools. The San Diego online charter was authorized by the Dehesa School District, and the one in Los Angeles was authorized by the Acton-Agua Dulce Unified School District.

The children were not assigned to teachers who have state-required professional certificates, the indictment said. The students were not in contact with the schools or provided with educational services during the summer months, as some of the co-conspirators claimed, according to the indictment…

Also indicted is Nancy Hauer, who is superintendent of Dehesa School District, which authorized several charter schools, including Valiant Academy of Southern California. The Dehesa district office did not immediately provide a comment Tuesday.

Also among the indicted is Steve Van Zant, a former Mountain Empire Unified superintendent who three years ago pleaded guilty to violating conflict-of-interest laws, after he brokered deals with charter schools to operate in other school districts, prosecutors said at the time.

Valiant Academy had 43 students two years ago, 726 last year, and 2,250 this year. It’s academic performance was so poor that even the California Charter School Association recommended that it be closed.

Betsy DeVos says that parents always know what’s best. Why were they enrolling their children in these failing “schools.”?

 

 

 

 

Vielka McFarlane, founder of the Celerity charter chain in Los Angeles, was sentenced to 30 months in prison for misappropriation of $3.2 million from the schools’ accounts. 

In January, Vielka McFarlane pleaded guilty to one count of conspiracy to misappropriate and embezzle funds for personal use. McFarlane, 56, had for years used her charter schools’ credit card and spent taxpayer money on expensive clothing, luxury hotel stays and first-class flights. The bulk of the money spent was for the purchase and renovation of an office building in Columbus, Ohio, where McFarlane intended to open another charter school.

McFarlane was also ordered to pay restitution of $225,138.15 within 60 days.

The case dates to 2012. A routine request for Celerity’s financial records from L.A. Unified’s charter schools division revealed credit card statements of lavish purchases beginning in 2009 — five years after McFarlane had founded the first charter school. The school district’s inspector general opened an investigation and eventually, the federal government got involved.

Her conviction and sentencing raise the question of why Ben Chavis, founder and operator of the American Indian Model Charter Schools in Oakland, had all charges dismissed a few weeks ago after a state audit found that he had redirected $3.8 million of the schools’ funds to his personal accounts and that he used federal charter funds to pay the lease for the charters, which were located in buildings he owned. Are there any investigative reporters tracking this story?

 

Jeannie Kaplan was twice elected to the school board in Denver. She has long been active in civil rights and education issues. She has been a persistent and vocal critic of school closings, choice, and boasting about paltry gains in test scores. She was ignored by the “Reformers” like Michael Bennett and Tom Boasberg. As “Reform” money poured into Denver elections, the grassroots candidates she favored were defeated time and again, and Denver’s school board became unanimous for disruption.

When she recently read a blunt admission by her fellow Coloradan Van Schoales that “reform as we know it, is over,” she was astonished, outraged, and not amused.

Here is her response.

She summarized it in the title of her post: “OMG, ICYMI, SMDH.”

For a translation, open the link.

She begins:

Soooooo…it appears   “The education reform movement as we have known it is over.”  This from none other than “education reformer” extraordinaire, Van Schoales,  writing in the May 6, 2019 Education Week: Education Reform as We Know It Is Over.  What Have We Learned? Along his way to becoming the president of Colorado’s own reform-oriented “oversight” committee, A+ Colorado , Van has worked at Denver’s Piton Foundation and Education Reform Now (ERN), the advocacy arm of Democrats for Education Reform (DFER).  He has also been integrally involved with starting and supporting local charter schools and drafting statewide education reform-oriented legislation. When Denver media has needed a quote to support “education reform” outcomes, whom have they called?  Not Ghost Busters!  No, their go-to guy has been Van Schoales. So his partial about face in his recent post in Education Week is quite surprising.  In his words:

 “There are three primary reasons that education reforms failed to live up to our expectations: too few teacher-led reforms, a lack of real community support from those most impacted, and a lack of focus on policy change for public schools across the board, not just the lowest of low-performing schools.” 

Gee.  Who knew?

If I weren’t so darn mad, I’d be shedding tears of laughter.  If we hadn’t fought and fought and fought against “education reform” for the last 15 years, foretelling the recent conclusions of ed reformers,” the whole education reform movement could be viewed as a bad joke.  If we the taxpayers hadn’t spent hundreds of millions of dollars and if we the people hadn’t lost at least a generation of students and teachers to the chaos and churn and complete lack of common sense of “education reform,” we could all be lifting a glass of whatever to toasting “we told you so.”  If only the past 15 years could have been a bad dream, and we could all be like Dorothy and wake up in our safe places, wiping out the nightmare. But alas, that is not the case. And even with these mea culpas coming from unexpected places, most reformers are still unwilling to fully accept the disasters they have wrought upon community after community, most of which just happen to be populated primarily by people of color.

Sue M. Legg is a scholar at the University of Florida, a leader in Florida’s League of Women Voters, and a new board member of the Network for Public Education. She has written an incisive and devastating critique of Jeb Bush’s education program in Florida, which began twenty years ago. Bush called it his A+ Plan, but by her careful analysis, it rates an F. Advocates of school choice tout Florida’s fourth-grade scores on NAEP, which are artificially inflated by holding back third graders who dontpass the state test. By eighth grade, Florida’s students rank no better than the national average. Note to “Reformers”: a state that ranks “average” is NOT a national model.

Twenty Years Later, Jeb Bush’s A+ Plan Fails Florida’s Students. 

Sue Legg explodes the myth of the Florida miracle in her well documented report:  Twenty Years Later: Jeb Bush’s A+ Plan Fails Florida’s Students. She has compiled the research over twenty years showing the negative impact of privatization in Florida.  The highly touted achievement gains of retained third graders are lost by eighth grade.  Top ranked fourth grade NAEP scores fall to the national average by eighth grade. One half of twelfth graders read below grade level.  The graduation rate is above only 14 states.

The A+ Plan was a great slogan, but its defects resulted in a twenty-year cycle of trial and error to fix the problems.   School grades are unreliable.  A school receiving a ‘B’ grade one year has about a thirty percent chance of retaining the grade the following year. Invalid grades occur so frequently that State Impact reports that Florida made sixteen changes to the school grade formula since 2010.  It was thrown out but the new version is no more stable.  What it means to be a failing school, moreover, is consistently redefined to make more opportunity for charter school takeovers.  

Florida touts improving academic achievement in the private sector that is not supported by research.  The CREDO Study reams Florida’s for-profit charter industry.  According to a Brookings Institution study, low quality private schools are on the rise, and the LeRoy Collins Institute’s 2017 study, Tough Choices, explains that there are twice as many severely segregated Florida schools (90% non-white students) than there were in 1994-5.  The legislature ignores the problem in part because key legislators have personal interest in charter and private schools.  “Florida suits him” said Roger Stone, recently indicted in the Mueller investigation.  The New York Times article: Stone Cold Loser: quoted Stone’s admiration for Florida when he said “…it was a sunny place for shady people”.  Miami Herald series “Cashing in on Kids” reported a list of questionable land deals and conflicts of interest by for-profit charter school management. The federal government began an investigation in 2014.  Last year a  charter management firm faced criminal charges, and Florida charters have the nation’s highest closure rate.

WalletHub reports that Florida is 47th of 50 states in working conditions for teachers.  As a result, the Florida Education Association projects 10,000 vacancies next fall. Teacher shortages are not only related to money, they are due to a deliberate attack on the profession in order to break teacher unions and impose a political ideology.  As Steve Denning in a Forbes magazine article explains: “The system” grinds forward, at ever increasing cost and declining efficiency, dispiriting students, teachers and schools alike”. The thinking, he says, is embedded in the No Child Left Behind (NCLB) and Race to the Top policies.   The A+ Plan is an extension of these policies that includes increased testing and rewards and punishments related to results.

Florida’s teachers are not allowed to strike.  Parents may have to.  The legislature recently approved small raises for teachers but expanded the unconstitutional voucher program.  The governor is not concerned; he appointed three new judges to the Florida Supreme Court.  In the May 3rd 2019 Senate session, Senator Tom Lee chastised his fellow Republicans.  He has supported charter schools for years, but said ‘the industry has not been honest with us...first they wanted PECO facility funds, then local millage; now they want a portion of local discretionary referendum funds.  He called the current supporters ‘ideologues who have drunk the kool-aid‘.

The full report is published on the NPE-Action website.

 

Former Milwaukee School Board President Michael Bonds was convicted of accepting bribes to help a Philadelphia charter school operator. 

As part of an agreement with prosecutors, Bonds, 60, pleaded guilty to two counts in federal court in Philadelphia. He faces up to 10 years in prison and a $500,000 fine at his sentencing, tentatively set for September, but which will depend on when he completes his pledged cooperation with an ongoing federal investigation…

Bonds served on the MPS board from 2007 until he abruptly resigned in July 2018, nine months before his term was to end. 

He was charged last month with conspiracy and violations of the Travel Act for taking kickbacks in return for votes beneficial to Universal Cos. between 2014 and 2016. Two unnamed Universal executives were implicated in the scheme but have not been charged.

Veteran Milwaukee journalist Alan Borsuk described the affair as “a scandal with few rivals in the recent history of Milwaukee education.”  He sums up the details.

Universal Academy. Universal came into Milwaukee riding some celebrity appeal — its founder, Kenny Gamble, was a soul music star — and a reputation for running some decent charter schools, some housing projects and other ventures in its home town, Philadelphia.

Universal also initially named a well-regarded Milwaukee educator as its local leader. Ronn Johnson had founded and led the YMCA Young Leaders Academy. But months before Universal opened, Johnson was charged with sexually assaulting several students years earlier. A few months later, he died in a fire at his home in Brown Deer. His death was ruled a suicide.

The president and CEO of Universal in Philadelphia, Rahim Islam, stepped in to oversee the Milwaukee operation and spent a lot of time in the city. According to the Philadelphia Inquirer, he is one of the main figures in the bribery scheme involving Bonds. 

At one point, Universal schools enrolled 1,000 students.

Perhaps because enrollment didn’t meet expectations and then started to fall, and perhaps because Universal was overextended with the large amount of MPS property it was using, Universal began to slide. Islam became unreachable (he had been glad to talk in early times). Leadership of the schools kept changing. It was clear Universal wasn’t investing in Milwaukee any further.

And things got worse. First two schools closed. Then, the third. It was done abruptly, leaving kids and staff in the lurch.

And now a former Board President is headed to jail. Very sad.

 

 

Florida is controlled by Swamp creatures who want to divert money from public schools and send it to charter schools and religious schools. Jeb Bush is the puppet master who has demanded strict accountability for public schools, minimal oversight of charter schools, and no accountability at all for religious schools.

In this article, Carol Burris—the executive director of the Network for Public Education—examines the charter school mess. Florida has about three million students. About 300,000 attend charter schools. Some members of the Legislature have direct conflicts of interest but nonetheless vote to shower favors and money on the state’s charters.

Burris reports that nearly half of the state’s charters operate for profit. Entrepreneurs have flocked to Florida to get the easy money.

Burris begins:

Schoolsforsale.com claims to be “the largest school brokers in the United States that you will need to call.” Its owner, Realtor David Mope, is a broker for private schools, online schools and preschools. He will also help you start your own virtual school by providing certified teachers, marketing expertise, and assistance in securing accreditation.

Mope is not a newcomer to the for-profit school world. He was the owner and CEO of Acclaim Academy, a military-style charter chain. Acclaim’s “cadets,” who were predominantly minority students from low-income homes, wore army fatigues and engaged in drills. The schools’ education director, Bill Orris, had previously led a charter school that was shut down after its management company abandoned it.

Warning signs of failure were there from the beginning. The chain aggressively attempted to open new schools in multiple districts before establishing a track record in its two existing schools. Most districts saw red flags, but two did not. In the fall of 2013, two more Acclaim schools were approved, bringing the total schools in the chain to four.

As school grades came in, unsurprisingly, the Acclaim Academy charter schools were rated “F.” In 2015, three closed their doors, leaving families in the lurch in a manner that parents described as chaos. Although Florida’s State Board of Education had allowed the schools to stay open to finish the school year, Mope filed for bankruptcy, sending students out on the street scrambling to enroll in another school with only a few weeks left in the school year. Vendors would never be paid. Parents helped teachers pack up. Nevertheless, Mope pretended the schools were solvent and continued to broker a deal to purchase hundreds of thousands of dollars of equipment.

How could Acclaim Academy ever open in the first place? Who would give this risky charter chain the seed money to get started? The American taxpayers did. A U.S. Department of Education Charter Schools Program (CSP) grant for $744,198 helped get the Acclaim Academies off the ground.

Acclaim Academy charter schools were among 502 Florida charter schools that received grants from the Department of Education between 2006 and 2014. All but two came from federal money given to the state for distribution. According to the CSP database, these Florida charter schools were awarded a total of nearly $92 million in federal funds between 2006 and 2014.

At least 184 (36.6 percent) of those schools are now closed, or never opened at all. These defunct charter schools received $34,781,736 in federal “seed” money alone.