Archives for category: Fraud
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Columbus Dispatch Editorial: Will the ECOT Saga Please End?

By dianeravitch
December 18, 2017 //
10

One of the most remarkable turnarounds in the nation happened in Ohio. There have been so many charter scandals that the major newspapers have become skeptical, as well they should be. They have noticed the scams, frauds, phantom schools, phantom students. They’ve noticed how many charters get scores lower than the public schools they were supposed to compete with.

They are no longer entranced by the marketing of the charter school industry.

In Ohio, the biggest scandal is the Electronic Classroom of Tomorrow, known as ECOT.

This editorial appeared in the Columbus Dispatch. The editorial board is no longer fooled by the charter industry.

It was founded in 2000. It developed some very bad habits that cheated the public of millions of dollars.

“Alas, the school’s owner, who had no background in education, began to realize that education is really hard. And keeping the attention of at-risk students is really, really hard. The owner began to realize that many students who signed up for his school almost never logged in. Didn’t show up. His virtual classroom was half-empty. But tracking down these students and hounding them to get online and learn something would be time-consuming, expensive and, in many cases, nearly impossible.

“The owner quickly realized something else. Keeping an honest account of how many students were logging in to meet state attendance requirements would reduce the amount he could charge the state — by millions of dollars. Every year. The owner made an unfortunate choice. He decided to charge the state for a full year of instruction for each student signed up, even if a student logged in for only a few minutes each month.

“This is the sad story of ECOT — the Electronic Classroom of Tomorrow, Ohio’s largest online charter school. Since its founding in 2000, the school consistently has billed the state for students whose participation it could not document.

“In November 2001, then-State Auditor Jim Petro determined ECOT received $1.7 million for students not enrolled. Despite these early warnings, ECOT continued to charge Ohio’s taxpayers for phantom students, in increasing numbers.

“State audits from 2000 to 2016 revealed how lucrative this pattern has been for ECOT owner Bill Lager. Although organized as a nonprofit, ECOT contracts with two Lager-owned, for-profit entities for management and software services. From 2000 to 2016, ECOT paid the two businesses a tidy $192.8 million.

“At long last, in 2016 the Department of Education had had enough. It began insisting on honest accounting. After reviewing log-in durations and offline documentation for the 2015-2016 school year, the department concluded ECOT had reported 15,322 full-time students, while only 6,313 could be verified. The State Board of Education required ECOT to repay about $60 million of the $108 million it had received.

“This upset the owner. So he sued the state and its taxpayers, claiming the education department has no right to look under the hood, no right to check whether students actually are logging in. Fortunately, this argument was rejected by both the Franklin County Common Pleas Court and Court of Appeals. The case now is before the Ohio Supreme Court.”

ECOT has the lowest graduation rate in the nation.

How much longer will the taxpayers of Ohio allow this “school” to collect millions for students who never participated in class?

Categories Charter Schools, Education Industry, Fake, For-Profit, Fraud, Ohio, Privatization, Virtual Charter Schools

California Audit: Charter School Leader Used School Credit Card for Weapons, Clothing, Personal Expenses

By dianeravitch
December 16, 2017 //
7

An audit of a charter school in Chico, California, found possible financial fraud. California has a weak charter law and one of the worst records in the nation for holding charter schools accountable and monitoring fraud.

A former Blue Oak Charter School administrator is alleged to have used school credit cards to purchase weapons, movies and clothing, according to an audit conducted by the Fiscal Crisis Management Assistance Team.

The Fiscal Crisis Management Assistance Team, a state agency tasked with providing financial guidance and reviews to California school districts, audited Blue Oak this year in response to concerns brought forth by the school and the Butte County Office of Education.

The team analyzed financial documents from 2014-2015, 2015-2016 and 2016-2017, and found that fraudulent activity may have occurred in that period, according to the Extraordinary Audit report released on Nov. 16. The school’s executive director during that time was Nathan Rose.

The 380-student Waldorf school experienced significant financial challenges in recent years and was over budget for several years and struggling with cash flow, Executive Director Susan Domenighini said.

The board became concerned that something “wasn’t right,” and approached Chico Unified School District, the agency tasked with overseeing the school, for additional support and eventually asked the Butte County Office of Education request that FCMAT conduct an Extraordinary Audit.

The findings of that audit, released earlier this month, indicate there may have been misuse of school funds on the part of the former school executive director and noted that “deficiencies and exceptions” and the school’s internal control environment increased “the probability of fraud, mismanagement and/or misappropriation of funds.”

The report states that the school’s then executive director and other administrators routinely used school credit cards for travel expenses and meals, and that the executive director charged meals, snacks and beverages to school credit cards without an identifiable business purpose.

Although no administrators were named in the report, Nathan Rose served as Blue Oak’s executive director from June 2012-June 2016. After leaving Blue Oak, he went on to serve as the superintendent/principal for Pine Ridge Elementary School District, a position he held for several months.

One section of the report states the former executive director “extensively” used credit cards established as school accounts and issued in his name for food, fuel and other purchases that may have been of personal benefit. Some of those purchases include weapons, tactical gear and military radios; a Birchbox monthly beauty product subscription service; iTunes, Amazon On Demand and IndieFlix downloads; numerous fast food purchases; clothing and accessories; Disney Resort transactions; liquor store transactions and more than $3,990 in unsubstantiated expenditures to Costco, among other expenses.

School staff could not account for several items purchased with school credit cards, some of which were shipped to the then executive director’s residence, including an Epson home cinema, a Fuji underwater camera and folding knives.

Categories Accountability, California, Charter Schools, Education Reform, Fraud

Indiana: Governor Wants to “Do Something” about Horrible Online Charter School

By dianeravitch
December 11, 2017 //
2

In choice-happy Indiana, where all choices are presumed to be good choices, Governor Eric Holcomb called for the state to do something about the woeful performance of the Indiana Virtual School. Be it noted that virtual schools have low performance everywhere, rake in millions of dollars, and buy political support. Will Indiana be any different from other states that have ignored the scandal of virtual charter performance?

In October, Chalkbeat reported that Indiana Virtual School, one of the state’s largest online charter schools, had received more than $20 million from the state while graduating about 61 students. And between at least 2011 and 2015, a for-profit company headed by Indiana Virtual’s founder, Thomas Stoughton, charged the school millions of dollars in management services and rent.

Wow! More than $20 million to graduate 61 students. A good haul for the school, not the taxpayers.

Indiana Virtual and its sister school that opened this year, Indiana Virtual Pathways Academy, together enroll 6,332 students. Across the state, more than 12,000 students are enrolled in online charters, most of which earned F grades this year. Two other major online charters, Hoosier Academies and Indiana Connections Academy, also opened new schools in the past year or so.

What will the state do? Certainly the state won’t close down this fraud.

At this point, Holcomb said he doesn’t see a need just yet for legislation addressing online schools, although he wouldn’t rule it out. He said his team has communicated with the state board that this area needs “immediate attention and action.” It’s not yet clear what measures they want to introduce, or how much authority the state board has to change charter school rules, but he indicated authorizing could be on the list.

David Harris, of the faux-liberal Mind Trust in Indianapolis, took time from privatizing public schools in Indianapolis, to suggest the need to change authorizers.

Ah, yes, change authorizers. That won’t help.

These scams should be closed. For-profit schools should be banned.

Categories Accountability, Education Reform, Fraud, Indiana, Virtual Charter Schools

Delaware: Charter Leader Sentenced to Federal Prison for Embezzlement

By dianeravitch
December 10, 2017 //
16

The former leader of Family Foundations Academy was sentenced to 18 months in federal prison for embezzlement. He confessed that he was suffering from “‘a severe level of sexual addiction and shopping addiction.’” Yeah, that’s a pretty good reason for embezzlement of public funds.

It is almost as good as my favorite from the founder of the Lion of Judah Charter School in Cleveland, who was indicted for diverting $1.2 million to his personal businesses and was ordered to pay restitution of $195,000. His lawyer said it wasn’t right to blame him because he saw easy opportunities to make money and he got greedy.

Excuses, excuses! Greed, shopping addiction!

Categories Accountability, Charter Schools, Delaware, Education Reform, Fraud, Ohio, Privatization

Erich Martel: In D.C., Gaming the System is Commonplace

By dianeravitch
December 9, 2017 //
3

Erich Martel is a retired D.C. teacher and current whistleblower. The principal of the much-criticized Ballou High School–where chronic absenteeism was ignored–has been removed, but the deeper problems have not been addressed. He points out in a letter to the editor of the Washington Post that the system of rewards and punishments built into the system encourages gaming the system. Standardized tests are used not to identify student needs and remediate them, but to hold schools’ accountable for meeting goals.

He writes:

There is no mystery to high school students’ deficient achievement: DCPS doesn’t use standardized tests to diagnose and remediate students’ learning needs; they’re used to hold school faculties collectively accountable, while unremediated students are socially promoted. Fifty percent of principals’ IMPACT evaluation consists of “voluntarily” set performance goals, including promotion and graduation rates at the high school level. Principals face an unethical choice: honor the grades that students earned or keep their jobs. It’s time to end troubled DCPS management policies that impede teaching and learning and teach the wrong lesson on integrity.

These are the “get tough” policies installed by Michelle Rhee in the name of “reform” and kept in place by Kaya Henderson. They have produced phony test scores and phony graduation rates. This is the fruit of corporate reform, where meeting the goals matter more than truth.

Campbell’s Law takes its toll again. And always. By using the measure as the goal, both the measure and the goal are corrupted.

“The more any quantitative social indicator is used for social decision-making, the more subject it will be to corruption pressures and the more apt it will be to distort and corrupt the social processes it is intended to monitor.”

On a similar note, Campbell also wrote:

achievement tests may well be valuable indicators of general school achievement under conditions of normal teaching aimed at general competence. But when test scores become the goal of the teaching process, they both lose their value as indicators of educational status and distort the educational process in undesirable ways. (Similar biases of course surround the use of objective tests in courses or as entrance examinations.)

Categories Accountability, Campbell's Law, District of Columbia, Fraud

John Merrow: When “Too Good to Be True” Is Not True

By dianeravitch
December 9, 2017 //
25

John Merrow reviews the miraculous but not true story of the high school in Washington, D.C., that increased its graduation rate from 57% to 100% in one year. And every one of these graduates were accepted into college! A touching story. But a false story. Made even worse by the fact that it was reported by NPR, which is a usually reliable and trustworthy source for news.

Merrow notes that in the original report, 26 of the graduating class of nearly 200 students had not yet earned enough credits to graduate. How, then, could the school have a graduation rate of 100% and a college acceptance rate of 100%?

A little digging, he said, would have revealed the fact that a local D.C. community college accepts all students who have a high school diploma, a GED, or the equivalent, so gaining college acceptance is not a high bar to cross.

He then recounts how NPR walked the story back and did some investigation, finding the original story to be wrong. There was no 100% graduation rate, and many students earned credits with “credit recovery,” sitting in front of a computer for a week to get a semester’s credits. How phony is that!

He writes:

Further evidence that the 100% college acceptance story is bogus comes from academic results. Only 9% of seniors were able to pass the city’s English test, and not a single student passed the math test. The average SAT score for Ballou test-takers was 782 out of a possible 1600. Moreover, teachers told NPR that some administrators actually filled out the college applications for those students who had no interest in attending college!

This disgraceful approach to schooling does widespread damage beyond what is obviously done to kids who receive phony diplomas but no real education. One teacher told NPR, “This is [the] biggest way to keep a community down. To graduate students who aren’t qualified, send them off to college unprepared, so they return to the community to continue the cycle.”

I am not writing this to criticize NPR for missing the story** the first time around. I did that myself more than once in my 41-year career, and I was late in recognizing the flaws in Michelle Rhee’s ‘test scores are everything’ approach in Washington. Her wrong-headed strategy is, arguably, responsible for the mind-set that exists at Ballou today.

Here’s what matters: the Ballou fiasco is the bitter fruit of the ‘School Reform’ movement that continues to dominate educational practice in most school districts today. These (faux) reformers continue to support policies and practices that basically reduce children to a single number, their scores on standardized, machine-scored tests. This approach has led to a diminished curriculum, drill-and-kill schooling, buckets of money leaving the schools and going instead to testing companies and outside consultants, the growth of charter schools (many run by profiteers), and a drumbeat of criticism from ideologues who seem determined to break apart and ruin public education, rather than attempt to reinvent it.

(This approach also once again proves the truth of Campbell’s Law, the more importance given to a single measure, the greater the probability that it will be corrupted. When test scores rule education, some people cheat. And when high school graduation rates rule, people also find ways to cheat.

In case you were not sure, Merrow makes clear that he was hoodwinked by Michelle Rhee, and he calls out the false premises and false promises of the “School Reform” movement, which has done so much to corrupt education by setting targets that can’t be reached without cheating.

Categories District of Columbia, Fraud, High School Graduation, Hoax, Media, Michelle Rhee

Steven Singer: The GOP Tax Scam and the Triumph of Plutocracy

By dianeravitch
December 2, 2017 //
46

The way the Senate Republicans rammed through a tax bill that affects everyone in the country without hearings or debates, without allowing Democrats to read the bill before the vote was taken, is an assault on basic democratic values.

Senator John McCain spoke eloquently during the health care debate about the need to return to normal order, where both parties work together, but even he abandoned what seemed to his principles.

There were no principles to be seen during the debacle in the Senate.

Steve Singer writes here about this rush to redistribute money to the wealthiest in our society, while telling baldfaced lies about its true purposes.

“I am no fan of the corporate Democrats who have taken over what used to be a progressive party. But we can’t blame them for this one.

“This scandal belongs entirely on the shoulders of Republicans.

“The Dems even offered a resolution to delay the vote so that legislators had a chance to read it. All 52 Republicans voted against it!

“This is what happens when the people lose control of their government.

“This is what happens when the rich control lawmakers with their money.

“There is no longer any doubt that we no longer live in a Republic. We no longer have any form of representative Democracy. We live in a pure plutocracy.

“The rich pay the representatives and the representatives do what the rich want.

“The wealthy are their real constituents. We are merely patsies told polite falsehoods to keep us in line.

“You have no political power.

“None.

“Governments get their legitimacy from the consent of the governed.

“You did not give your consent to give away more than a trillion dollars to rich douchebags who don’t need it. But Republicans gave it to them anyway.

“Therefore, our government has no legitimacy.

“We are an occupied people.

“We are the victims of a palace coup.”

There will be an election in 2018.and another in 2020.

We must take back our government.

Time to #Drantheswamp. It is full of snakes and alligators.

Categories Democracy, Economy, Fraud, Hoax

Kevin Ohlandt: Another Charter Scandal in Delaware

By dianeravitch
November 29, 2017 //
4

Kevin Ohlandt reports that the former principal of the Academy of Dover (Delaware) pled guilty to stealing from the school, using several of its credit cards for personal expenses. “He spent the money on electronics, travel, car expenses, gardening and camping equipment, home improvement items and a dog house.”

Ohlandt writes:

“Rodriguez got a $250,000 fine and will assuredly be facing jail time at his sentencing, up to ten years. What I would like to know is if part of that $250,000 fine goes back to Academy of Dover. I think it should. Taxpayers were robbed by Rodriguez, they deserve to have their tax money go back to what it was allocated for.”

The State Auditor was surprised that the school received no oversight. Not from its private board of directors. Not from its auditors. Not from the state Department of Education. Not from the Charter School Accountability Committee.

It is taxpayer money, and no one is minding the cash register or the books. That is an invitation to theft.

Categories Accountability, Charter Schools, Delaware, Education Industry, Fraud, Privatization

Illinois: Charter School Founder Suspected of Stealing $2.7 Million from School Lunch Funds

By dianeravitch
November 18, 2017 //
11

A charter founder in the suburbs of Illinois is under investigation for theft of $2.7 Million from school lunch Funds, to subsidize her lavish lifestyle.

“Pamela Strain said she’d once dreamed of following in the footsteps of Clarence Darrow, the legendary Chicago attorney known for championing the underdog.

“Strain instead went into education, rising to become an elementary school principal in an impoverished neighborhood in Chicago before founding her own charter school in the south suburbs serving underprivileged kids.

“But federal investigators say instead of championing the less fortunate, Strain has been stealing from the very programs intended to help them.

“Court records made public this week show that Strain is suspected of using the small, nonprofit school she founded in 2005 to loot as much as $2.7 million in funds over a seven-year period, including money from federal school lunch subsidies and other grants designed to provide nutritious food to low-income children.

“Strain, 60, allegedly used the funds to pay for a lavish lifestyle, including her home and other properties, luxury cars, spas, salons and shopping sprees at stores such as Victoria’s Secret and Macy’s, according to an FBI search warrant affidavit unsealed in U.S. District Court in Chicago.

“The 54-page filing also contained startling details about the conditions at Strain’s Beacon Hill Preparatory Academy, which operated in various locations in the south suburbs before reopening in Lansing last year under a new name, Lighthouse Christian Academy.”

Categories Charter Schools, Education Industry, Fraud, Privatization

Pennsylvania: Every Cybercharter Fails to Meet State Standards, for Fifth Year in a Row

By dianeravitch
November 12, 2017 //
43

For the fifth year in a row, not one cybercharter in Pennsylvania achieved a passing school performance score of 70. When will these scams be held accountable for their poor performance? When will the State close down these failing schools? These “schools” drain hundreds of millions of dollars away from real schools and get poor results, year after year. Two different cybercharter operators were indicted for stealing millions from state taxpayers. One was convicted, the other was tried but the trial ended in a hung jury.

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Categories Education Reform, Failure, For-Profit, Fraud, Pennsylvania, Virtual Charter Schools
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