Archives for category: Fraud

I posted recently about the indictment in Florida of leaders of an Ohio-based charter management company.

 

This reader reacted:

 

 

“As a previous employee of Newpoint, I hope North Carolina school district opens their eyes and stops allowing NEP to open schools there. Look what has happened in Florida. In Pensacola the Director of Newpoint Academy and Newpoint Pensacola High School Mr. John Graham told us our bank account was swiped clean at the end of every month which left us with nothing to work with financially. We had terrible internet service for our technology based middle school and high school. This left our high school students unable to do class work since their whole curriculum was on line. We had no money, a dirty school, high teacher turnover, and were fed stories of how things were going to get better for four long years. From reading the newspapers from south Florida, this story of no money, high teacher turnover… repeated itself in their counties where Newpoint had schools.

 

 

 

“Now we find out, NEP is charged with grand theft, money laundering, and white collar crime in our county. NEP should have to pay Escambia County that money back. Why does the owner get away with such theft ? If you steal a blouse from a store, you get arrested and thrown in jail for it, but if you steal hundreds of thousands of dollars of tax payers Federal funds, you pay a fine and get away with it? All of these counties should tie that owner up in court with law suits for the next ten years!”

Motoko Rich writes in the New York Times about the terrible results obtained by online charter schools. She focuses on the Electronic Classroom of Tomorrow, whose founder has become very wealthy thanks to taxpayer money and the friendship of reformers such as Governor JohnKasich and the GOP legislators in Ohio. Founder William Lager has been very generous to his friends who hold elected office.

 

A terrific business. A lousy education.

 

Five years ago, the New York Times ran a superb expose of online charters, pointing out that they are very profitable but basically scams that rip off taxpayers.

 

In 2011, the Washington Post published an excellent expose of Michael Milken’s K12 Inc, which is listed on the New York Stock Exchange.

 

 

For-profit virtual charter corporations are a cynical business that exploits children and does not have educate them. It demands full state tuition to provide home schooling plus a “teacher” on a monitor.

 

I wrote about the online charter fraud in my 2013 book “Reign of Error.”

 

Numerous studies have concluded that these schools have startlingly high attrition rates, large “class” sizes, low wages, high teacher turnover, and their students very little.

 

The latest study, by CREDO, found that students lost 180 days of instruction in math for every year of 180 days in a virtual charter.

 

Bill Phillis of the Ohio Coalition for Equity and Adequacy wrote about today’s article in the Times and pointed out that ECOT has received nearly $1 billion in public funding since 2002.

 

Frankly, these fake schools should be investigated by authorities, monitored, and limited to students who are unable to attend school. They should exist only as public institutions, not profit-making corporations.

Paul Krugman puts the matter directly: Donald Trump is an ignoramus. His ignorance is hopeless because he doesn’t know what he doesn’t know. He likes to tell people that he is smart. Anyone who says that he is smart is insecure, not smart. His ignorance is dangerous to the economy and to our national security. When he was asked in an interview who influences him on foreign policy and defense, he said he watches television. That’s scary.

 

Krugman writes:

 

“Truly, Donald Trump knows nothing. He is more ignorant about policy than you can possibly imagine, even when you take into account the fact that he is more ignorant than you can possibly imagine. But his ignorance isn’t as unique as it may seem: In many ways, he’s just doing a clumsy job of channeling nonsense widely popular in his party, and to some extent in the chattering classes more generally.
“Last week the presumptive Republican presidential nominee — hard to believe, but there it is — finally revealed his plan to make America great again. Basically, it involves running the country like a failing casino: he could, he asserted, “make a deal” with creditors that would reduce the debt burden if his outlandish promises of economic growth don’t work out.
“The reaction from everyone who knows anything about finance or economics was a mix of amazed horror and horrified amazement. One does not casually suggest throwing away America’s carefully cultivated reputation as the world’s most scrupulous debtor — a reputation that dates all the way back to Alexander Hamilton.”

 

Let’s bring the discussion to education. Trump has said very little about education. I watched the debates and some of his many speeches. This is all I heard. He says he will get rid of the Common Core, but the fact is that there is not much the federal government can do to roll it back. It is out there, propped up by the SAT, the ACT, Pearson, and Gates. He says he loves charters. He says he believes in local control.

 

I don’t believe he knows what Common Core is. I don’t believe he knows what charters are. I don’t think anyone has explained to him what public education is. I don’t think he has said anything about higher education or how to relieve the crushing student debt. I don’t think he has spent ten minutes thinking about education. Nothing he has said would lead you to think he is informed about the issues that concern readers of this blog or me.

 

Most of what he says seems to be off the cuff, drawn from his personal experience or observations. I don’t believe he knows anyone who went to public school or anyone who had to borrow to pay for college. I can’t be sure but his total silence on these subjects makes me think he has no views because he has never met anyone who talked about these matters. Certainly they are not part of his own privileged upbringing.

 

I ask myself why so many people voted in the primaries for a man who is boastful, a man who makes our-in-the-sky promises, a man who ridicules his opponents, a man who accused Ted Cruz’s father of involvement in the JFK assassination because he read it in the National Enquirer, a man who wants to make the 2016 election a referendum on Bill Clinton’s infidelities.

 

Trump is vulgar, crude, and childish. I recall when Anderson Cooper asked in a forum why he posted an unflattering picture of Cruz’s wife on Twitter. Trump’s response? “He did it first!” Cooper, to his credit, said, “With all due respect, sir, that’s the kind of answer I would expect to hear from a five-year-old on the playground.”

 

Trump lacks dignity and gravitas. He is like a carnival barker, imploring voters to buy a ticket and go inside to see impossible, unbelievable, wonderful, horrible sights. And people vote for him.

 

Why?

 

I wonder if they vote for a charlatan for the same reason they rush to sign up for charter schools. I wonder why legislators continue to pour hundreds of millions into an industry that does not produce the results that were promised. The public, the media, and the legislators are easily hoodwinked. They want to believe. They swallow empty promises. Even when presented with evidence that charters are no better and often worse than public schools, even when they learn of scandals and frauds, they believe.

 

Why the gullibility? Why the willingness to play three-card monte with a card shark? Why are so many so willing to be duped by a con man? Is there something in our national character that sets us up to be duped by a snake oil salesman?

 

Gullibility. That is why a businessman who has declared bankruptcy four times, a man who insults and ridicules anyone who challenges him, a man who will descend into the gutter whenever he wishes, is soon to be the Republican nominee for President of the United States.

 

 

 

 

 

 

A grand jury in Escambia County in Florida indicted Newpoint Education Partners and its vendors for fraud and other crimes. Newpoint Education Partners was created by former employees of Ohio’s controversial for-profit White Hat Management company.

 

“An Escambia County grand jury indicted Newpoint Education Partners and three other companies for grand theft, money laundering and aggravated white collar crime.

 

“Newpoint managed charter schools in Escambia County for 21st Century Academy of Pensacola. Last year, the Escambia County School Board revoked charters for Newpoint Academy and Newpoint High for grade tampering and misuse of public funds. All three Newpoint schools — Newpoint High, Newpoint Academy and Five Flags Academy — closed. The enrollment at the three schools totaled about 350 students.

 

“The grand jury alleges that Newpoint and its vendors fraudulently billed 21st Century Academy hundreds of thousands of dollars for supplies, equipment and services. Newpoint and its vendors allegedly laundered the proceeds of the thefts through multiple bank accounts to conceal the criminal activity.

 

“The source of the alleged laundered proceeds was charter school grant funds appropriated by the state for charter schools to use to procure supplies, equipment and services necessary for startup.

 

“I’ve prosecuted charter schools before, but not this particular type of scheme,” Assistant State Attorney Russell Edgar said. “I’ve prosecuted people involved with charter schools for committing theft of funds and prosecuted people for misusing children to work off campus during school, but this is the first time prosecuting a managing company.”

Bill Phillis is a retired administrator who champions the cause of public schools in Ohio. He founded the Ohio Coalition for Equity and Adequacy. Having served as a deputy commissioner of the state education department, he closely tracks the state budget. He frequently writes about the charter industry and its unscrupulous raid on public monies. If you care about public schools in Ohio, you should add your name to his mailing list and consider a contribution.

 

Today he writes:

 

“Federal government adds $333 million to $3 billion already spent to expand the failed charter industry

 

“Congress and the U.S. Department of Education made a devilish wrong turn in public K-12 education policy with the enactment of the 2001 No Child Left Behind Act (NCLB). Departing from its historical role of supplemental support for the public common schools, the federal government, in some respects, turned against what Horace Mann declared the “greatest discovery of mankind”- the public common school.
“NCLB provided a variety of weapons to discredit and punish the public system. In that context, the feds have appropriated $3 billion to promote the charterization of the public system. In spite of the corruption and racketeering in the charter industry and its dubious performance, the feds have put an additional $333 million in Every Student Succeeds Act (ESSA) for 2016 to further expand the industry.
“The charter industry seems to have a stranglehold on the federal politicians. The charter lobby, via campaign contributions and other perks, are able to advance this inferior alternative to the great American common school system.

“Those great political and educational leaders, who founded the common school system, never envisioned that government would become the enemy of the real public school system.”

 
William Phillis
Ohio E & A

 
Ohio E & A
100 S. 3rd Street
Columbus OH 43215
Sent by ohioeanda@sbcglobal.net

 

 

The annual rankings of the “best” high schools was recently published by US News & World Report. Pay no attention. They are meaningless. They make no distinction between highly selective schools and open enrollment schools. If a high school has an entry exam or gets rid of kids with low test scores, it is ranked higher than high schools that accept everyone and do a great job.

 

The magazine should be embarrassed to publish such a misleading ranking. There is no ranking that would be meaningful. It is sort of like listing “the best families” in America. No, you won’t be admitted.

I recently posted about a charter school in Los Angeles that lost its charter after an audit revealed serious financial irregularities. The charter operator was fined $16,000 although millions of dollars may have been misappropriated.

 

The Los Angeles Times story noted:

 

“Some of the allegations bordered on the bizarre.

 

“Auditors questioned, for example, the use of school funds to pay a $566,803 settlement to a former teacher who sued the organization for wrongful termination after she was directed by Okonkwo to travel with her to Nigeria to marry Okonkwo’s brother-in-law for the purpose of making him a United States citizen.”

 

Apparently, the owner of the charter was not required to repay to the school the $566,803 used to pay the teacher for wrongful termination.

 

The story is even more bizarre:

 

A reader posted the following summary of the investigation. Why wasn’t the charter owner prosecuted for immigration fraud? Why did the California Charter School Association support the renewal of this charter? Many questions, no answers.

 

********************************
Our reader wrote:

 

 

The L.A. County BOE hired a team to do an “extraordinary audit” of the charter in question, “Wisdom Academy of Young Scholars”.

 

It’s quite a read:

 

http://fcmat.org/wp-content/uploads/sites/4/2014/03/LACOEWAYSAB139finalreport3-20-14.pdf

 

Among its many mind-blowing findings is the one pertaining to the immigration fraud.

 

in what might be the wildest story of extortion I’ve ever heard of in a school setting, the charter operator, Mr. Godfrey Okonkwo, engages in a unique way of helping his brother-in-law, a Nigerian citizen, obtain his U.S. citizenship;

 

This charter honcho, Mr Godfrey Okonkwo, gives an ultimatum to one of the non-tenured teachers working at the charter school:

 

… as a condition of continued employment … as in “Do this or else your fired.”

 

— this teacher must fly to Nigeria, marry the brother-in-law of the charter honcho, Mr Godfrey Okonkwo, then fly back to California, then live in a sham marriage long enough to satisfy immigration officials.

 

Halfway through, though, the teacher backs out of the deal. Incredibly, she went as far as to fly to Nigeria with her charter school boss, Mr Godfrey Okonkwo, actually marry Mr. Okonkwo’s brother-in-law, and then the three of them flew back to Los Angeles together.

 

However, it is at this point the teacher gets cold feet, and tells her boss, Mr. Okonkwo, that she’s backing out of such an unsavory and highly illegal proposition. The prospect of having to fill out detailed Homeland Security documents — with severe jail penalties and huge fines for those who are ever caught providing false information on this form — leads to this decision.

 

(To prove the charter honcho’s involvement, the audit shows that the Repuplic of Nigeria marriage certificate has the Mr. Okonkwo’s name and signature, as the “witness” to the marriage.)

 

As promised, Mr. Okonkwo fires the non-tenured teacher fore refusing.

 

In response, the teacher files a wrongful termination lawsuit against both Mr. Okonkwo, the “Wisdom Academy of Young Scholars, and the Merle Williamson Foundation (MWF), a non-profit 501(c)(3) under which WAYS operates. A jury later found in favor of the teacher plaintiff, and against Mr. Okonkwo, WAYS, and MWF. In a subsequent judgment, this teacher was awarded of $566,803. Mr. Okonkwo eventually pays the teacher this $566,803 in school funds that were supposed to go the classroom.

 

In defending himself in the lawsuit, Mr. Okonkwo defiantly claims that all of this happened off-campus during a holiday break from school, and thus, outside of the school’s scope of employment. “Therefore, butt out. This is none of the L.A. County BOE’s (the charter authorizer’s business.), or anyone else’s business. It’s a private matter between the bride, the groom/my brother-in-law, and myself.”

 

The problem with this line of defense, however, is that Mr. Okonkwo settled the wrongful termination lawsuit with the teacher for $566,803, but did not use his own private funds to do so. Mr. Okonkwo cut a check out of the charter school’s bank account, with the charter school “Wisdom Academy of Young Scholars”, as the payer on the check.

 

This also leads to Mr. Okonkwo being shown up to be a liar in another area. Mr. Okonkwo claims that she took no days off from school. However, multiple teachers — those interviewed regardin the marriage / immigration fraud confirmed that Mr. Okonkwo took many school days off, and traveled to Nigeria on those days.

 

Here’s the relevant passage:

 

(page 22 on the bottom footer ,

 

OR

 

page 30 of the PDF page counter)

—————————————–

“Professional Liability for Founder/Former Executive Director

 

“Documents from a lawsuit settled against the Merle Williamson Foundation (MWF) for wrongful termination of a former teacher at WAYS against the school show that the founder/former executive director traveled to Omtsha, Nigeria and directed one of the school’s teachers to go with her to marry her sister’s husband (brother-in-law) for purposes of making the brother-in-law a United States citizen.

 

“Although the teacher married the brother-in-law, she ultimately refused to complete the Department of Homeland Security form I-130, Petition for Alien Relative, and brought suit against MWF. On December 4, 2012, a jury found in favor of the teacher plaintiff and subsequent judgment was awarded of $566,803.

 

“The contract dated July 1, 2008 through June 30, 2011 clearly states that the executive director shall be held harmless and be indemnified ‘from any and all demands, claims, suits, and legal proceedings brought against the Executive Director in her official capacity as agent and employee of the MWF, provided the incident arose while the Executive Director was acting within the scope of employment.” (emphasis added)

 

“Clearly this action by the ‘Executive Director’ was not within the scope of employment, was conducted during winter break in Nigeria, and yet the settlement was paid by WAYS charter school.

 

“The Certificate of Marriage document from Federal Republic of Nigeria shows the founder/former executive director’s signature as witness to the marriage between the teacher and Joseph Njor Enwezor (the founder/former executive director’s brother-in-law) on January 4, 2010.

 

“According to staff at LACOE who conducted interviews, these interviews with former teachers and board members indicate many trips to Nigeria to visit a personal residence in that country by the founder/former executive director, yet she asserts that she took ‘zero’ days off during the last five years.”
———————————————————

This is just the tip of the iceberg of the financial corruption that these creep engaged in. Read the whole thing. Again, it’s at:

 

http://fcmat.org/wp-content/uploads/sites/4/2014/03/LACOEWAYSAB139finalreport3-20-14.pdf

 

All of this begs the questions:

 

“How egregious must a charter school’s transgressions — both legal and ethical — be in order to close that school?

 

“How bad must if be for the California Charter School Association to denounce these practices, and withdraw its support for the charter authorization by either a county BOE, or the state BOE?

 

“How bad must it be order to trigger a criminal prosecution?”

 

Mind you, immigration fraud involving sham marriages is felony.

 

Why is THAT not being prosecuted?

 

The very fact that, after all this corruption was uncovered, that this charter operator even thought that she had a chance at authorizing by the State Board of Ed. shows how entitled the charter industry players think they are.

 

Indeed, the Callifornia Charter School Association supported their appeals to the L.A. County BOE and State BOE.

Chris Savage, who blogs at Eclectablog in Michigan, reports that multimillionaire Dick DeVos has threatened to run opponents to Republicans who fail to support expansion of the disastrous Education Achievement Authority. DeVos funds vouchers and privatization. He just plain doesn’t like public schools.

 

Chris Savage writes:

 

“I have confirmation from two independent sources in the Michigan legislature that multi-millionaire Dick DeVos is using the threat of massive financial support for Republican primary opponents of vulnerable Senate Republicans to force them to vote for the bill that would expand the Education Achievement Authority statewide. The same approach was used to peel off recalcitrant House Republicans before they passed the EAA expansion bill last month. If Democrats John Olumba and Harvey Santana had not voted for it, however, they would not have had enough.

 

“According to my sources, DeVos has pledged to fund Republican primary opponents to the tune of $100,000 each. In addition, he would provide the Republican victims of their effort with a list of other wealthy donors who would also support their primary challengers.

 

“This is the same approach that DeVos was reported to have used to force passage of legislation that made Michigan a Right to Work state in during the lame duck session in December of 2012:

 

“…….In public, Snyder insisted that right-to-work was still not on his agenda. Privately, his aides met with labor and suggested that concessions on other issues would keep the bill off the table. All the while, though, DeVos and his team were furiously whipping the vote. In the weeks before the start of the lame-duck session, DeVos personally called dozens of state lawmakers, pledging his support if the unions threatened recalls or primary challenges…..”

 

“If there was any doubt in your mind that wealthy corporatists are attempting to subvert our democracy and our government, this should dispel that idea. What the Koch brothers are doing nationally, the DeVos family is doing in Michigan to promote their anti-labor, anti-public education corporatist agenda.

 

“They are literally buying our government, one legislator at a time.

 

“It is my hope that Republicans in the Senate will be as offended as the rest of us by this blatant attempt to extort their votes. Anyone who values our American democracy and who values the principals of a representative, one-person/one-vote republic should be outraged at this.”

 

 

 

 

Another amazing but true story from Los Angeles about the loose rules under which charters operate.

 

This charter operator opened a charter school in 2006 called the Wisdom Academy for Young Scientists. She bought a building and leased it to the charter for $19,000 a month. She paid herself a salary of $223,615. She renovated the building and charged it to the state. Auditors think the charter operator may have funneled millions of dollars to her own accounts from public funds. The violations were too egregious to overlook.

 

Some of the allegations bordered on the bizarre.

 

Auditors questioned, for example, the use of school funds to pay a $566,803 settlement to a former teacher who sued the organization for wrongful termination after she was directed by Okonkwo to travel with her to Nigeria to marry Okonkwo’s brother-in-law for the purpose of making him a United States citizen.

 

The school was closed in 2014. The operator claimed bias. She was fined $16,000.

 

In papers filed with the state, Wisdom’s leaders accused auditors and the county office of misconduct and “open hostility … against this African American operated school,” calling it “the culmination of years of unfair treatment and retaliation … because a few [county office] staff members dislike our school’s founder Kendra Okonkwo, her family, the thickness of her accent, and the color of her skin.”

 

Ordinarily, this degree of theft of public funds would merit a criminal prosecution. The California Charter Schools Association supported this charter’s appeals to the county board and the state board.

The North Carolina legislature, which has garnered wide attention for its devotion to Tea Party principles, is rushing to create a statewide district for low-performing schools, modeled on Tennessee’s Achievement School District. The district would gather together the schools in the state’s bottom 5% by test scores and remove them from their local school district, despite any objections from the local school boards. The basic idea is that local control can be ignored because the state wants to take these schools and give them to for-profit charter operators. This is likely to be a bonanza for the for-profit charter operators, who are very good at squeezing a profit out of schools for low-income children. Most assuredly, all the schools in this new statewide district will enroll very poor children.

 

Now, you might think that a careful legislator might think twice or maybe three times about this latest reform. After all, the legislators heard testimony from Gary Henry of Vanderbilt, whose team studied the Tennessee Achievement School District and could discern no statistically significant improvement.

 

Republican supporters of the bill were joined by two Democratic legislators in pushing through the legislation. There’s no time to wait, they said, because they care about the kids and won’t tolerate the status quo any more.

 

Meanwhile, Rep. Rena Turner, R-Iredell, said she’s “excited” about the bill. “We have to take every opportunity to respond to our kids who are underserved,” said Turner.

 

An administrator in Tennessee’s district told committee members last month that the reform was beginning to gain its footing after a rocky first two years. However, that presentation came shortly before Vanderbilt University education researcher Gary Henry presented data that, despite promises of school turnarounds in Tennessee, seem to show the district had created no statistically significant changes in student performance in its early years.

 

As a result, public school leaders in North Carolina have been openly critical of achievement school districts since the proposal was floated last year.

 

This week, N.C. Superintendent of Public Instruction June Atkinson reaffirmed her opposition in an interview with Policy Watch’s Chris Fitzsimon.

 

“Why would we spend extra dollars that could be spent in the classroom directly helping students in order for out of state or other companies to hire a superintendent to run a school or schools across North Carolina?” said Atkinson. “I think it’s an idea that has not proven to be very effective in other states using that idea.”

 

Shortly after the vote Wednesday, Yevonne Brannon, chair of the advocacy group Public Schools First NC, said the bill does nothing to address the root cause of some chronically struggling schools: high concentrations of children from impoverished families.

 

“We’re not doing anything to improve per-pupil expenditures,” said Brannon. “We’re not doing anything to address teacher turnover. We’re not providing more wraparound services. We’re looking for more harsh, punitive measures to deal with low performing schools rather than being more thoughtful and more purposeful.”

 

On Wednesday, though, Horn seemed to dismiss critics who noted the district’s mixed results in other states.

 

“Fear of failure is not a deterrent,” said Horn.

 

What a brilliant statement! “Fear of failure is not a deterrent.” Why be afraid to copy an experiment that has not succeeded anywhere else: not in Tennessee, not in Michigan, and not in New Orleans. Why let “fear of failure” stop you when you have no evidence that your plan will help the kids? How bad can it be? After all, ALEC says it is a good idea. Promising to help the kids should be enough of a reason to move forward on a plan that has never succeeded anywhere. Just remember: It’s for the kids. Not the for-profit entrepreneurs.