Archives for category: Virtual Charter Schools

Bill Phillis in Ohio sent out this message. 

Cyber charters have a very poor record, both academically and financially.

The former head of the now-closed virtual charter school Akron Digital Academy misused $167,753 of school money through a shell vendor, according to a state audit released Tuesday.

“This is a very serious abuse of taxpayer dollars and we will seek to recover every penny,” Ohio Auditor Keith Faber said in a news release. “Abuse of public trust has a rippling effect on communities and will not be tolerated by my office.”

The school, burdened with financial problems relating to improperly tracking enrollment, quietly closed in June 2018. At the time, it was housed at 133 Merriman Road, the former home of Temple Israel owned by the Akron Hebrew Congregation, which moved to Bath in 2011.

From December 18, 2009 to February 8, 2013, the school issued payments totaling $167,753 to a vendor known as Individual Development and Education Achievement Services (IDEAS), supposedly for professional development services, according to the news release issued by the state auditor’s office. IDEAS would send invoices directly to Lashawn Terrell who signed them, signifying receipt of services.

On July 1, 2013, the state auditor’s Special Investigations Unit received a complaint alleging embezzlement. Auditors examined the bank activity of Terrell and the owner of IDEAS, Danielle Lumpkin, the news release said.

They identified 78 withdrawals totaling $137,575 issued from the IDEAS checking accounts that corresponded to deposits totaling $65,735 and $71,840 in Lumpkin and Terrell’s personal bank accounts.

Additionally, auditors found $30,160 in expenditures issued from the IDEAS checking accounts comprised of checks issued to Lumpkin for cash and debit card activity in merchant stores for personal purchases, the news release said.

Auditor Faber issued a finding for recovery for $167,753 against Lumpkin and Terrell.

The school closed last year after repayments to the state involving not properly tracking enrollment became too much of a burden on the virtual charter school’s budget, the school said at the time. .

The school’s monthly payments on the $2.8 million the state said it owed created a negative financial outlook through the next school year, said Linda Daugherty, the schoool’s former executive director said at the time. .

Akron Digital Academy was founded in 2002 by former Akron Education Association President Neil Quirk. The new school was meant to provide an alternative for Akron Public Schoolsstudents who were leaving for other charter schools and wanted more digital learning. It served students in grades 6-12.

Akron Public Schools was the sponsor until 2013, when Superintendent David James proposed closing the school for a range of issues. The school continually posted low academic scores. And enrollment had dipped to about 600 students as competition crept in from other charter schools, which were springing up in Akron.

James served on Akron Digital Academy’s board of directors at the time. The other board members blocked his attempt to close the school. And the district severed ties with the academy a month later by dropping its sponsorship agreement.

One charter school in the Chester-Upland district in Pennsylvania enrolls 60% of the district’s elementary schools. It is owned by one of the richest men in the state, a lawyer who was Republican Tom Corbett’s biggest campaign donor. That charter school, the Chester Community Charter School, has asked the county to turn all of the district’s elementary students over to charters. 

CCCS is not just any charter. It has received special treatment, despite its poor performance.

More than 4,300 students in kindergarten through eighth grade are already enrolled in Chester Community Charter, which is managed by CSMI. The for-profit education management company was founded by Vahan Gureghian, a Gladwyne lawyer and major Republican donor. It manages another charter school in Atlantic City that was placed on probation by the New Jersey Department of Education this year. A third charter in Camden was previously closed due to poor academic performance. 

In an earlier post, I described how CCCS made a deal in 2017 to win authorization until 2026, which is an unprecedented extension for any charter. In that post, I noted:

Its test scores are very low. Only 16.7% were proficient in English language arts, compared to a state average of 63%. Only 7% were proficient in mathematics, compared to a state average of 45%.

By most metrics, this charter school is a failing school, yet it gets preferential treatment. The scores in the charter school are below those of the remaining public schools in the district.

CCCS promised not to open a high school if it received a new extension. The decision was made by the court-appointed receiver for the district, which had been pushed into near-bankruptcy by CCCS; the receiver had been treasurer for the Corbett campaign. Just a coincidence, no doubt.

The Chester-Upland school district was hammered by a court decision that requires it to send large payments for students with special needs who enroll in cyber charters, even though the cyber charters provide minimal or no services to those students; the cyber charters are a voracious aspect of the state’s landscape, gobbling up full funding while failing to produce any academic gains for students or to meet any state standards.

Brick-and-mortar CCCS is so aggressive that it buses in students from Philadelphia, little children who ride a bus 2-3 hours each way to attend a failing charter school.

This latest move will strip the Chester-Upland District of more funding, leaving it with only a high school.

The charters are akin to a vulture, hollowing out the district and drawing students to low-performing charters with promises.



California is paying a high price for its notoriously lax law for authorizing charter schools, which was revised in recent weeks.

Tom Ultican sees a striking similarity between the Inspire charter chain, which enrolls home schoolers, and the A3 chain, which went up in flames with a loss to taxpayers of at least $50 million.

Inspire Charter School mirrors the methods of A3 Education. It employs practices strikingly similar to those that led to May’s 67-count indictment against A3’s leaders. Furthermore, the California Charter School Association (CCSA) took the same unusual step of sharing concerns about Inspire and A3 with California authorities. They are virtual schools that concentrate on obtaining authorization from small school districts. These systems have a similar structure in which a central organization controls the schools that are contracting with it and they transfer funds among multiple organizations making it difficult to monitor their activities. Students at both Inspire and A3 struggle academically.

The Acton-Aqua Dulce Unified School District is infamous for authorizing suspect charter applications while not having the resources to adequately monitor those schools. It has 1085 public school students and 14,734 charter school students. Acton-Aqua Dulce authorized Inspire’s first charter school which was located in Los Angeles County. Strangely, Inspire Charter grew from 151 students in the 2014-15 school year to 4,321 students in the 2018-19 school year and then closed up shop this June 30th.

Founder Nick Nichols needed a program that would service his target audience of home school students.  The Inspire 2016 tax form shows that he purchased curriculum from Academic Arts and Action for $149,625. This is notable because the chairman of Academic Arts and Action was Jason Schrock and the President was Sean McManus. That is the same Schrock and McManus indicted in the A3 scandal.

The education writer for the San Diego Union Tribune (UT), Kristen Taketa, has been relentlessly pursuing the Inspire story. She explains one of the the charters selling points,

“Inspire parents have been able to spend state-provided money on expenses they say are educational, from Disneyland annual passes to private ice skating coaching. The list of places where Inspire parents could spend school funds has included Costco, Amazon, Big Air Trampoline Park, Medieval Times, Guitar Center and the DNA testing company 23 and Me, according to Inspire’s list of approved vendors.”

Inspire provides each parent $2600 to $3000 to spend on field trips and other educational resources.

Last year Nick Nichols oversaw nine schools with 23,300 total students. In the 2016-17 school year, Inspire took in $76,018,441 yet their debt was skyrocketing. Their pay for officers went from $65,318 for the 2014-15 school year to $2,011,898 in the 2016-17 school year. Nick Nichols did especially well.

Inspire Income-Debt-Wages-Table

Data from Inspire Tax Documents

The UT’s Taketa reports, “Inspire expects to pull in $285 million in state funding this school year.”

Inspire just secured another $50,000,000 loan from the California School Finance Authority. With booming student daily attendance income and large financial backing from the state, it is strange that Nick Nichols chose now to take a temporary leave of absence. Former Mount Diablo Superintendent and Inspire’s chief operating officer, Steven Lawrence, is taking over as executive director.

As Ultican shows, Inspire’s students have very poor academic results.

How much longer will this charade continue with state money? Will someone wake up the taxpayer’s and legislators?

Think dirty politics, think North Carolina.

Yesterday, while some Democratic legislators and Governor Roy Cooper attended a 9/11 memorial service, the Republican legislators called a snap vote to override the governor’s veto of the state budget. They had repeatedly assured the Democrats that no votes would be recorded that morning, but they lied. If the full body of representatives had been present, the governor’s veto would have stood.

Cooper vetoed the budget because it did not include Medicaid expansion, which he favors but the Republicans oppose. Thanks to the Republicans, 634,000 citizens in the state will not have health coverage.

This article includes an interview with Democratic representative Chaz Beasley, who explains what was at stake.

He said,

North Carolinians sent us up to Raleigh to have a voice and a say in how we spend $24 billion. And what we’ve seen throughout this process is that many of us were not at the table when whole swaths of the budget were negotiated and settled upon. The governor has made it clear what he would like to see in the budget. One thing he’d like to see is Medicaid expansion in there.

But problems with the budget go beyond the fact that it doesn’t expand Medicaid for 500,000 North Carolinians. We still underpay our teachers. We still have schools that lack the resources to be successful. We still haven’t given a large enough pay increase to our state employees, or a cost of living adjustment to our retirees. Instead, the budget includes things like expanding programs for virtual charter schools that do not have good ratings for how they’re teaching our kids.

Virtual charter schools, we know, are a cash cow for big out-of-state corporations, and they are noted for terrible academic performance, high attrition, and low graduation rates.

The only mildly amusing comment in the article comes from a Republican who said that it was important to take a vote on 9/11 “so that the terrorists didn’t win.” He didn’t explain why it was necessary to take the vote when members of the Democratic party had been assured there would be no vote that morning. When you lie, cheat, and steal to get your way, you undermine democracy. When you betray democracy in your pursuit of power, the terrorists win.


Why do teachers’ pension funds invest in stocks of corporations that are actively undermining public schools and their teachers?

K12 Inc. manages a chain of online charter schools that are noted for low performance, high attrition rates, and low graduation rates. Their teachers never meet students. They have large classes, no union.

New York State Teachers Retirement System Makes New $100,000 Investment in K12 Inc. (NYSE:LRN)

Will Huntsberry of the Voice of San Diego reports that all the online charters connected to the biggest charter fraud in U.S. history will close.

Huntsberry writes:

An online charter school empire whose leaders have been charged with enrolling fake students and misappropriating $80 million in public funds will be forced to close all of its schools across California.

In May, the San Diego district attorney’s office charged 11 people in a corruption scandal of historic proportions. Prosecutors say Sean McManus and Jason Schrock, who operated A3 Education, were the ringleaders of the operation. Several who worked with McManus and Schrock have also been charged with crimes, including the superintendent of the Dehesa School District in San Diego County.

At its peak, A3 operated 19 online schools across the state, including three in San Diego, according to investigators. One closed before the charges were filed. And two more – one in San Diego and another in Los Angeles – were slated to close. But now a court-appointed receiver has decided to shutter all of the remaining schools.

Students’ records at each of the closing schools will be transferred to their school district of residence by Sept. 30, according to a letter obtained by the Marin Independent Journal, which was sent out to districts associated with the A3 schools. Richard Kipperman, the court-appointed receiver, confirmed to Voice of San Diego that all the schools will close.

How the Scam Worked

Prosecutors painted an intricate picture of a complex organization that managed to turn student records into giant sums of cash. A3 Education enrolled many students who took actual classes, but it also enrolled many students who never did any schoolwork, prosecutors say.

Most of the fake students were participants in summer athletic programs, according to the indictment. Enrollment workers would approach a football program, for instance, and offer as little as $25 a head for each player’s records. The enrollment worker would also get a commission on however many students he or she enrolled. The rest of the money – which totaled in the thousands of dollars for each student – went to companies controlled by McManus and Schrock.

In one instance, Luiz Rigney, an enrollment worker, carried several suitcases of student paperwork, worth roughly $5 million, to one of A3’s offices. Rigney had been asked to backdate that paperwork so A3 could get maximum profit, prosecutors say.

In another instance, two workers texted each other back and forth about the large sums of cash flowing through the company: “I had the weirdest dream last night! One was about us growing all Sean’s schools. I was running all the Facebook campaigns and you were running around my office drinking champagne throwing money everywhere yelling I love bonuses,” the texts read, according to court documents.

Fraud after fraud is associated with virtual charter schools, especially when they are created by entrepreneurs with the purpose of making money. They do make money, but they don’t educate students. Why do legislators and governors allow this scam to proliferate? Every educator should shout their outrage at the ripoffs, happening in state after state. Virtual charter schools are the epitome of “education reform” as hoax.

John Thompson of Oklahoma describes the Oklahoma scam here.

An Oklahoma State Bureau of Investigation affidavit alleges that Epic Charter Schools’ co-founders, David Chaney and Ben Harris, split at least $10 million in profits from 2013 to 2018. The Epic scandal offers some unique insights into both the for-profit charter’s culture and the nature of the school privatization movement, as well as the downsides of online instruction in an age of corporate school reform.

Chaney and Harris allegedly recruited “ghost students” from homeschools and sectarian, private schools “for the purpose of unlawfully diverting State Appropriated Funds to their own personal use.” Epic established a $800 to $1000 per student learning fund for students who were not on the State Department of Education (SDE) “conflict list,” meaning that they were not enrolled in a public school; the state would have known of the illegal dual enrollment had names appeared in both lists. Those students were known as “members of the $800 club,” and their supposed instructors were known as “straw teachers.”

Affidavit: Epic Charter Schools used ‘ghost students’ to embezzle state funds

The following are details that reveal crucial facts relevant to online charters across the nation.

First, the OSBI search warrant cited a case which apparently reveals intent to defraud. A convicted felon, identified as LDW, saw Epic as an opportunity for an “economic windfall.” LDW and her uncertified staff did not require students to work the hours required by the state to earn credit for a full school day. And then there was an interesting twist to the LDW story.

LDW’s research told her that dual enrollment was illegal. So, she converted her school into a“learning center” under the “Epic Model.” LDW made a “‘vague reference” and “implied” that she “‘may have” learned about the Epic model from the Epic website.” Apparently, she justified the acceptance of the $800 per student learning fund money not as “tuition,” but as “before and after care” and “tutoring fees.” Parents didn’t necessarily know or consent to the new model, but LDW sent a document entitled “General Assurance” to David Chaney asserting that she “was not doing anything ‘illegal.’”

The OSBI thus seems to be presenting the case that Epic was illegally draining money from the state, and that Chaney and Harris helped choreograph the illegalities.

Second, Epic’s state funding expanded dramatically, up to $112 million annually, as public schools endured huge budget cuts. Epic also used, or misused, the state’s charter conversion law to take over rural school districts through what one superintendent calls “predatory marketing,” using misleading advertising in “aggressive attempts to attract students and teachers from surrounding school districts even in the middle of the academic year.” And it planned to expand further. Epic had sought to take over the troubled Swink district, but that and the plan to expand in Texas and Arkansas have been put on hold.

Public School’s Switch to Charter Allows Epic to Operate Rural District

Probe threatens Oklahoma virtual school expansion into Texas

So, Oklahoma was on the path towards even larger online charter scandals, such as in California, Ohio, Florida, and Indiana. And the investigation of the $180 million Florida school and the $40 Indiana fraud might be especially pertinent. It’s not just the way that their virtual school operators “shrug off blame.” More importantly, Florida and Indiana privatizers have the ears of many Oklahoma “reformers.”
Two Indiana virtual schools face swift closure as they shrug off blame for enrollment scandal

Two Indiana virtual schools face swift closure as they shrug off blame for enrollment scandal

And, third, that brings us to the Oklahoma Council for Public Affairs, Governor Stitt, and legislators who see choice as the panacea which could make Oklahoma a “Top Ten” state. Earlier this summer, the OCPA was bragging about the agenda they would push next year. It then touted Stitt’s support for vouchers and Florida’s education reform plan. In addition to claiming that reforming the state’s funding formula could produce transformative gains, it praised Indiana’s reforms. The OCPA’s claims that fixing Oklahoma’s imperfect but basically good funding formula could fix our schools on the cheap are completely divorced from reality.

Oklahomans paying to educate ‘ghost students’ in numerous districts

Fourth, After Epic’s scandal became public, however, it’s taken alt truth to a new level. It first doubled-down on the politics of personalized vilification of educators and opponents.
Epic quickly replied to Jennifer Palmer’s journalism in Education Watch with insults but without facts. It claimed that the Oklahoma Watch article “implies that ALL Epic’s administrators are evil, skanky people hell bent on destruction of Oklahoma’s public education system.” Epic also argued that Palmer’s work linking such gamesmanship with incentives tied to accountability metrics is “more fiction than a Steven King novel.” They also called it “nefarious.”
After the OSBI’s search warrant was revealed, however, Epic’s responses have become completely bizarre. Whether you believe it needs some updating or not, Oklahoma’s funding formula is based on solid evidence and logic. But the OCPA and Sen. Gary Stanislawski, the Chair of the Senate Education Committee, say that the “weighted average” for funding different types of students in different grades is a system that funds “ghost students.” Equally absurd, the American Legislative Exchange Council, the OCPA, and Sen. Stanislawski claim that the “daily membership” formula funds “ghost students.” Worst of all, the Education Chair buys into the spin about Oklahoma’s formula, “It’s a legal way to rob other school districts.”
It must be stressed that the tactic of answering fact-based charges about “ghost students” with made-up attacks on solid, established funding systems for being schemes to fund made-up “ghost students” is not new and preceded the Oklahoma scandal. The OCPA drew on ALEC’s “Report Card on Education,” praising the way “Indiana Seizes the Hammer, Enacts Comprehensive Reform.” Not surprisingly, it promoted vouchers, charter expansion, undermining teachers’ rights, A-F Grade Cards, and “The Way of the Future: Digital Learning.” If the governor or legislative leaders would bother to follow the OCPA link to the 2012 ALEC report, they would learn that included no evidence that ghost students existed or that improvements resulted from their changes.

Fifth, in fact those “reforms” failed. During the four years after reforms were implemented, the four key tests on the reliable NAEP test scores showed gains of .25 points per year, meaning that student performance remained basically flat. Since they were supposed to be a civil rights campaign against the “low expectations” perpetrated by bad teachers, who were poorly trained and not held accountable by school systems, and defended by bad teachers unions, it is especially important to remember that Indiana’s economic achievement gap increased from 2013 to 2017.

NAEP State Profiles

NAEP State Profiles

Sixth, these alt facts lead to one of the worst aspects of ideology-driven, market-driven reform. Online charters like Epic inflict financial harm on schools. They help some students but hurt many more. Some of the worst damage, however, is inflicted on the principles of public education and our democracy.

Epic have undermined public schools by slandering educators and education advocates. Their statistical and financial gamesmanship has been bad enough. It is their willingness to say anything and to falsely demonize opponents that has most corrupted our constitutional democracy. And that may be the saddest truth about the tragic results of the school privatization era.

Earlier this year, Ohio’s infamous Electronic Classroom of Tomorrow (ECOT) went into bankruptcy rather than pay the state money owed for “ghost” students. ECOT has collected over $1 billion since its opening nearly 20 years ago. It had the lowest graduation rate of any high school in the nation. Its owner regularly gave campaign contributions to state officials, which shielded him from accountability until a state court ordered ECOT to pay back state money for students who never showed up.

ECOT is gone, so here comes a new virtual K12 Inc. charter school. 

K12 is a for-profit management corporation listed on the New York Stock Exchange. It has high attrition, low test scores, poor educational quality, but it is profitable.

Charter schools in Ohio are called “community schools,” which is a joke, since they suck money away from public schools, which are real community schools. Even corporate charter chains, like the 40 owned by entrepreneur Ron Packard (ex-Goldman Sachs), are called “community schools.” Ha-ha.

The Ohio Digital Learning School (ODLS), authorized by the Ohio Council of Community Schools, will serve students ages 16 to 21 in grades 9-12. It is tuition-free.

Behind the scenes, K12 Inc. is serving as an online management provider, supplying curriculum and the online platform that the school will use, along with other services. The company already is involved in two other virtual high school charters in the state, Ohio Virtual Academy (K-12) and Destinations Career Academy at OHVA (9-12).

Is there any scam too odious for Ohio?



Virtual charter schools are a disaster for students, but a honey pot for their operators—that is, until they get caught and face the music and possible jail time.

John Thompson describes the epic fail of the EPIC virtual charter in Oklahoma. 

Ghost students, straw teachers, parent bonuses. What a scam.

An Oklahoma State Bureau of Investigation revealed that the co-founders of the state’s largest virtual charter school system, Epic Charter Schools, David Chaney and Ben Harris, split at least $10 million in profits from 2013 to 2018. They allegedly recruited “ghost students” (who were technically enrolled but received minimal instruction from teachers) from homeschools and sectarian private schools “for the purpose of unlawfully diverting State Appropriated Funds to their own personal use resulting in high NFAY [not full academic year] rates and low graduation rates for the students.” 

Epic established an $800-to-$1000-per-student learning fund for students who did not enroll in a public school. These students were dubbed “members of the $800 club,” and assigned to “straw teachers,” who “would receive additional pay in the form of bonuses which included student retention goals,” while “those who dropped students would see a decrease in pay.”

A search warrant cited parents who received money but admitted they had no intention of receiving instruction from Epic. One family withdrew its ten children from public schools,  received $8000, and allowed the kids to ride horses instead of attending school. 

Does anyone have a link to Betsy DeVos’ Senate confirmation hearings when she rattled off the impressive but false statistics about virtual charter schools? It turns out they are the quintessential fraudsters of the Disruption Movement.




Democratic Governor Roy Cooper vetoed legislation to allow the state’s two low-performing virtual charters to expand enrollment. 

Republican legislators complained that Cooper was interfering with the family’s right to choose a failing school.

State lawmakers passed a bill in July lifting the enrollment cap on the state’s two virtual charter schools so that they could grow by 20% a year. Cooper announced Monday that he had rejected Senate Bill 392, citing the schools’ poor academic performance.

“Current law already allows the State Board of Education to lift the enrollment cap on virtual charter schools,” Cooper, a Democrat, said in a statement. “Both schools have been low performing, raising concern about the effectiveness of this pilot. Decisions on adding more students should remain with the Board so it can measure progress and make decisions that will provide the best education for students.”

In the 2018 election, Republicans lost their veto-proof majority.
Than you, Governor Cooper!
Read more here: